Saturday, January 16, 2016

Gold:SPX ratio persistent RSI divergence and lessons from the past

We believe that Gold will outperform SPX for the next couple of years.As we note to the following chart of Gold:SPX ratio,during the last three years of Gold bear market back in late 90's there was a massive divergence between RSI and price.This divergence lasted about 3 years before the start of the massive gold bull run from 1999-2011.Similarities with these days are obvious: Again a huge divergence on RSI and a rounding bottom of Gold:SPX. 3 years since the beggining of the current divergence will be on spring-summer 2016