Kimble Charting

Gold prices continue to move swiftly higher as gold nears $3000/ounce. Feels like a big rally already. But gold may be in the early innings of a longer-term run… especially if today’s chart pattern proves to be as bullish as it looks. Notice that the ratio traded sideways for 15 years before posting a historical break out in the early 2000’s… and rallying for years. Then gold repeated that 15 year sideways trading pattern before attempting to break out again more recently. History in the making?

In February 2021, the Nasdaq Composite stock index began to underperform the S&P 500… and this has continued for the past 45 months. Today, we highlight the long-term chart of this Nasdaq to S&P 500 ratio price performance, along with key observations and concerns. Looking at the chart below, we can see that the long-term trend for this ratio remains up. That said, the past 45 months of underperformance is concerning.

In a world where the US Dollar still makes the world go round, it’s vitally important that investors pay attention to potential pivot points for the buck. There’s a reason why we call it King Dollar! When it is weakening, we often see a tailwind for gold and other commodities and sometimes stocks and bonds. And when strong, the opposite. Lately we have seen a stronger Dollar that’s rising with interest rates (and that’s hurt bonds). BUT that could be coming to a halt.