I’m ga-ga over ratio charts, as you know. Let’s look at some key ones.
First up is Bitcoin versus Ethereum, which predicted that Bitcoin would re-strengthen against Ethereum. So far, so good! It’s acting just like we expected.
The biggest news this week is the completion – – finally!! – – of this vital chart of the Dow Composite divided by silver. This is simply fantastic, and it implies metals beating the pants off equities for many, many months to come.
The reciprocal of the first choice, Ethereum divided by Bitcoin, illustrates how $ETH was performing very strong for months, but the bloom definitely seems to be off that rose.
The small caps versus gold completed months ago, and as with just about every metal vs. equity chart, suggests massive overperformance by metals over the long haul.
Change the metal, but the result is the same: the head and shoulders top was followed by years of lower ratio prices, and this time, a diamond top suggests the same outcome.
The equal-weighted S&P 500 divided by the “normal” S&P 500 highlights how concentrated the strength has become. More and more, the superstars like Alphabet, Nvidia, and Apple have been keeping things propped up.
Flipping things a bit, here is gold divided by the S&P 500 ETF, which is an exceptionally bullish setup.
Likewise, here is gold divided by the US dollar index, which is also a very bullish setup that has already run quite a way.
Palladium is a bit of a laggard by these same measurements, but the metal divided by the dollar index suggests a dynamite future ahead for PALL.
Silver divided by the S&P 500 ETF has completed a breakout, and if it behaves anything like the last time it did this, silver bulls can rejoice.
Just to drive the point home, here is silver divided by the US dollar index. Same result: fantastic!
The last chart is a bit different: it is the SPY divided by TLT (that is, equities divided by bonds). This wedge has gone over for years and years, but it is definitively broken, and once traders finally wake up and smell the coffee, equities are in exceptionally serious trouble.
