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Copper to Gold Ratio: RUN AWAY!

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I am trying to meticulously catalog all of the signs telling me that the stock market is about to tank. I don’t want anyone who reads these rants to do anything besides smile and/or laugh when those around them or on financial TV claim “no one could have seen it coming.” Because I see it coming like a freight train carrying a ton of bricks.

I last talked about the copper to Gold ratio in this March post (see this post for background info if you’re not familiar with this ratio). I was off in my call for a top in this ratio by a few weeks, but I had the theme right. Since then, a MAJOR breakdown in the copper to Gold ratio has occurred and is a serious caution signal not to be ignored.

Here’s a 30 month weekly ratio chart using the JJC ETF as a proxy for the copper price and the GLD ETF as a proxy for the Gold price (i.e. JJC:GLD):

On a slightly related note, the short-term Gold chart (again, using the GLD ETF as a proxy) is looking very sweet. Here’s a 7 month 60 minute intraday chart of the action thru today’s close:

I’d also like to call your attention to the broadening tops/expanding megaphone patterns in two major stock markets. See this old post, when yours truly got a bunch of TARP money out of JP Morgan’s hide(in advance) using this technical pattern. Following are daily charts of the past 19 months’ price action in the Australian and French markets using candlestick plots. First up, Australia ($AORD):

Next and even more unstable looking is France ($CAC):

Did I mention that I’m black bile bearish on stocks and bullish on Gold? I am talking my book, as I hold short positions in the stock market and long positions in Gold. Happy speculating!

 

More on this topic (What’s this?)

Where Next for Gold?
IS GOLD GOING TO $5,000?

Read more on GoldCopper at Wikinvest



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