Charting the Course of the Gold to Bond Ratio

• Posted by Greg Harmon
• on May 31st, 2013

Gold ($GC_F, $GLD) got whacked back in April and has been trying to get through a standing 8 count since. And Treasuries ($ZB_F, $TLT) have just caught themselves by the last fingernail before falling over the cliff. So why would you want to be involved with either of these assets? The ratio chart of Gold to Treasuries gives some compelling reasons.

After bottoming with the Gold plunge in mid April this ratio rallied back to the 1.20 level in early May. After a short pullback to a higher low it is back at that 1.20 level again. A Measured Move would take it higher to 1.26 and then a triangle break targets 1.36 on the ratio. It has support for a push higher from a Relative Strength Index (RSI) that is rising and crossing the mid line on the way to bullish territory and a Moving Average Convergence Divergence indicator (MACD) that is also rising and making new higher highs. Look for a break above 1.20 to get in by buying 100 shares of the $GLD for every 120 shares short of the $TLT.

Want to learn more about Dragonfly Capital Views?Dragonfly Capital Views Performance Through May 2013 Expiry and sign up here.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus