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Gold/Mining/Energy : A to Z Junior Mining Research Site -- Ignore unavailable to you. Want to Upgrade?

To: 4figureau who wrote (4170)	4/22/2003 9:29:06 AM
From: 4figureau	Read Replies (2) \| Respond to of 5423

Gold is looking better. . . Richard Russell Dow Theory Letters April 22, 2003 Gold- - Gold is starting to act better. I'm looking at my chart of the Dow divided by gold. This ratio hit a high of 42.1 in favor of the Dow in August of 1999. Since then the trend has been down in this ratio -- in favor of gold. To smooth out the path of this ratio, I run a 200-day moving average. The Dow/gold ratio has tended to hold below its declining moving average. In March and again twice in April the ratio popped above the moving average, and today (Monday) the Dow/gold ratio is sitting right on its declining 200-day MA. The ratio today stands at 25.1. So while in August 1999 the Dow would buy 42 ounces of gold, today the Dow will only buy 25 ounces of gold. That's a decline of 40% in the ratio -- in favor of gold. I've written before that I expect this ratio in due time to decline to 1 or near 1. The question is asked, if the ratio declines to 1, where do you think the Dow and gold would be. My guess -- gold and the Dow both at 3000. Gold Technicals -- Gold has now reversed (to the upside) the declining trendline that connects the February 5 peak and the lower March 7 peak. The stochastics for gold are rising, as is MACD and OBV and momentum. My advance-decline line has broken out topside, and HUI and XAU have also turned positive. Gold is looking better than at any time since its early-February top. 321gold.com