Sell Stocks And Buy Gold? Are You Nuts?
Dragonfly Capital | Nov 06, 2013 11:24PM ET
How many time shave you been told by someone on television or elsewhere that Stocks are at a peak and that when the great unwind happens from QE infinity, Gold is the only thing you want to own? Well, hard evidence says that Peter Schiff and others are just dead wrong.
The chart below shows the ratio of the S&P 500 (SPY) to Gold (GLD) is pressing against what has been resistance since late June. With the momentum indicators (RSI and MACD) both supporting a move higher as shown by the RSI rising and the MACD about to cross up, it suggests this is the time to tell Peter Schiff to go F’ himself, sell your Gold and buy Stocks.
Sorry for picking on Peter Schiff if you are one of his customers but WTF? Stock are rising. Gold, at best, is not rising, and in fact if you look closely it is falling. This chart from a technical perspective suggest that a move to a ratio of 0.1630 could be in store from an ascending triangle break out over 0.1345. That is 21% higher.
If Gold just stands still, that implies the S&P 500 rises to over 2125. If the S&P stands still it implies that Gold continues to fall to 1080. So what are you doing with your money?
Disclosure: 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 Original post
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