The chart above shows that the Copper / Gold Ratio has been a leading indicator for the stock market at turning points, in both directions
1. 2007: The Copper / Gold ratio set a significant high in July 2007 before the stock market turned down later in the month. As the Dow rallied to it’s all time high in October that year, the Copper /Gold ratio did not and ultimately it was a leading indication that the stock market was stretched.
2. At the start of May 2008, the Copper / Gold ratio peaked and the stock market set it’s interim high two weeks later
3. December 2008 – January 2009: Copper / Gold Ratio continued to trend lower while stocks bounced. This was not sustained at the Dow Industrials set an interim high again at the start of the year on January 6th 2009 and fell further
4. Feb – March 2009: Copper / Gold ratio based in February this year while the Dow Jones based on March 6th. Again the Copper / Gold ratio turned first
5. So far the Copper / Gold Ratio has posted a high before the Dow Industrials. Further out performance of gold would turn out to be a leading indication of weakness ahead for stocks.
• Has rallied up the medium term resistance area and has since posted a concerning evening star ‘like’ pattern where an up week and a down week lie on either side of the indecisive week at the high (insert).
• A move down towards the support levels around 9,106 – 9,043 is expected in the short term and a breach of that would be concerning
NASDAQ (NDX)
• Posted a doji pattern on the weekly chart at the trend high and at the resistance level at 1,668
• Last week the market fell, intra week, did not post a down week though is still below resistance
• Again this is concerning on the weekly chart and further short term losses will lead to the momentum indicator crossing from overbought levels.
• Over the longer term, the left chart shows significant resistance to 1,750 (trend resistance, 200 week moving average and horizontal resistance levels).