NASDAQ_400
04-23-2003, 03:57 AM
Gold is looking better. . .
Richard Russell
Dow Theory Letters
April 22, 2003
Extracted from the 21 April 2003 issue of Richard Russell's Dow Theory Remarks
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.
More follows for subscribers. . .
Richard Russell
Apr 22, 2003
Dow Theory Letters
© Copyright 2003 Dow Theory Letters, Inc
http://www.321gold.com/editorials/russell/russell042203.html
:D
Richard Russell
Dow Theory Letters
April 22, 2003
Extracted from the 21 April 2003 issue of Richard Russell's Dow Theory Remarks
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.
More follows for subscribers. . .
Richard Russell
Apr 22, 2003
Dow Theory Letters
© Copyright 2003 Dow Theory Letters, Inc
http://www.321gold.com/editorials/russell/russell042203.html
:D