Last night the DJIA has started to back off from a wild bullish run which has convinced many to jump back into this so-called bull market. Wednesday is also a good turning day during a week!
Since December 2018 this move may not be finished yet if a bigger bullish move is still in progress, but if the zigzag rally is real then that December bottom of 2018 will not hold. (21,500). This move can be just a small bear market rally, and the best way to confirm that is if we see the DJIA completely retrace this bullish move. This 2019 bullish move was a very fast move which is normal in a bear market rally but seldom can maintain the move in the long run.
This morning the Gold/DJIA ratio was 18.40:1 which is an improvement but still not cheap enough by a long shot. I figure that at about 14:1 this market may be cheap enough to sustain another bullish phase, but at this time we are not even close. I have a Gold/DJIA ratio that made the DJIA “Cheap” when compared to gold, which was about 7.19:1. One day in the future this 7.19:1 ratio could get beat again and if and when it does, I will turn extremely bullish.
With the shutdown no government COT reports have been issued so we only have Dec 20, 2018, as the last time the COT report has been published. At least the Gold/Ratios never shut down as they are always in effect.