A Market Character Change

One theme in NFTRH 278 is of a character change going on in the markets, gauged by several indicators and vantage points.  Here is a biggie…

Yes, the US stock market (SPX bottom panel) is on another wonderful bounce just like so many that came before.  But a funny thing is going on with gold (GLD) on the current bounce.  It is refusing to buckle and under perform the S&P 500 (SPY).  SPY continues to decline in gold terms (top panel).

It remains to be seen whether this divergence will prove bearish for stocks.  Quite possibly it will not.  But do you remember that extended phase last decade during which the Dow Gold ratio (now gone into hiding evidently) was flaunted as proof (hello, my hand is raised) that the stock bull of the time was purely a manifestation of inflation?

Well, the gold barometer may be getting fixed after so much time on the fritz thanks to the genius of modern policy making and some would say, the gaming of the big banks on Wall Street.

All I ask is that people not put their minds on automatic, extrapolating mature trends on and on.  The stock market and gold have a relationship.  That relationship helps tell players what kind of stock market it is, real or Memorex?