Chart of the Day - Tuesday, January 25th, 2022

Today’s Chart of the Day was shared by Alfonso Depablos (@AlfCharts). It's a ratio chart of the S&P 500 vs. Gold over the past four years ($SPY/$GLD). Last week, we discussed how Gold was beginning to wake up from the dead. $GLD is up about 1% year-to-date, while $SPY is down about 8.5% over the same period. Alfonso points out this ratio is currently retesting the former highs. Stock Market Bulls would like to see the ratio bounce at this level. On the other hand, Gold Bugs would like to see the ratio breakdown at this level. The outcome of this test will tell us which asset is likely to outperform the other. Either way, we'll probably find out soon, so keep an eye on how this test plays out. 

Above the former highs = Stocks > Rocks
Below the former highs = Rocks > Stocks