Tuesday , 21 September 2021

What the Gold:Lumber Ratio Is Forecasting For The Stock Market

According to research by Michael Gayed (see here) nearly every major crash, correction, and bear market has historically been preceded by weakness in Lumber relative to Gold. So what is the Gold:Lumber Ratio saying these days?

By: Lorimer Wilson, Managing Editor of munKNEE.com – Your KEY To Making Money

As can be seen in the chart above, the Gold:Lumber Ratio (GLR) declined 81% between March 2020, and the end of April 2021.

As seen in the chart above, the Dow has gone up by 81% since its low back in March 2020 and is currently showing no sign of weakness. That being said…

Conclusion

Assuming Gayed’s award-winning SSRN research paper is correct (and we have no reason to think otherwise) then:

  • the most recent 81% decline in the GLR would suggest that
  • the Dow might well follow suit in the weeks/months to follow.

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