Dow Gold Ratio Strategy

James Ragsdale Rank: 142 Followers: 1 Votes: 0 Years Member: 9 Last Update: 1 February 2018, 9:46 Categories: ETFs
General Market Commentary

The Dow Gold Ratio Strategy (DGR) IS ABOUT THE LONG TERM PICTURE. Eliminate the short term noise and you will see where the markets are going.

There once was a man walking his dog from Fifth Avenue to Grand Central Station. The dog, on a leash, darted this way and that way. The overall trend of the man and his dog was a 3 mile per hour straight line to Grand Central. The media though focused on the dog and his eratic directions trying to figure out where the man was going. All they had to do is look at the long term trend of his 3 miles an hour walk to Grand Central to see where he was going. The dog's movements were noise. So we try here to watch the man, not the dog.

I want to point one item out very clearly. These charts are not predicting anything. They are REACTIVE. The philosophy is that the Trend Continues Until It Doesn't. So when I say don't buy oil or oil stocks, I'm not predicting anything. I'm simply saying oil is falling and I will invest that way until the DGR tells me to change. So I am reacting to the change in the DGR and not predicting WHEN it might change.

What do the charts say now. Own stocks, not gold or silver, not commodities. You can own bonds as the long Treasury bond is approaching the highest level it has ever been. It also says silver, platinum and gold coins all continue to fall in price. It also tells you oil is going down. Global fracking is going to take oil down to level we haven't seen in decades, but that's another story. With continuing falling commodity prices, the economy will eventually pick up. Gasoline prices are down 50% from their highs isn February 2013. That is tremendous help to Fed-ex and UPS as well as trucking companies. Think how that will affect all companies that ship their goods like Walmart.

More information can be found at


01 - Recommended positions since 1/23/13 switch

What a stellar year for the Dow Gold Ratio Strategy. If you didn't use leverage, your SPY position did very well. If you used leverage, UPRO was up over 70% and TQQQ was up 118%. If you went with the sector strategy, NAIL killed with returns of over 140%! The Dow Gold Ratio Strategy is market timing for long-term investors. It gives you the confidence to use leverage.

A Year To Date Return Chart of Recommended Positions

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Figure 01: 1980-2000 Secular Bull Market - Dow Jones 30 Industrial Index

Figure 02: Cyclical Markets During Secular Bear Market

Figure 03: Amazon over Apple

Figure 04: Dow Gold Ratio Since 1980

Figure 05: Dow Gold Ratio Slope Since 1980

Figure 06.1 2007-2009 Market Crash

Figure 06.2 2007-2009 Market Crash

Figure 06: Equity Indexes Are Pretty Much The Same

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