For the first time ever, the total value of the US stock market is double the value of the real economy. A real financial bubble. Previous stock-to-GDP ratio highs were followed by significant gold price gains.
This time I expect the gold price to rise again too. The Stock market is an huge bubble
. The Fed know this and will print much more money next years . A gentle exit from the bubble will hardly be possible anymore. Even with a sideways range, it will take many years for the equity markets to return to normal valuation.
The only undervalued market, is the gold and silver market . Newmont mining has to increase by 130% to have roughly the same rating as the S&P 500 at the moment . Some goldstocks have a PE ratio of under 10 , even 6 and paying dividends too .
This is also the reason why the Dow and the S&P 500 are becoming more and more technology-intensive. Without them the PE ratio would be much higher!
If you take a closer look at the GDX, it is very close to a massive support zone between 33 and 32 points. Technically speaking, a pullback to the breakout zone of 2020. And the GDX took over 7 years to overcome this zone at 32.
Nice weekend !