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the ratio has formed a large base on top of the previous low back in 2000….the base say we can easily rally back to the 0.16 area, currently @ 0.28 which is 6 times current values …..if we get back to the highs, then says the ratio goes up @ 10 times from here.

A clear break of the top line, with a point perfect back test……one for the records in perfection so far.

Depending on how u draw the line or as they said in ancient times, depending on how thick your pencil was , we have yet to really break out in the GDX/GLD ratio….which explains why the shares still seem sluggish, relative to any PM rally, we are still not seeing the multiples of any PM rally in the shares and the Algo shorts are still happy…ie this rally is just another opportunity to add.

Though GDX.Au does now suggest the break out is real

Wheras Hui/AU, has broken and backtested the trend line …which says we should soon be running.

Were hearing a lot about possible recession coming. 12 to 18 months after the un- inversion time line to late 26 to mid 27.

I found this.

• • Average Lag: Historical studies tracking the normalization (steepening) of the curve show that downturns typically begin within 7 months of the un-inversion. [1]
  • Range: The time gap between the curve turning positive again and the start of a recession has historically ranged from as short as 2 months (such as prior to the 2001 recession) to as long as 14 months (before the 1990 downturn). [1]
  • Initial Inversion vs. Reversion: While market watchers often cite a 12 to 15 month average lag measured from the start of the original inversion, looking at the subsequent un-inversion often signals a tighter window for near-term economic stress.

Further I found with the S&P can remain profitable at first slowing during later months in one year and a down turn in another.

The S&P 500 historically shows short-term resilience immediately following a yield curve un-inversion, but often experiences mid-to-long-term underperformance as the economy edges closer to a recession. While a yield curve inversion acts as a long-term warning radar, the un-inversion process (when the spread between long- and short-term yields shifts back above 0%) is historically the real “countdown clock” for economic shifts. [1, 2, 3, 4, 5]

Historical data on the S&P 500’s average performance following an un-inversion reveals a distinct timeline: [1]

🕒 S&P 500 Performance Timeline After Un-Inversion

• 3 Months Later: +4.9% average return. The index has historically been positive in 80% of studied cycles during this immediate 90-day window, demonstrating a brief “last gasp” or relief rally.

• 6 Months Later: +2.2% average return. Momentum begins to stall significantly as macro pressures mount.

• 12 Months Later: +2.8% average return. This is vastly lower than the S&P 500’s baseline historical average 12-month return of over 9%. [1, 2, 3]

⚖️ The Underlying Economic Reality

The primary reason the un-inversion period triggers a slower market environment is its strong historical correlation with the onset of recessions. [1]

• The Recession Lag: Historically, a recession begins an average of 7 months after the yield curve un-inverts.

• Historical Extremes: Performance can vary wildly depending on whether the economy achieves a “soft landing” or enters a severe crisis. For example, the S&P 500 posted a massive +23.1% 12-month gain following the 1980 un-inversion cycle, but suffered a steep -17.3% drop over the 12 months following the 2001 un-inversion as the dot-com bubble unraveled. [1, 2]

Would you like to look closer at specific historical examples (like 1989 or 2007), or see how the Federal Reserve’s interest rate cuts typically align with these un-inversion windows? [1, 2]

papertradingjournal.com

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