Dow Gold Ratio.

We don’t take note of the Dow-gold ratio on a daily basis, but for the record, it stands today at roughly 9:1. We mention this because Byron King sent along this chart going all the way back to the year Charles Dow created his famous index of blue chips.

For the uninitiated, let’s back up. The chart measures the number of ounces of gold it would take to buy the Dow Jones industrial average. So in 1980, for example, when the Dow sat around 800 and gold was $800 an ounce, the ratio was 1:1. At the height of the tech bubble in 1999, it was 44:1.

Notice where we are now… and where in all likelihood we’re going based on what’s happened before. “That last drop of gold, from 9 ounces to the 1-2 ounce range,” says Byron, “can bring a lot of hurt to the stock market along the way.”

“One way or another, we'll see, say, $5,000... either $5,000 gold or $5,000 Dow. Even if the Dow stays at the current 8,000, that implies, say, $4,000 gold at a 2-to-1 ratio.”

“It ain't over. Fat Lady is still warming up backstage.”

Byron’s just put the final touches on a strategy to put this trend to maximum advantage. He doubts few people will have the stomach for it, but the few who do will get “miserable rich.” No, that’s not grammatical, but he promises an explanation. Details coming to your inbox later today.