It is fascinating to watch both gold and the S&P 500 push to new highs at the same time. They actually should be inversely correlated since gold rallies on mistrust and equities rally on trust. Then again, maybe they are consistent with each other. Why? Because what gold does not trust is the global monetary system. And while the S&P 500 has pushed to new highs, the financials are lagging and are still around 4% below their recent highs. In fact, the relative strength in the S&P financials is sitting at its third lowest level in the past four months. But as we saw in 2007 when the financials peaked long before the overall market did, this anomaly is usually one that does not foreshadow a happy ending.
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