Author:Alan Chen
A Neglected Number
If your investment portfolio includes U.S. stocks, gold, Bitcoin, or altcoins, the following number might change your perspective on these assets.
The S&P 500 divided by the price of gold (SPX:GOLD) – this ratio is now 1.45.
Most people don't care about this number. After all, the stock market is still hitting new highs, the numbers in accounts are still rising, Bitcoin is hovering at high levels, who cares how it calculates against gold?
But Benjamin Cowen cares. He recently released two videos specifically analyzing this ratio and its impact on the entire cycle of stocks, gold, and cryptocurrencies. His conclusion is straightforward: we are standing at an extremely dangerous historical juncture, and this juncture will determine which assets you hold for the next 2-3 years.
Why? Because the number 1.45 has appeared three times in financial history, and what happened after each time was not pleasant. More crucially, based on the historical patterns of midterm election years, Cowen provides a clear timeline:
- First Half of 2026 (Q1-Q2): Gold may peak
- Second Half of 2026 (Q3-Q4): Gold undergoes a significant correction, cryptocurrencies follow and bottom out
- 2027-2028: A new cycle begins, this correction lays the foundation for the bottom of the next major rally
But before this timeline arrives, there is a more pressing reality: from 2021 to now, the S&P 500 has nominally reached new highs, but if you divide it by the price of gold, this ratio has fallen from 2.7 to 1.45. Put another way: over the past four years, the S&P 500 index, priced in gold, has fallen by 46%.
Your stock account might show a profit, but if converted into gold, you are actually losing money. Your Bitcoin might still be at high levels, but it is also continuously depreciating relative to gold. This is not a theoretical game; it's the real change in the relative value of assets—what Cowen calls "The Bleed".
And the more important question is: Will this key level of 1.45 be broken on a monthly close? If it breaks, history tells us what will happen next.
Part 1: Historical Validation of 1.45
Three Appearances, Three Turning Points
The ratio of the S&P 500 divided by gold has touched or fallen below 1.45 at three critical moments in financial history:
1929: The stock market was rejected at this level, subsequently triggering the Great Depression.
1973: The stock market bounced back to this level multiple times in the 1960s, but after breaking below it in 1973, a regime change occurred in the market. What followed was a 50% correction and a decade of stagflation.
2008: It broke below 1.45 again, and the financial crisis ensued.
Cowen points out in "A Deeply Concerning Chart for Stocks" that this is not a coincidence. Every time this ratio breaks down around 1.45, it marks a shift in the cycle from stock dominance to gold dominance.
Now it's 2026, and we are back at 1.45.
The Cost of the 2020 "Exception"
Some might say, didn't it also touch 1.44 in March 2020? Why didn't it crash then?
It indeed didn't crash, but what was the cost?
The Federal Reserve printed $6 trillion, lowered interest rates to zero, and global central banks opened the floodgates together. That wasn't a natural market recovery; it was the result of artificial intervention.
The question now is: If 1.45 breaks again, does the Fed have the same room and tools? Inflation is not yet fully under control, interest rates are still high, and debt levels are already at record highs. The rescue cost this time might be higher, or it might not be implementable at all.
Part 2: Rotation is a Misjudgment, The Bleed is Reality
The Market Doesn't Follow the Script You Expect
Many investors believe in a logic: when gold rises too much, it will correct, and then funds will rotate back into stocks, and stocks will rise again.
Cowen refutes this view with historical data.
In 1973 and 2008, when the S&P/Gold ratio broke down, there was no "fund rotation." The actual situation was: both stocks and gold fell, but stocks fell more.
Cowen's observation is: when the ratio breaks, funds do not flow from gold to stocks, but to cash or other hard assets. Risk appetite declines, and investors choose defense over offense.
The Bleed: The Ongoing Process of Relative Depreciation
Cowen proposed the concept of "The Bleed"—in a gold-dominated cycle, risk assets will continuously depreciate relative to gold.
This depreciation does not depend on whether gold rises or falls:
- If gold rises, stocks may move sideways or underperform
- If gold falls, stocks usually fall more
The result is: regardless of how the price of gold itself fluctuates, the value of stocks relative to gold is shrinking.
This has been the reality of the past four years. The S&P 500, priced in gold, has fallen 46%. Investors holding stock funds might see paper gains, but investors holding gold have achieved higher returns.
Part 3: Recession Signals Are Accumulating
The Warning of Hiring Freezes
Unemployment is rising. Cowen points out a detail often overlooked: The rise in unemployment comes not only from layoffs but more from companies stopping the hiring of new people.
According to data he cites, the unemployment rate for young people aged 16-19 has reached 15.7%, much higher than other age groups. This means new entrants to the labor market face greater difficulties. Companies aren't necessarily cutting veteran employees, but they have stopped expansionary hiring.
This is a classic signal of an economic slowdown.
Trends in State Data
Unemployment rates are now rising in 27 states. Historically, when unemployment rates rise in all states, a recession is basically confirmed. Although we are not there yet, the trend is forming.
Cowen uses "climbing the wall of worry" to describe the current state of the market—it seems to be still rising, but the support is weakening.
Part 4: Gold Has Already Broken Out
Look at it Inverted: Gold / S&P 500
If you invert the chart and look at Gold divided by the S&P 500 (Gold / S&P 500), the signal is clearer: Gold has already broken out against stocks.
Cowen demonstrates this pattern in "Gold Breaks out against Stocks". Gold broke through long-term highs in 2023, retested and confirmed the breakout in 2024, and began accelerating its rise in 2025.
This is a classic pattern in technical analysis: Breakout → Retest → Continue rising.
Cowen compared this chart with other assets and found similar patterns appearing in multiple markets, including Bitcoin dominance, palladium, and the Hang Seng Index. This is not an isolated phenomenon but a broad-based trend shift.
Gold's retest is complete; according to this pattern, it may now enter a phase of sustained upward movement.
The Situation for Altcoins
For cryptocurrency investors, the situation is more severe.
Cowen exited his altcoin investments in 2022. His reasoning: Altcoins are not only falling against Bitcoin but also against gold and silver, even hitting new lows.
He emphasizes: "Don't marry an asset class. You trade the market you're in, not the market you want."
Altcoin holders have experienced multiple depreciations over the past few years: continuously losing value relative to gold, relative to Bitcoin, and even relative to stocks.
Part 5: The 2026 Timeline
Gold's Mid-Term Correction
Cowen studied the historical performance of gold in midterm election years (2014, 2018, 2022) and found that gold typically follows a pattern:
Peak in the first half: Reach a high in Q1 or early Q2
Correction in the second half: Experience a significant pullback in Q3 or Q4
Lay the foundation for the next cycle's bottom
If this pattern continues to hold, the path for gold in 2026 could be:
- Q1-Q2: Continue rising or oscillate at high levels
- Q3-Q4: Significant correction, searching for a bottom
Cowen's prediction is: "It could fall significantly probably in the third quarter, find a low, and then build on that to develop into 2027-2028."
Cryptocurrencies Follow Gold
Cowen believes that cryptocurrencies will only bottom when gold bottoms.
This means:
- If gold bottoms in Q3/Q4 of 2026
- Cryptocurrencies will also find a bottom at the same time
- Then both will together start the new cycle of 2027-2028
For cryptocurrency investors, this means that the time from now until Q3 of this year might not be the best time to position. The real opportunity awaits gold's correction to completion.
Two Possibilities for Stocks
When gold corrects in Q3/Q4, what will happen to stocks?
Based on "The Bleed" theory, there are two scenarios:
Scenario A: Gold falls, stocks fall more
This was the pattern in 1973 and 2008. Gold corrects 10%, stocks might correct 30-50%.
Scenario B: Gold falls, stocks move sideways or rise slightly
This is a relatively mild scenario, but the Gold/SPX ratio would still decline, meaning gold's relative performance would still outperform stocks.
Regardless of the scenario, the core logic remains unchanged: In a gold-dominated cycle, risk assets continuously depreciate relative to hard assets.
Part 6: What Indicators to Watch
Monthly Close is Key
Daily and weekly fluctuations are just noise. The monthly close is the true trend confirmation.
If the monthly close of the S&P/Gold ratio falls below 1.44, that is an important signal. Historically, every time it broke below this level, a significant correction or economic recession followed.
The ratio is currently around 1.45, and the monthly close has not confirmed a breakdown yet. But the trend is clear: gold is strengthening, and stocks are relatively weakening.
Don't Lock Yourself into a Single Asset
The core point Cowen repeatedly emphasizes is: Don't marry an asset class.
If you only hold stocks,坚信"long-term it will definitely rise", you might experience a long period of relative depreciation.
If you only hold altcoins, waiting for "my turn will come eventually", you might find that moment never arrives.
The market will tell you what it is doing. Observe, adjust, adapt, rather than clinging to beliefs.
Current Market Structure
Based on Cowen's analysis, the current market structure shows:
- Hard assets (gold, cash, government bonds) are strengthening
- Risk assets (stocks, altcoins, high-yield bonds) are relatively depreciating
This is not to say you should sell all your stocks and buy gold. But you need to be aware: We are in a period of regime change, and strategies that worked in the past may fail in the future.
Conclusion
1.45 is not an ordinary number. It is the echo of 1929, the warning of 1973, the rehearsal of 2008.
Now it's back.
Benjamin Cowen does not predict that the market will definitely crash, nor does he say you must sell everything. But he uses data to point out: History has never been gentle at this point.
You can choose to believe "this time is different," or you can choose to respect historical patterns.
You can continue to hold stocks waiting for rotation, or you can re-examine your asset allocation.
You can ignore 1.45, or you can take it as a reminder: In financial markets, survival is more important than proving yourself right.
The monthly close will tell us the answer. Until then, stay清醒, stay flexible, stay respectful of the data.
Because the market doesn't care what you want. It will only show what it truly is.
Data Sources:
- Benjamin Cowen YouTube video "A Deeply Concerning Chart for Stocks"
- Benjamin Cowen YouTube video "Gold Breaks out against Stocks"
- S&P 500 vs. Gold historical ratio data
- U.S. Bureau of Labor Statistics unemployment data
Disclaimer: This article is based on public data and historical analysis, for reference only, and does not constitute investment advice. Financial markets involve risks, invest with caution.
This is Alan Chen. Use data to see the trend, use logic to protect your principal.
