Author: Alan Chen

An Overlooked Number

If your portfolio includes U.S. stocks, gold, Bitcoin, or altcoins, the following number may change your perspective on these assets.

The S&P 500 divided by the gold price (SPX:GOLD) is currently at a ratio of 1.45.

Most people don't care about this number. After all, the stock market is hitting new highs, the numbers in accounts are rising, and Bitcoin is hovering at high levels—who cares about how it calculates against gold?

But Benjamin Cowen does care. 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 what assets you hold in the next 2-3 years.

Why? Because the number 1.45 has appeared three times in financial history, and each time, the aftermath was not pleasant. More critically, Cowen provides a clear timeline based on historical patterns of midterm election years:

• First half of 2026 (Q1-Q2): Gold may peak
• Second half of 2026 (Q3-Q4): Gold will undergo a significant correction, with cryptocurrencies following suit and hitting bottom
• 2027-2028: A new cycle begins, with this correction laying the foundation for the next major market movement

But before this timeline arrives, there is a more urgent reality: from 2021 to now, the S&P 500 has nominally reached new highs, but if you divide it by the gold price, this ratio has dropped from 2.7 to 1.45. In other words: Over the past four years, the S&P 500 measured in gold has fallen by 46%.

Your stock account may show profits, but if calculated in gold, you are actually at a loss. Your Bitcoin may still be at high levels, but it is continuously depreciating relative to gold. This is not a theoretical game; it is a real change in the relative value of assets—Cowen calls it "The Bleed."

And the more important question is: will the key point of 1.45 be broken in the monthly close? If it breaks, history tells us what will happen next.

Part One: Historical Validation of 1.45

Three occurrences, 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, leading to the Great Depression.

1973: The stock market rebounded to this position multiple times in the 1960s, but after breaking below in 1973, the market underwent a systemic change. This was followed by a 50% correction and a decade-long period of stagflation.

2008: Once again, it broke below 1.45, leading to the financial crisis.

Cowen points out in "A Deeply Concerning Chart for Stocks" that this is not a coincidence. Each time this ratio breaks near 1.45, it marks a transition from a stock-dominated cycle to a gold-dominated cycle.

Now it is 2026, and we are back at 1.45.

The "exception" cost of 2020

Some may argue that 1.44 was touched in March 2020. Why didn’t it crash?

Indeed, it did not crash, but at what cost?

The Federal Reserve printed $6 trillion, interest rates were lowered to zero, and global central banks opened the floodgates. That was not a natural market recovery but a result of human intervention.

The question now is: if 1.45 breaks again, does the Federal Reserve have the same space and tools? Inflation is not fully controlled, interest rates are still high, and debt levels are at record highs. The cost of rescue this time may be higher or may not be feasible at all.

Part Two: Rotation is a Misjudgment, Bleeding is Reality

The market will not follow the script you expect

Many investors believe in a logic: if gold rises too much, it will correct, and then funds will rotate back to the stock market, causing the stock market to rise again.

Cowen refutes this view with historical data.

In 1973 and 2008, when the S&P/gold ratio broke, there was no "fund rotation." The reality is: both the stock market and gold fell, but the stock market fell more.

Cowen's observation is that when the ratio breaks, funds do not flow from gold to stocks but rather to cash or other hard assets. Risk appetite declines, and investors choose defense over offense.

The Bleed: A Continuous Process of Relative Depreciation

Cowen introduces 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 is rising or falling:

• If gold rises, stocks may stagnate or lag behind in gains
• If gold falls, stocks usually fall more

The result is: regardless of how gold prices fluctuate, the value of stocks relative to gold is shrinking.

This has been the reality over the past four years. The S&P 500 measured in gold has already fallen by 46%. Investors holding stock funds may see nominal gains, but those holding gold have higher returns.

Part Three: Recession Signals are Accumulating

Warnings of Hiring Freezes

Unemployment rates are rising. Cowen points out a frequently overlooked detail: the rise in unemployment is not only due to layoffs but also due to companies stopping new hiring.

According to the data he cites, the unemployment rate for young people aged 16-19 has reached 15.7%, far exceeding other age groups. This means that new entrants to the labor market face greater difficulties. Companies may not necessarily cut existing employees but have stopped expansionary hiring.

This is a classic signal of economic slowdown.

Trends in State Data

Currently, 27 states have rising unemployment rates. Historically, when all states experience rising unemployment, a recession is essentially confirmed. Although we are not there yet, the trend is forming.

Cowen describes the current state of the market as "climbing the wall of worry"—it appears to still be rising, but the support is weakening.

Part Four: Gold has Completed its Breakout

Looking Back: Gold/S&P 500

If we invert the chart to look at gold divided by the S&P 500 (Gold / S&P 500), the signal is clearer: Gold has completed its breakout against the stock market.

Cowen demonstrates this pattern in "Gold Breaks out against Stocks." Gold broke through long-term highs in 2023, confirmed with a retest in 2024, and began accelerating upward 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 Bitcoin dominance, palladium, the Hang Seng Index, and several other markets. This is not an isolated phenomenon but a widespread trend shift.

The retest of gold has been completed, and according to this pattern, it may enter a phase of sustained upward movement.

The Situation of Altcoins

For cryptocurrency investors, the situation is even more severe.

Cowen exited altcoin investments in 2022. His reasoning is: altcoins are not only falling against Bitcoin but also against gold and silver, even hitting new lows.

He emphasizes: "Do not marry a specific asset class. You need to trade the market you face, not the market you wish for."

Altcoin holders have experienced multiple depreciations over the past few years: continuously losing value relative to gold, Bitcoin, and even stocks.

Part Five: The 2026 Timeline

Mid-term Correction for Gold

Cowen studied the historical performance of midterm election years (2014, 2018, 2022) and found that gold typically follows a pattern:

Peaking in the first half: Reaching a high in Q1 or early Q2

Correction in the second half: Significant pullback in Q3 or Q4

Laying the foundation for the next cycle

If this pattern continues to hold, the path for gold in 2026 may be:

• Q1-Q2: Continue rising or oscillating at high levels
• Q3-Q4: Significant correction, seeking a bottom

Cowen's prediction is: "It may drop significantly in the third quarter, find a low point, and then develop from there, entering 2027-2028."

Cryptocurrencies Following Gold

Cowen believes that cryptocurrencies will only bottom out when gold hits its bottom.

This means:

• If gold bottoms out in Q3/Q4 of 2026
• Cryptocurrencies will also find their bottom at the same time
• Then both will start a new cycle in 2027-2028

For cryptocurrency investors, this means that from now until before Q3 of this year may not be the best time to position. The real opportunity will wait for gold to correct properly.

Two Possibilities for the Stock Market

When gold corrects in Q3/Q4, what will happen to the stock market?

Based on "The Bleed" theory, there are two scenarios:

Scenario A: Gold falls, and the stock market falls more

This is the pattern of 1973 and 2008. If gold corrects by 10%, the stock market may correct by 30-50%.

Scenario B: Gold falls, and the stock market stagnates or rises slightly

This is a relatively mild situation, but the Gold/SPX ratio will still decline, meaning gold will continue to outperform the stock market.

Regardless of which scenario occurs, the core logic remains unchanged: in a gold-dominated cycle, risk assets continuously depreciate relative to hard assets.

Part Six: What Indicators to Focus On

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 is below 1.44, that is an important signal. Historically, every time it has fallen below this level, significant corrections or economic recessions have followed.

Currently, the ratio is around 1.45, and the monthly close has not yet confirmed a break. But the trend is already clear: gold is strengthening, and the stock market is relatively weakening.

Do not lock into a single asset

Cowen repeatedly emphasizes the core point: Do not marry a specific asset class.

If you only hold stocks, firmly believing "it will definitely rise in the long term," you may experience a prolonged period of relative depreciation.

If you only hold altcoins, waiting for "it will eventually be my turn," you may find that moment never arrives.

The market will tell you what it is doing. Observe, adjust, adapt, rather than cling 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 depreciating relatively

This does not mean you should completely liquidate stocks to buy gold. But it is essential to realize: we are in a period of systemic transition, and strategies that were effective in the past may fail in the future.

Conclusion

1.45 is not an ordinary number. It echoes 1929, warns of 1973, and previews 2008.

Now it has returned.

Benjamin Cowen does not predict that the market will definitely crash, nor does he say you must liquidate everything. But he points out with data: 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 holding stocks waiting for rotation, or you can reassess 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 alert, stay flexible, and respect the data.

Because the market does not care what you want. It will only show its true nature.

Data Sources:

• Benjamin Cowen YouTube video "A Deeply Concerning Chart for Stocks"
• Benjamin Cowen YouTube video "Gold Breaks out against Stocks"
• Historical ratio data of S&P 500 and gold
• U.S. Bureau of Labor Statistics unemployment rate data

Disclaimer: This article is based on publicly available data and historical analysis for reference only and does not constitute investment advice. Financial markets carry risks; invest cautiously.

This is Alan Chen. Use data to see trends clearly and logic to protect your principal.

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