Author: Alan Chen
An overlooked number
If your portfolio includes US stocks, gold, Bitcoin, or Altcoin, the following figure may change your perspective on these assets.
The S&P 500 divided by the price of gold (SPX:GOLD) is currently 1.45.
Most people don't care about this number. After all, the stock market is still hitting new highs, account balances are still rising, and Bitcoin is hovering at high levels. Who cares how it's calculated in gold?
But Benjamin Cowen is concerned. 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 it was followed by unpleasant events. More importantly, based on historical patterns in midterm election years, Cowen has provided a clear timeline:
- First half of 2026 (Q1-Q2): Gold may have peaked.
- Second half of 2026 (Q3-Q4): Gold experiences a significant correction, and cryptocurrencies follow suit, bottoming out.
- 2027-2028: A new cycle begins; this correction lays the foundation for the next major market rally.
But before that timeline arrives, there's a more pressing reality: while the S&P 500 has nominally hit new highs since 2021, if you divide it by the price of gold, the ratio has fallen from 2.7 to 1.45. In other words, the S&P 500 priced in gold has fallen 46% over the past four years.
Your stock account may show a profit, but if you convert it to gold, you're actually losing money. Your Bitcoin may still be at a high level, but it's continuously depreciating relative to gold. This isn't a theoretical game; it's a real shift in the relative value of assets—what Cowen calls "The Bleed."
The more important question is: will the monthly closing price break below the key level of 1.45? If it does, what history tells us will tell us what will happen next?
Part 1: Historical Verification of 1.45
Appeared three times, with three turning points.
The ratio of the S&P 500 to gold has touched or fallen below 1.45 at three key moments in financial history:
1929: The stock market was rejected at this level, which subsequently triggered the Great Depression.
1973: The stock market had rebounded to this level several times in the 1960s, but after falling below it in 1973, the market underwent a systemic transformation. What followed was a 50% correction and a decade of stagflation.
2008: It fell below 1.45 again, and the financial crisis followed.
In "A Deeply Concerning Chart for Stocks," Cowen points out that this is no coincidence. Every time this ratio breaks below 1.45, it signals a shift in the market from being stock-driven to being gold-driven.
It's now 2026, and we're back to 1.45.
The "Exception" Costs of 2020
Some might say, didn't it also touch 1.44 in March 2020? Why didn't it crash?
There was no collapse, but what was the cost?
The Federal Reserve printed $6 trillion, lowered interest rates to zero, and central banks around the world unleashed a massive liquidity injection. That wasn't a natural market recovery; it was the result of artificial intervention.
The question now is: if the 1.45 level is breached again, will the Fed still have the same space and tools? Inflation is not yet fully under control, interest rates remain high, and debt levels are already at record levels. This bailout could be even more costly, or simply impossible to implement.
Part Two: Rotation was a misjudgment, bloodshed was the reality.
The market won't go according to your expectations.
Many investors believe in the logic that gold prices will correct after rising too much, at which point funds will flow back into the stock market, causing the stock market to rise again.
Cowen refuted this argument using historical data.
In 1973 and 2008, when the S&P/Gold ratio broke down, there was no "money rotation." In reality, both stocks and gold fell, but stocks fell more sharply.
Cowen observed that when ratios break down, funds don't flow from gold to stocks, but rather to cash or other hard assets. Risk appetite declines, and investors choose defense over offense.
The Bleed: The Continuous Process of Relative Depreciation
Cowen proposed the concept of "The Bleed"—that risk assets will continuously depreciate relative to gold during a gold-dominated cycle.
This devaluation is independent of whether gold prices rise or fall:
- If gold prices rise, stocks may trade sideways or lag behind.
- If gold prices fall, stocks typically fall even more.
The result is that, regardless of how the price of gold fluctuates, the value of stocks relative to gold is shrinking.
This has been the reality over the past four years. The S&P 500, denominated in gold, has fallen by 46%. Investors holding equity funds may see paper gains, but those holding gold have seen even greater returns.
Part Three: Signs of Decline Are Accumulating
Warning of a hiring freeze
Unemployment is rising. Cowen points out an often overlooked detail: the rise in unemployment comes not only from layoffs, but also from companies stopping hiring new people.
According to the data he cited, the unemployment rate for young people aged 16-19 reached 15.7%, far higher than other age groups. This means that new entrants to the labor market face greater difficulties. Companies are not necessarily laying off older employees, but they have stopped expansionary hiring.
This is a classic sign of economic slowdown.
Trends in state data
Unemployment rates are currently rising in 27 states. Historically, when unemployment rates rise in all states, a recession is essentially confirmed. While we haven't reached that point yet, the trend is already established.
Cowen describes the current market state as "climbing the wall of worries"—it still looks like it's going up, but the support is weakening.
Part Four: Gold has completed its breakout.
Looking at it the other way around: Gold/S&P 500
If you turn the chart upside down and look at gold divided by the S&P 500 (Gold / S&P 500), the signal becomes clearer: gold has broken out of the stock market.
Cowen illustrated this pattern in "Gold Breaks out against Stocks." Gold broke through a long-term high in 2023, retraced to confirm it in 2024, and then accelerated its rise starting in 2025.
This is a classic pattern in technical analysis: breakout → pullback → continuation of the upward trend.
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 rather a broad trend shift.
The pullback in gold prices has been completed, and following this pattern, a sustained upward trend may follow.
The plight of Altcoin
The situation is even more dire for cryptocurrency investors.
Cowen exited Altcoin investing in 2022. His reasoning was that Altcoin were not only falling against Bitcoin, but also against gold and silver, even hitting new lows.
He emphasized, "Don't marry into a particular asset class. You should trade the market you're facing, not the market you want to trade."
Altcoin holders have experienced multiple devaluations over the past few years: they have been continuously losing value relative to gold, Bitcoin, and even stocks.
Part Five: Timeline for 2026
Gold's medium-term correction
Cowen studied historical performance in midterm election years (2014, 2018, 2022) and found that gold generally follows a pattern:
Peak expected in the first half of the year: High point likely to be reached in Q1 or early Q2
Second half correction: A significant pullback is expected in Q3 or Q4.
Laying the bottom for the next cycle
If this pattern continues to hold true, the path for gold in 2026 might be:
- Q1-Q2: Continued upward trend or consolidation at high levels
- Q3-Q4: Significant correction, searching for the bottom.
Cowen predicts: "A significant drop is likely in the third quarter, finding a low point, and then developing from there into 2027-2028."
Cryptocurrencies follow gold
Cowen believes that cryptocurrencies will only bottom out when gold bottoms out.
This means:
- If gold bottoms out in Q3/Q4 of 2026
- Cryptocurrencies will also find their bottom at the same time.
- Then the two will together begin a new cycle in 2027-2028.
For cryptocurrency investors, this means that now, before Q3 of this year, may not be the best time to position themselves. The real opportunity will come when gold corrects itself.
Two possibilities for the stock market
What will happen to the stock market when gold corrects in Q3/Q4?
Based on "The Bleed" theory, there are two possibilities:
Scenario A: Gold falls, but the stock market falls even more.
This is the pattern seen in 1973 and 2008. Gold will correct by 10%, while the stock market may correct by 30-50%.
Scenario B: Gold falls, stock market moves sideways or rises slightly.
This is a relatively mild situation, but the Gold/SPX ratio will still decline, meaning that gold will still outperform the stock market relatively.
Regardless of the scenario, the core logic remains unchanged: in a gold-dominated cycle, risky assets continue to depreciate relative to hard assets.
Part Six: What Indicators to Focus On
The monthly closing price is key.
Daily and weekly fluctuations are just noise. The monthly closing price is the true confirmation of the trend.
If the S&P/Gold ratio closes below 1.44 on a monthly basis, that's a significant signal. Historically, every time it's fallen below this level, it's been followed by a sharp correction or economic recession.
The ratio is currently around 1.45, and a breakout has not yet been confirmed on the monthly chart. However, the trend is clear: gold is strengthening, while the stock market is relatively weak.
Don't lock in a single asset.
Cowen's core argument, which he repeatedly emphasizes, is: Don't marry into a particular asset class.
If you only hold stocks and firmly believe that "they will definitely rise in the long run," you may experience a long period of relative depreciation.
If you only hold Altcoin and wait for "it'll be my turn sooner or later," you might find that that moment never comes.
The market will tell you what it's doing. Observe, adjust, and 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.
- Risky assets (stocks, Altcoin, high-yield bonds) are relatively depreciating.
This doesn't mean selling all your stocks and buying gold. But we need to realize that we are in a period of systemic transition, and strategies that worked in the past may not be effective in the future.
Conclusion
1.45 is not an ordinary number. It is an echo of 1929, a warning of 1973, and a foreshadowing of 2008.
Now it's back.
Benjamin Cowen did not predict a market crash, nor did he say that everyone should liquidate their positions. But he used data to point out that history has never been kind at this point.
You can choose to believe "this time is different," or you can choose to respect the laws of history.
You can either continue holding your stocks and wait for rotation, or you can reassess your asset allocation.
You can ignore 1.45, or you can take it as a reminder: in the financial markets, survival is more important than proving yourself right.
The monthly closing price will tell us the answer. Until then, stay clear-headed, stay flexible, and stay respectful of the data.
Because the market doesn't care what you want. It will only show itself as it is.
Data source:
- Benjamin Cowen YouTube video "A Deeply Concerning Chart for Stocks"
- Benjamin Cowen's YouTube video "Gold Breaks out against Stocks"
- S&P 500 and historical ratio data of gold
- Unemployment rate data from the U.S. Bureau of Labor Statistics
Disclaimer: This article is based on publicly available data and historical analysis and is for reference only. It does not constitute investment advice. Financial markets are risky; invest with caution.
This is Alan Chen. He uses data to understand trends and logic to protect his capital.
