Top of the world... again.
The scale of what is happening cannot be understated.
Massive amounts of money have been printed, then burned immediately.
It is as if the FED is trolling us... Or we are being trolled by our own minds.
Equities reflect the mental state of investors, big and small alike.
The dilemma is causing headaches, it has reached a paradoxical state.
No human, not even ChatGPT can solve paradoxes, it is not suicidal.
This chart is one attempt into clearing the picture.
This exotic chart attempts to calculate the price of equities based on the current state of yield curve inversion. It can help calculate the "absolute" strength of indices like IXIC. Similar calculations can be made using the DXY*IXIC/100 formula. It has reached with incredible accuracy the 1.272 retracement, as shown in the main chart.
In short, the higher this chart goes, the better the QE Machine performs.
The Yield Curve is now showing a clear warning signal.
I have been watching closely the price action, now it is more certain than ever that the yield curve may correct sooner than later. A correction of the yield curve has usually led to severe recessions.
After all of this analysis, still no conclusion about equities...
Occam's razor could be the solution. Clear and simple analysis gives the best results.
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1. Simple Price Patterns.
Sometimes, the simplest answer is the correct one.
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2. Classic Dow Theory.
It dictates that the weakness of the few may lead to the weakness of the many. DJI is the first to show signs of weakness. Will wider indices like SPX weaken?
With bear flags clearly appearing, and an apparent HnS pattern forming, things couldn't get worse. The post-GFC bull market may fail any time now.
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3. The Basis of Stock Market
There is this rule that everybody knows and most forget. Price is split between two areas, above and below average. When price is above average, sellers dictate price. Similarly, when price is below average, buyers dictate prices.
Price is higher than average for a long-long time. It is one of the longest-standing equity bull markets. For many years, equity prices are facing increasing selling pressure and decreasing buying pressure. Why? Because investors progressively cash-out of equities.
There may be too little interest for serious investors to buy into equities. Equities are too expensive and too risky for them to be a viable investment decision. You can find more about investment risk in @SpyMasterTrades 's idea linked below.
Tread lightly, for this is hallowed ground.
-Father Grigori
P.S. There is much information I may have left out of this idea. I don't want to be repetitive and I try to keep ideas short and clear. You can find more info about the QE Machine in the following idea.
Equities reflect the mental state of investors, big and small alike.
The dilemma is causing headaches, it has reached a paradoxical state.
No human, not even ChatGPT can solve paradoxes, it is not suicidal.
This chart is one attempt into clearing the picture.
In short, the higher this chart goes, the better the QE Machine performs.
The Yield Curve is now showing a clear warning signal.
After all of this analysis, still no conclusion about equities...
Occam's razor could be the solution. Clear and simple analysis gives the best results.
---
1. Simple Price Patterns.
---
2. Classic Dow Theory.
It dictates that the weakness of the few may lead to the weakness of the many. DJI is the first to show signs of weakness. Will wider indices like SPX weaken?
With bear flags clearly appearing, and an apparent HnS pattern forming, things couldn't get worse. The post-GFC bull market may fail any time now.
---
3. The Basis of Stock Market
There is this rule that everybody knows and most forget. Price is split between two areas, above and below average. When price is above average, sellers dictate price. Similarly, when price is below average, buyers dictate prices.
Price is higher than average for a long-long time. It is one of the longest-standing equity bull markets. For many years, equity prices are facing increasing selling pressure and decreasing buying pressure. Why? Because investors progressively cash-out of equities.
There may be too little interest for serious investors to buy into equities. Equities are too expensive and too risky for them to be a viable investment decision. You can find more about investment risk in @SpyMasterTrades 's idea linked below.
Tread lightly, for this is hallowed ground.
-Father Grigori
P.S. There is much information I may have left out of this idea. I don't want to be repetitive and I try to keep ideas short and clear. You can find more info about the QE Machine in the following idea.
Comment:
Russel is printing a massive bear flag.
Comment:
Comment:
Equities vs Bonds
Have we reached a ceiling?
Comment:
Exotic charts are the bomb.
Until SPX itself becomes the bomb.
Comment:
It is nice to clear this out:
Comment:
Simple as an elephant...
Comment:
Trapped!
Comment:
Where does this lead to?
Comment:
Minecraft World.
Maybe, the few will beat the many.
And maybe the only mechanism for this to work is stagnation / stagflation.
Maybe, the few will beat the many.