The chart on the left is SP500 as a proportion of the total dollars available. We can see that the percentage of funds allocated to the SP500 is actually just now hitting the highs of 2008. All the action from 2009-2021 was below the 2008 peak. DEC 2021 broke the 2008 high for the first time in 12 years.
It is logical to expect SP 500 to continue to move higher into a "mania" phase over the next several years. The standard chart will continue to look grossly over extended but this is because the standard USD valuation does not account for the fact that each $1 USD actually represents a smaller percentage of overall economic value. So to keep pace the USD chart has to show the SP500 is worth an exaggeratedly large amount of USD because each USD is worth less.
Mathematically a lot of the growth we've seen in the Stock market is more because the denominator is getting smaller instead of the top number getting bigger.
Ignoring whether you think the value created is real or not. From a pure charting standpoint, you can enter a position into the SP500 on the breakout from the 2008 high, with a tight stop loss below the break out level. Either the value of SP500 drops below this point (about 6%) or the chart upward into the relatively untested region between the 2000 and 2008 highs. . . which could see anywhere from a 100%-400% gain in nominal terms for the SP500 over the next several years.
Risk to Reward here is quite attractive in my humble opinion.
It is logical to expect SP 500 to continue to move higher into a "mania" phase over the next several years. The standard chart will continue to look grossly over extended but this is because the standard USD valuation does not account for the fact that each $1 USD actually represents a smaller percentage of overall economic value. So to keep pace the USD chart has to show the SP500 is worth an exaggeratedly large amount of USD because each USD is worth less.
Mathematically a lot of the growth we've seen in the Stock market is more because the denominator is getting smaller instead of the top number getting bigger.
Ignoring whether you think the value created is real or not. From a pure charting standpoint, you can enter a position into the SP500 on the breakout from the 2008 high, with a tight stop loss below the break out level. Either the value of SP500 drops below this point (about 6%) or the chart upward into the relatively untested region between the 2000 and 2008 highs. . . which could see anywhere from a 100%-400% gain in nominal terms for the SP500 over the next several years.
Risk to Reward here is quite attractive in my humble opinion.
