See the similarities on the and . This seems to suggest that some time before the end of July 2020, we will see a top in the market.
The Fed has stated they are not considering negative interests rates. However, if you notice during the previous two recessions at the top of the bear market rallies marked with the red vertical lines, the Fed had to continue lowering rates. Therefore, if the Fed stays true to their word and does not push rates into negative territory, it's possible that this 2020 Recession/Depression will be significantly worse.
If the Fed does not push rates negative, it's possible that some form of sustained "helicopter money" could be coming.
I applied 1-yr Bollinger bands with 2std dev. as well as 3, 5 and 8-yr moving averages. Vertical lines are color-coded to each MA and represent when each MA is crossed by the 1-yr MA. The black horizontal lines mark the tops of each bear market rally; It's still hard to say for sure if this top was back in June or if we'll push higher in July.
I also marked Sept. 2020 as a timeframe to watch for a potential cross of the 1-yr and 5-yr MA. If we see that happen, I would consider it further evidence that this idea may play out.
M2 is currently sitting just above 18,250. 18,250*0.22 = $4015.
That $4k mark will rise as M2 increases. For every 1,000 rise in M2, add $220 to the value SPX has to reach in order for SPX/M2 to reach it’s recent ATH from Feb. 2020.
Awesome chart mate, thanks!
Current M2 = 18286
50 fib = 0.205
61.8 fib = 0.234
So, 50 fib: 18286 * 0.205 = $3750
and, 61.8 fib: 18286 * 0.234 = $4280
I would be careful assuming this 38.2 fib won't hold though. Notice how the previous bounces in May 01 & May 08 seemed like they were breaking upward to the next fib, however, that didn't end up playing out.