timwest

SPY reduced by CPI - shows NO NEW HIGH

1167 6 21
Apart from a catchy rhyme - the S&P500             has not bested its peak level, when using the SPY             , or the investible index of the S&P500             .

That's quite a non-return over 15 years. Zero return despite two massive losing streaks of 48% and 53% (using only monthly closes in the calculation). Granted, this doesn't include dividends paid out on SPY             , which has been roughly 1.X% a year. And, of course, I don't think there is a person in America who believes that the CPI             is calculated correctly at all. We can thank our US Gov't for having a conflict of interest in calculating the CPI             to keep the payments to social security as low as possible with the "Cost of Living Adjustments" negatively hurt by low CPI             figures.

Either way, we can thank the internet for keeping inflation at bay and promoting global competition and rapid advancements in productivity for keeping inflation down too.

I was sharing this chart with my family and thought you would enjoy seeing it too.

All the best,

Tim

Saturday, 3:01PM EST 9/19/2015

Subscribe to my indicator package KEY HIDDEN LEVELS $20/mo or a discount for a year and join in the trading room KEY HIDDEN LEVELS here at TradingView.com
Still NO NEW HIGH
+1 Reply
What no one has commented on is that the S&P500 fell by close to 75% when you go from the top in 2000 to the low in 2009 - now THAT is a MAJOR BEAR MARKET!
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timwest timwest
It was a bit less than that...
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Did you divide the S&P 500 data by the CPI? How did you construct this graph?
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timwest honeybadger
At TradingView you can divide two symbols and make a ratio. You use a "/" to separate the symbols. So you can see the SPY/CPIAUCSL is the symbol that is being plotted. So it is the SPY divided by CPI. This reduces the level of the SPY whenever prices rise by the artificial increase of inflation (as measured by a very inaccurate CPI measure). Either way. I also made it a Monthly graph because you need long term data to see long term trends.
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Tim, this is practically how USDJPY looks...thanks for sharing, looks gloomy.
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