This is a simple study where I use the SPX to GDP ratio on the log scale in an attempt to determine how far (on the long-term) the current post-COVID sell-off rally can go. As you see the ratio is within a Channel Up since 1971 with clear Higher Highs and Higher Lows. I used the Fibonacci Channel to identify the pressure points and as you see the 0.382 - 0.618...
Playing with numbers, trying to view equity valuations through the lens of the modern Fed era. Realtive to M2 it looks like we're in a Bear-Market-Rally even though indexes are at ATH. It looks like we now live in a bizarro-world where equity prices in a Bear-Market go up while the money supply vastly outpaces productivity. The Fed is now saying that they...
Milton Friedman's Money-Supply Rule: Growth of the Money Supply << Rate of Growth of Real GDP = Recession --There is not enough money to buy what has been produced. Growth of the Money Supply >> Rate of Growth of Real GDP = Inflation --There is an abundance of money and not enough goods - prices will rise Growth of the Money Supply == Rate of Growth of...
Tech is clearly a bigger part of the real economy (GDP) today compared to 20 years ago, but even with that in mind this market is in the Stratosphere. Will everyone keep buying no matter the price because TINA (There is no alternative) due to artificially low interest rates. Do recessionary conditions in the broad economy no longer matter? Do business...
Congratulations to all traders who went short with us yesterday. Another success to add to our analysis records. Just as we expected, Dax slipped away from the consolidation range and took a prudent southern direction right after the open. The momentum was rapid and the price pierced through two support levels. If you were aiming our target at 12 592, we...
Stock market - Against all odds, S&P index has risen almost 32% since hitting a low for the year on March 23. The fact that it happened after a ferocious plunge of 35% between Feb. 20 and March 23, the most devastating sell-off since the great depression, made the feat even more remarkable. As a matter of fact, the market posted its best quarter since 1998,...
The impossible "V-shaped" The year 2020, a bad memory quickly forgotten? No, warn more and more economists, alarmed by the violence of the shock in the first half. They expect a slow recovery, provided that a second wave of the new coronavirus does not strike. The IMF has also made it clear that, despite the expected rebound, world GDP in 2021 would come out cut...
Some that claim that markets are forward looking and see better things ahead. These markets saw nothing coming and ran right into disaster and now they’re simply jumping on the Fed liquidity train again, the very train that got them trapped in the first place. No lesson has been learned. How do we know that? Because the very same mistakes are again repeated and...
As my followers know, I've been mostly sitting in cash and silver waiting for sanity to return to this market. Y'all bought stocks, and all I bought was popcorn, and it turns out the joke's on me. Here's how big the gap between price and fundamentals has gotten. On June 1, GDPNow reduced its Q2 GDP forecast to -52.8%. This is down over 10% in the last week. As...
There is undeniable toxicity in the economy. Fear sent the TVIX to an over 800% bullrun followed by market calming. So, is it over? Can we expect another run from TVIX? The answer: Yes! One only has to look at the economics to see what is coming and already here. Today, we are looking at some of the worst numbers in economic history. I've always said that the...
Week ahead: GDP and Inflation It is a busy week ahead for the markets as the Coronavirus is still front and center. Oil is up 75% in the past month while tensions between the United States and China escelates. Traders and investors should take caution when entering into the markets this week.. As of today, the Coronavirus death toll stands at 343,116 as the...
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T1 was crossed back in US session on Friday, but analysis and forecast is still same. Short can be more powerful. I think technical analysis is simple and complete, no more focus on fundamentals. Q/Q GDP of Japan of quite positive today regardless pandemic issues.
This ratio is indicating more pain to come from macro indicators such as the ISM Manufacturing PMI..
Looking at how many people got infected and how many died, seems like countries that used cheap drugs to treat this cold have slowed the spread most and also have much less deaths. Countries with really lots of deaths have went full lockdown and GDP took a huge hit, like -15% projections. 15% of GDP... could buy a WHOLE lot of drugs with this... Right now,...
This week we might see slight pullback from the purple support zone I marked on the chart(around 99.00 and 98.80) Those zones are buy signals and it can go to the next monthly resistance around 99.78 before thursday In the next days we having consumer prices (news) which are mostly positive( we people always consume and also during corona times) But i would...