Before May 2020, M2 consists of M1 plus (1) savings deposits (including money market deposit accounts); (2) small-denomination time deposits (time deposits in amounts of less than $100,000) less individual retirement account (IRA) and Keogh balances at depository institutions; and (3) balances in retail money market funds (MMFs) less IRA and Keogh balances at...
If the m2 money supply increased by 40% within 1 year, wouldn't make sense that the bitcoin price would be 40% higher than it normally would be. This chart shows a macro price target of around 188k priced against m2, which would give a normally priced bitcoin target around 250k.
In this analysis, I'll take a look at the US Dollar Index (DXY), analyze it from both a technical and fundamental aspect, and look at what this could imply for the asset markets this year.
DXY Technical Analysis
- To begin with, we can take a look at the monthly chart for the dollar index
- Since 2001, it has been on a downtrend, and ever since 2008, it has...
Pareto's law says that roughly the top 20% of the market constituents should roughly represent 80% roughly of the overall market cap, and vice versa: the bottom 80% of constituents will represent 20% of the overall market cap.
When price seems irrational, and higher cap stocks start to represent more of the market than previous decades, and thus are given a...
Pivotal events of the last two decades compared with the S&P and the money supply. M2 is a broad indicator that includes cash, checkings, and liquid assets such as money market securities and cash equivalents. Although M2 exploded 42% during the COVID pandemic, much of this money is locked up in FED REPO agreements and artificially inflated on the Fed balance...
For HK, this is the most important Chart we follow and obey.
The larger TF here - Daily - perfectly illustrates how Price moves
along a trend range... Until it snaps and collapses quickly.
This is precisely what we believe will occur in the next few weeks
or perhaps sooner.
We will see a sharp reversal with 2 distinct thrusts down as primaries.
Time is running...
M2SL growth was approximately linear before the COVID dump last year. Money printing has increased since and thus it makes sense to divide the market by this increase in money production to view approximately how the market would be performing pre-COVID.
We can see that by doing so, the S&P 500 is about to retest the ATH from before the COVID dump. A rejection...
Looks like the bond market knows something stocks don't (again). Same divergence here that we saw running up to the March 2020 crash. We're looking at SPY/M2 compared to the US10Y yield (in white). The last time the 10Y yield was in free fall, stocks continued to climb, ignoring the signal, only to crash a couple months after the divernegce began. Let's see what...
While I wouldn't short the S&P500, I nonetheless would be cautious if I invested in this index, as it has rarely been that expensive, once adjusted for monetary growth. The time might have come to focus on undervalued sectors (such as commodity producers) or countries (like Russia or Singapore), rather than investing passively.
Shorter-term investors might also...
Next week is critical to see if we break out of this long term channel. The last several times we have reached this resistance, the reaction has been muted, but the momentum structure in particular is nost most similar to February of 2020 which warrants paying closer attention.
In additional to Wells Fargo - more than one dozen additional Banks have
reduced Lines of Credit (LOCs) - the prior contraction in Personal Credit
occurred two weeks before the previous Retracement South.
We anticipate the Net Effect will be Negative with an abrupt reduction in
M2 into the end of August.
I created this combo chart to get more overall view on how BTC is ready to continue bull run to the market top.
1) 2013 fractal had 50% dip (Nov 2013) just before the last leg up. Fractal matches this dip.
2) Bitcoin Dominance completing triangle. So now it should drop for the final BTC capitulation to altcoins.
BTC will rise in price as well.