The Fed Net Liquidity indicator is a concept discovered by Max Anderson to calculate the fair value of SPX (S&P 500 Index).
The formula he shared on Twitter uses the Fed Balance Sheet, TGA (Treasury General Account), and Reverse Repo. Net Liquidity = Fed Balance Sheet - (TGA + Reverse Repo)
The data for each component above is accessible on the FRED website.
This script uses net liquidity (NL) fair value calculation for SPX, then estimates entry and next target exit target for both long and short trades on SPY. The script added RSI oversold/overbought signal to the original NL signal from Max... improving the "precision" of the buy/sell signals.
The script also uses RSI to estimate targets based on how overbought or oversold the index/SPY is.
If the label shows "409->350" with a sell indicator and the current price is above 409, does that mean that one should wait to short until price drops below 409?
Hello. I tried to use your indicator but I get "study error, unsupported resolution" message. Any idea why I get that? Is it monitor resolution? I have 3840x2160 resolution on my windows.
nik0580
⋅
@I_own_nothing, try changing time frame to Daily. Indicator uses daily timeseries data.
I_own_nothing
⋅
@nik0580, Thank you. Didn't realize to try daily chart.
1) Can you further provide an explanation for the labeling? 2) How is this chart to be interpreted and used for execution both from long and short trades' perspectives?