SPX | Supercycle
Updated
Not all is black and white.
Innumerable financial fundamentals point towards economic weakness.
The thing is, nobody has managed to pinpoint when this will happen.
The only thing I can do today is get some perspective on the cycles of SPX, and perhaps pinpoint the beginning/end of some of them. Maybe we are in the beginning of a new super-cycle!
First things first, in this chart I am using a custom KST indicator I have developed. RSI and Stochastic RSI is too fast for my liking. Below that, there is a MACD indicator which is paired onto the KST indicator.
In short, RSI calculates strength (no s**t Sherlock!). KST takes this calculation further, it is something like the "cumulative energy that RSI collected". MACD is used to measure KST divergence.
I will be linking below my new custom indicators.
Beginning the long-term chart, we see the following:
In this chart, MACD shows bullish outlook for the near future. Just like in 1986.
(Curiously, 1984 was just 2 years ago. How completely unexpected!)
This chart suggests that relative economic weakness has already passed. It could take decades before it returns.
We must take the 12M chart with a grain of salt, because it is ridiculously slow and irresponsive. The 6M chart might give us a clearer view.
Historically, economic weakness in SPX has lead to relative upwards movement, albeit at a slower pace.
Not all 3 warnings have come. This means that growth may continue for the following few years. It could take a decade for the Third Warning to show up.
It appears that the 6M chart validates the 12M chart, predicting prolonged growth. However, there are significant indications pointing to commodities overperforming equities.
Therefore prolonged (slower) growth for equities might not be the perfect investment advice. I am not an investor, so what could I possibly know!
The 4M chart teaches us an important historical lesson. The 2000 peak had significant divergence embedded into it.
This was not apparent if we analyzed RSI by itself.
On the 2M chart we see the following:
And near term, on the 2W chart:
Short-term analysis could shape into the following:
Who knows if a black swan will soon come again?
As you might have realized, things are hard for this year. But long-term movement is more complex than many believe.
Trading long-term demands discipline.
Tread lightly, for this is hallowed ground.
-Father Grigori
Innumerable financial fundamentals point towards economic weakness.
The thing is, nobody has managed to pinpoint when this will happen.
The only thing I can do today is get some perspective on the cycles of SPX, and perhaps pinpoint the beginning/end of some of them. Maybe we are in the beginning of a new super-cycle!
First things first, in this chart I am using a custom KST indicator I have developed. RSI and Stochastic RSI is too fast for my liking. Below that, there is a MACD indicator which is paired onto the KST indicator.
In short, RSI calculates strength (no s**t Sherlock!). KST takes this calculation further, it is something like the "cumulative energy that RSI collected". MACD is used to measure KST divergence.
I will be linking below my new custom indicators.
Beginning the long-term chart, we see the following:
In this chart, MACD shows bullish outlook for the near future. Just like in 1986.
(Curiously, 1984 was just 2 years ago. How completely unexpected!)
This chart suggests that relative economic weakness has already passed. It could take decades before it returns.
We must take the 12M chart with a grain of salt, because it is ridiculously slow and irresponsive. The 6M chart might give us a clearer view.
Historically, economic weakness in SPX has lead to relative upwards movement, albeit at a slower pace.
Not all 3 warnings have come. This means that growth may continue for the following few years. It could take a decade for the Third Warning to show up.
It appears that the 6M chart validates the 12M chart, predicting prolonged growth. However, there are significant indications pointing to commodities overperforming equities.
Therefore prolonged (slower) growth for equities might not be the perfect investment advice. I am not an investor, so what could I possibly know!
The 4M chart teaches us an important historical lesson. The 2000 peak had significant divergence embedded into it.
This was not apparent if we analyzed RSI by itself.
On the 2M chart we see the following:
And near term, on the 2W chart:
Short-term analysis could shape into the following:
Who knows if a black swan will soon come again?
As you might have realized, things are hard for this year. But long-term movement is more complex than many believe.
Trading long-term demands discipline.
Tread lightly, for this is hallowed ground.
-Father Grigori
Note
SPX * Yields calculates the absolute strength of the economy.SPX / Yields calculates who will be responsible for the strength of the economy.
Yield Rates win.
It is funny when two very similar looking charts, have completely opposite indicators.
Note
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