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Is the Market is a Ponzi? The Printing of Money and Growth8-minute video where I gloss over the big picture stuff relating to the Markets and as they relate to the M2 (WM2NS) Money Stock. This is a High Time Frame analysis of the Market charts like the Dow and SP500 vs the Printing of Money and the increase in Money Supply. Basically, the entire market exists as a function of printing money, organic growth hasn't been around for decades and our current highs are almost entirely because of the increase in Money Supply. The scariest one is the Covid dump and how even though the global economies were in many ways shut down, the market experienced a massive Bull Market. The fact is, that in relation to the Money Supply the Dow, SP500, Bitcoin, everything is pumped by printing money
SP:SPX
by TrendmasterOfficial
1
BTC + SPX Trade IdeaThis is a medium term swing/position trade that has a pretty good chance to play out. Check out this fib idea below which underscores the idea. Obviously, don't panic buy unless you like riskier trades. Ease into your entry! June thru October looks like a decent entry if nothing too crazy happens, but a surprise via some global disaster could RUIN this trade. Sellers are willing to accept lower prices for this past year, that's basically what the log returns is telling us as it's below 0. In other words, risk has not paid off in a while on this scale. Risk-averse HAS paid off. This is a contrarian trade. The crowd is now ultra bearish and this presents an opportunity of price discovery. Wait for them to come to you, don't panic and go to them. The wholesale price range is defined by the region of prices where most trades were made AND the result of those trades is highly random. The bottom and tops of this wholesale zone represent the golden ratio 0.618. Remember, the absolute value of the inverse of 0.618 is 0.382. Both of these fib levels are identical, one level represents sells and the other represents buys. In other words, we don't define where 0 or 1 is. We draw the golden ratio area of the fib box around the wholesale range, then we get the definition of 0 and 1. Be aware though, that if you do this same analysis but with Log Returns on a 2 Year timeframe instead of 1 Year, we could still be in a distribution zone. Don't put all your apples in this basket. Be diligent about your position: This gives us quite a startling conclusion. The rally of Dec 2018 was simply a bear market rally on a 2 Year scale. We could be in the very SAME situation now. Lower highs on the indicator, then lower lows. So even though it LOOKS like a decent buy on the 1 Year timeframe, we should NOT assume it's going to the moon if the price reaches our target (red crosshair) unless there is some drastic shift in monetary/fiscal policy which would cause a new cycle to suddenly appear. What do you think about all this craziness? I hope you liked the idea, and good luck. Don't forget to hedge your bets! :)
INDEX:BTCUSDLong
by fringe_chartist
11
M2 vs. M2v (or Money Supply by Money Velocity) This is a pretty bleak chart illustrating how printing more bad money is not the solution to a broken monetary system. The FRED:M2 can be seen gradually increasing at around a 30 or so degree slope until about 2011 onward where it becomes steeper... then at the beginning of the pandemic -- it turns parabolic. During the same period you can see the FRED:M2V which is a measure of how much penetration each dollar is getting (in other words, how many different hands does it touch on its way through the economy. More velocity means each dollar goes farther as it relates to the health of the economy. So what in the world is happening now? Well a massive influx of new dollars added to the money supply aren't moving past wall street. Most of this money is just bouncing between super wealthy and well-connected insiders, being used by corporations to buy back shares, or simply just sitting in a literal or electronic vault, where it never reaches the actual economy. This is a dangerous situation that can get out of hand quickly, culminating (in the worst case) into a widespread loss of faith in the money supply and almost overnight devaluation of the currency. This has happened with ever other paper currency in history, which would be an excellent place to begin research if you are interested in knowing more about what is happening to our currency. My only advice is to be aware that the security you feel with a wallet full of cash is actually a luxury only afforded to global hegemonic powers; one which is always ephemeral even though many may struggle to remember a time when that seemed possible.
FRED:WM2NS
by mattcorwin1
Easy chart to explain Asset pricesJust a combination of a couple old charts, but I wanted to make clear why assets are rising post 2008. There seems to be a direct correlation and causal relationship in FED ownership of assets as a percentage of M2 and asset prices when adjusted for M2. Lots of other charts seem to imply this by charting other things but this one shows the actual thing side by side. Perhaps the identical slope of the trend is coincidental even though the relationship is direct, it is awfully interesting though. Interpret it as you wish. In teal: M2 adjusted SPX adjusted to overlay the symbol below. In yellow: WALCL as a percentage of M2. Good luck and don't forget to hedge your bets :)
SP:SPX
by fringe_chartist
M2 Adjusted S&P and Russell 2000 Fractal IdeaEqually Weighted M2 Adjusted S&P + Russell looks like it will turn negative soon in terms of moving averages. If this week closes at the current price, it will be the first time the 400 MA started to decline slightly since 2020, and if sustained will be the first time since the 2000-2008 era. It took 8 years to turn back positive in 2016. Almost any combination of averages seem to be converging lower. There's also fractal of 2020-2022 that also looks the same as the 15 year chart above, except on the daily time frame. Consider that market conditions currently represent a short lived reflection of what already happened on the longer timeframe: Take it as you wish. To plot the chart yourself: Open the IWM and ES1! symbols on a separate chart and switch to weekly candles. Add the SMA indicator with 520 as the length. I chose hlc3 candles for the SMA . 520 weeks = 10 years. Here's the current values: IWM: 0.983 ES11!: 17.749 Notice that our average for IWM is much lower than ES1! . If we don't adjust it, the IWM price will affect the chart very little, and it would only make up about 5% of our index. To weight them equally, first divide ES1! / IWM: 17.749 / 0.983 = 18.05 Now we can apply our multiplier in the formula below to properly weight the IWM. Paste this into your chart: 1/(FRED:WM2NS/(CME_MINI:ES1!+AMEX:IWM*18.05)) It might look confusing but this is just a fancy way to adjust for M2 and get a value between 0 and 1. ES1! has a weight of 1 (it's equal to the IWM), so we don't multiply it by anything. Feel free to weight it yourself using any other value. I wanted to weight them equally via 10 year SMA, but anything will work. I hope you enjoyed this idea. Cheers and good luck :) And don't forget to hedge your bets!
NASDAQ:AAPL
by fringe_chartist
Worthless Dollar by 2050?Suppose you wanted to ask the question, hypothetical of course: What percentage of the economy does the FED balance sheet comprise of? If you were to replace "the economy" with "M2", then you could get something easily measurable. Simply use the symbol: FRED:WALCL/1000/FRED:WM2NS One is measured in billions, the other millions, so we divide by 1000 (I say just switch to trillions and stick with it, but so much for standards). IF this trend continues at the current pace, the FED balance sheet will make up 100% of the economy by about 2050. The dollar will probably be worthless by then, as the only thing that fuels debt monetization currently seems to be a continuously decreasing proportion of honestly earned, productive dollars, and an increasing proportion of dishonest dollars supporting a bankrupt institution of commercial and federal finance. By using productive money as a means to price in something which should be bankrupt (this is happening now), this bankruptcy will eventually flow and be fully priced into the economy and the proportion of people who believe in the dollar simply stop using the dollar or go bankrupt via the dollar. The balance sheet consists of mostly (see more: www.federalreserve.gov): 5.7T Treasury bills, notes, bonds. Who else could buy that many of them? Nobody I know. 2.7T Mortgage backed securities. They own more mortgages than anyone. Unfortunately the data only goes back to 2012 on TV, not sure why. The FRED WALCL data actually goes back to 2002, so I filled the data in as best as I could using the data from FRED using some red lines. Pretty crude, but probably good enough (should we even trust the data?). I hope you enjoyed this simple idea and many thanks for reading. Don't forget to hedge your bets :)
BITSTAMP:BTCUSDLong
by fringe_chartist
Man Behind The CurtainThe FED's monetary policy is a lot like that scene in the Wizard of Oz where they think they are communicating with a great and supremely powerful wizard, but Dorothy's dog incidentally pulls back the curtain while sniffing his leg. To the disdain of Dorothy, Tin and Straw man, it's just some goofy looking guy pulling levers and talking through a loudspeaker while pressing buttons to release fire and smoke. Dorothy proclaims "You are a very bad man!", and the wizard says "No, I'm just a very bad wizard." Look it up if you haven't seen it. Highly recommended! This is exactly what's happening to the FED. Lots of fire, smoke, ego stroking going on among the board members who think they are all powerful, supreme beings. Oh and don't forget about the insider trading and general theft of what is supposed to be the public's money supply. In GOD we trust? More like, In SMOKE we trust. Eventually, the curtain will be revealed and the irrational belief of the wizard will be no more. If you look at ONLY junk bonds (orange), which is what this idea is about, as opposed to other facets which the FED is able to "bail out" the economy, you can see that the market was beginning to signal in 2008 that investors should avoid risk. Yields were going up, bond prices were declining. An economy with such conditions where people save and preserve wealth is blasphemous behavior in the church of the FED and WILL NOT BE TOLERATED. Bonds were quickly bailed out over the next few years while rates were suppressed and the entire market was coerced into the FED's vision. If you adjust the junk bond index in real terms and simply divide by the money supply (teal line), you can see that with the 2020 bailout, the current purchasing power of bonds has been eroded to the 2008 level, right at the point where people were beginning to save money. Other things have been bailed out as well via the money supply this time around, so we're certainly looking at a skewed metric here. But in junk bond terms, It looks like we would need even more stimulus to stop a deflationary spiral beyond what was seen in 2008-2010 if bond investors are looking at real M2 adjusted terms. The money supply ALWAYS speaks the truth, historically speaking. Now, contrast this with the current outlook of the FED where they are soon going to be selling "assets" off their balance sheet at a maximum of about 90 billion per month. How are WE, the general public, supposed to believe that a deflationary spiral is avoidable if real bond valuations are already at a level where a bailout was "necessary" to these "wizards" in 2008, while at the same time, they haven't even begun offloading these "assets" which they have recently accumulated, which someone is suddenly supposed to want to buy at a record pace not seen before?? Maybe they will finally raise rates and will buy all junk bonds? I mean who else is buying junk bonds, seriously? If something has to be labelled as "high yield", we should probably be skeptical beyond the point of being able to be persuaded UNTIL the market speaks otherwise. But at the same time, they cannot raise rates very far, at least not to the point which is necessary or was necessary in 1980, for example. Just something to think about. In my opinion, there is NO WAY the M2 can ever be contracted, at least not by the amount the FED wants. You pretty much need exponential expansion forever. And at this point, why would anyone believe them? In 2018 they released a projection that their balance sheet would be down to 2T by 2022. Their credibility and foresight is awful. A randomized monte carlo simulation was more accurate than their predictions, so why should we believe in a delirious vision? As far as I'm concerned, until the FED lets their 7T bag of crap rot, we've got a communist monetary policy where the government owns a stake of everything. Just think of how many businesses are backed directly or indirectly by mortgage backed securities and junk bonds, which the FED has purchased using the wealth of the public. I couldn't think of a more pure definition of communism. Those "assets" were paid for with stolen wealth and these actions are a repellent to any free market economy or dynamics. In a free market, bankruptcy is allowed and malinvestment is left to crash and burn and is NOT ABLE to bring the rest of the economy down with it. We don't have that. ----------------------------------------------------------------------------------- How I got the values in the chart: Pay no attention to the actual values in the chart other than M2. The other values are purely to make a side by side comparison that looks decent on a log scale chart. 520W(10 year) MA of M2 = 4845136 520W(10 year) MA of HYG = 87.68 M2 is in millions, HYG is not, but we can ignore this because we are adjusting for relative averages. 4845136 / 87.68 = 55259 Now we simply chart HYG*55259, and now HYG in 10 YR terms is charted relative to the 10 YR MA of the M2. In order to chart HYG/WM2NS, I simply stuck a multiplier at the front, and added zeroes until it looked good on the chart. ----------------------------------------------------------------------------------- Thank you for reading! I really do appreciate your time and I hope my perspective was somehow useful to you. Don't forget to hedge your bets! :)
FRED:WALCL
by fringe_chartist
1
SPX and M2 money supply - Fed induced bubbleWhen they say don't fight the fed, I am pretty sure this chart explains why. The massive growth of the S&P over the last 2 years is perfectly correlated to the Fed's unprecedented financial manipulation. Let's all hope that it does not come crashing down just as fast. It will be a miracle for the Fed to engineering a "soft landing" after such reckless policy for the past two years. They should have raised rates last year this time, then we would have had a chance. Good luck.
TVC:SPX
by Dr_Roboto
1
M2 Adjusted Compensation of Employees Notice how everyone's wages were doing fine for TWO DECADES after Volcker was the FED chair? It's not coincidence. He was the most criticized FED chair in history because his policies WORKED for the working class. Fast forward to today, and we have turned the dollar into infinitely dividing pieces of confetti. These clowns at the FED are nothing more than puppets for the 1%. Real wages down 50% from 2000 and 20% from 2020. Hard to say it but I really don't see how this could ever improve unless we stop using the dollar. Now if only there was a currency where the money supply couldn't be expanded with political willpower... Good luck and hedge your bets
FRED:A576RC1
by fringe_chartist
2
S&P vs OilToday we have a very simple idea. When to invest in S&P 500 vs Oil. The white centerline is the center of the logarithmic price distribution. The red line at the top is +2 standard deviations: unlikely events in favor of Oil will put the price here. The green line is the opposite, -2 standard deviations: unlikely events in favor of the S&P will put the price here. In general, oil has gotten cheaper over the last 125 years compared to the S&P, hence the overall downtrend. I've put some historical events in the chart to portray what might have "caused" the shift, however it's important to note that correlation is not causation, and there are MANY other factors at play here in addition to the events I've listed. There are many events that we must assume we don't know about that have took place. We simply want to observe the results. Besides, the chart doesn't have nearly enough room to post about all events which could have been related :p. Let's look at the percentage increases in the chart that took place when the price breached the green line, in order to set some future expectations: Oil vs S&P price increase based on HLC3 candles (average of high, low, close): 1917 to 1921: 760% 1929 to 1949: 480% 1969 to 1980: 1380% 1999 to 2008: 1070% 2020 to now : 420% If you look at these percentages increases, one might conclude that we might be near the top. However, we breached far below the -2 stdev line, and momentum has reversed sharply. Not only that, upward momentum in this area tends to carry us PAST the centerline (white line) historically speaking. So, expecting this to be the top is quite generous, especially if you consider that the price of oil was below 0 for the first time ever in 2020! In my opinion, it's not crazy to think we could go 3-4x from here, to 0.75 or greater, especially if you consider that OPEC has no plans to increase production, which produces some of the cheapest oil on Earth. This chart only covers events like today, where we are recovering from a -3 stdev event, and does not cover the inverse scenario of where the S&P recovers. I feel like that deserves a whole other chart as I didn't want to make it look too crowded. Thanks for taking a look and don't forget to hedge your bets!
TVC:USOILLong
by fringe_chartist
8
Gas just got expensiveIn the chart is the M2 adjusted price of gasoline matched to the current price. It measures the portion of total dollars it would take to purchase a gallon of gasoline. Essentially it's a chart of dollar strength in gasoline terms. Chart up = strong gas, weak dollar. Chart down = weak gas, strong dollar. The white trendline in the center is the longterm linear regression, the center of the logarithmic price distribution (but only back to 1986). To calculate this symbol yourself: RB1! price = 3.798 RB1! / WM2NS price = 0.0001758 3.798 / 0.0001758 = 21604 Now we simply enter RB1! /WM2NS*21604 to get our current price. What the chart does not show is that over the years, public ownership of the dollar supply has gone down. As you pump unwarranted dollars into the economy, you get diminishing returns on real gdp growth and thus a reduction in productivity. No measurements are being made, dollars are only being thrown into the system. More doing, less thinking and measuring. Therefore, people have less overall dollars, relative to the total supply of dollars, to spend on gasoline as they did in previous decades. For example, around the 1970s, the FED could squeeze out about 70 cents in GDP per 1 dollar printed. (Actually they didn't squeeze anything, they just sat on their ass) Fast forward to 2022, these reckless and dogmatic pseudo-scientists are getting around 30 cents per dollar printed. If people are economically half as productive overall, PERHAPS everyday people will only be able to afford about HALF as much stuff and therefore half as much gasoline as when it was just as expensive in the past. Just something to think about, seeing as how regular citizens didn't get much of that money. Those who work the hardest are not worthy of the easy money printed by our glorious church of the FED. Consider how gasoline peaked around 7$ multiple times, in '85, '90, '05, '06. Now imagine if society was half as productive back then, that's basically saying it's 14$ in today's terms if you account for money productivity AND money supply expansion. Probably not the most settling idea. Good luck and hedge your bets.
NYMEX:RB1!
by fringe_chartist
Gold Spot to $2600 by 2024Gold ( OANDA:XAUUSD ) is forming an immature cup and handle on the monthly with a price target of $2600. On the weekly, we see it has broken above this triangle as you see in the chart below. That move is not confirmed yet either, but if next week, gold trades above this week's close, then we set a price target of $2060 and set a stop loss below the recent low. Charting Gold versus M2 Money Supply, we see gold hitting a historical low of 2007 which has supported the price many times between 2007 and today where it remains a strong support. Let me know what you think. Leave comments and if you like, leave a like. Cheers.
OANDA:XAUUSDLong
by TechNerdOmar
Don't fall for the NarrativeThere's a general narrative going around of "buy the dip" and "look at these undervalued stocks". The goal here is not to compare Facebook to Microsoft to Paypal as companies, but to look at relative price structure between a handful of popular stocks. In this case, we have a few giant companies; Tesla , Facebook and Microsoft , charted against the smaller Paypal and Netflix , and which have taken a recent beating (along with Facebook ). The lines in the chart are an 1800 week linear regression of Microsoft's per-dollar performance relative to the M2 . The lines don't mean anything and are merely a rough guideline of history-projected asset strength. The prices are M2 adjusted to account for money supply expansion. Facebook has been underperforming since 2018 after making a huge run in 2013 onward, but the notion that "it's a good deal" hardly stands up if you look at the relative trajectory of Microsoft and Tesla . Facebook was one of the biggest to rise, and was one of the first to fall. Microsoft on the other hand has a huge history of being an efficient capital allocator, and will probably be one of the last to fall. Let's ask the question: If Microsoft and Tesla make the same correction as did Paypal and Facebook , do you think Paypal and Facebook will be lower or higher following this hypothetical correction? The gut feeling here is that Paypal/ Facebook / Netflix /Peloton etc. COULD end up falling even more, given that many of these larger cap stocks are still standing well. I would rather short Tsla / Msft than long Paypal/ Facebook / Netflix /Peloton etc. given the current environment. It's easy to want to fomo into these stocks when you look at a year or two of history, but I think this paints a more realistic picture. Good luck and hedge your bets :) Note: The arrows are not price targets, just medium term directional indicators.
NASDAQ:MSFTShort
by fringe_chartist