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M2SL

Warning DrumsJust a short update for today. It is important, so it deserves an idea on its own. For the first time since 2019, the FED is now officially giving money into the system. What could this mean for the US economy? Are they sensing weakness or is this just a response to the recent banking crises? Now let's look at the history of bailouts. Price made a higher-high, and stayed high for months until the GFC. Similarly in 2019, without anyone concerned about recession, the FED pivoted and cut rates. This might be the beginning of more bailouts. Who knows how many more... There is a big difference however... Historically, during periods of economic weakness, the money input was higher than the output. Now, the scale of money going out of the system is astronomical. So much so, that is literally bull-flagging. Money supply metrics cannot be ignored. Record low RSI for money supply. Beware, these scale of these events is incalculable. The numbers we witness here are massive (RRPONTTLD). The money supply monster we have created is more powerful than it's creator. What must be done to fight it? And who will be the first to fall? Do note that RRPONTTLD is a sum of agreements. The effect of such a dramatic money drain out of the system will take years to show itself. This M2SL drop is just the tip of the money-berg. Tread lightly, for this is hallowed ground. -Father Grigori
FRED:WORAL
by akikostas
SPX | A Trader's MindThe anxious moment when your investment goes through a period of slowdown or drop. When everything is good, everyone is happy. Nobody thinks twice when a market is growing. It's at that point of the first lower-low, when an investor loses their sleep. And it can be suffering when insomnia is prolonged. The 2022 Recession will be remembered as the most confusing and pressured of all. One whole year later, and still we don't sleep all that well. We hoped that things would clear out by now. Instead, the situation is more confusing and chaotic than ever! Being in a period of all-time-high records, I feel proud. Yet, the responsibility in my work is most important than ever. And there are many records occurring right now... For the first time, Money Supply has taken such a dramatic downturn, with an incredibly steep yield-curve inversion. With 470B burned until now (M2SL chart) and with such a prolonged inversion, it seems that a new era begins right before our eyes. A period when money is scarcer and scarcer. We were crying all these years that money loses it's value. Now that money is getting much more powerful, we are still crying. This kind of mentality doesn't help us. It can certainly get us pretty far, but in the wrong direction. We should dedicate our thoughts and efforts into deciphering this incredible new era. I am not optimistic for this new era for many reasons, an explanation of these reasons is not fitting in a trading platform. We are facing serious humanitarian problems that we choose to avoid, or problems that we create (un)willingly. To figure out what happens, we should begin thinking spherically. Isolating equities doesn't get us far. It is the balance of powers that is changing in an instant. -- Tricky Bear Market Trendlines Bear market analysis is not as simple as many expect. The bottom is not that easy to pinpoint. There are many bottoms that precede the terminal bottom. In each one, everyone trades as if the bottom is in. Most of these times, the bottom is not in... I've seen innumerable charts this past year, claiming that the bottom is in and that we should trade it. Yet, none of them ended up true Breakout, divergence, MA crossover, over and over and over again... The same mentality occurred in previous recessions... After these instances, more downside followed. Are we sure we are out of the woods? -- Hollow Equities The Stock Market is not what it used to be. The major indices are not priced just by stocks, but from derivatives also. The following chart attempts at calculating the percentage quantity of derivatives. The higher it gets, the more "hollow" prices get. More info in the following idea: How much should we trust index prices given that they are filled with weapons of mass destruction? -- Cash instead of Stocks From 1920 to 2020, Equities were the go-to investment. Currency was just the mechanism to buy into equities. Now a paradigm change is beginning. Progressively higher yields and steady equities shape an entirely new understanding of what investment is. From investment in equities, to investing in money itself. A horizontal movement is expected for DJI against yields. Equities can increase as much as yields allow them to. Not the other way around. Until now, equities dictated yields. If equities stagnated, yields had to drop to stimulate the economy. Now, equities may increase only when yields allow them to. The FED is showing that rates will not lower even if this ends up in severe financial crises. Money has to remain strong for those who have it. In periods of war, financial advantage is more important than growth. Surviving against the enemy is a priority. Talking about a paradigm shift! -- Commodity Inflation Commodity inflation is brewing. Now it is beyond brewing, it is getting explosive... Inflation is getting so severe, that it is bull-flagging against money supply itself! At least according to my charts... And if Bitcoin can be considered a commodity, it is showing the same dynamics as material commodities do. And in an even higher degree! To NDQ Bulls, the big-tech bubble appears to have already ended! Perhaps we have not seen just yet the dynamics Bitcoin can get. It is proving an investment that is progressively accumulating incredible amounts of idle wealth. High amounts of money are "parked" in Bitcoin, sitting idle. This chart is very simplistic. One more experienced with Bitcoin analysis can make a more thorough analysis. If one of you does, please inform me because it is very interesting for me! There is much more occuring. Housing is one important market, on which I am not experienced to analyze. As a conclusion, I advise every TradingView user to concentrate their efforts into deciphering the future. In this new era of progressively stronger currency, equities and investments will not perform like they did the past 40 years of QE. There is much work to do for us to financially survive in this environment. PS. To get something out of the way, I don't give trading advice. My charts are drawn with arrows so as to explain more easily my thought process. I post these ideas to provoke conversation and logical analysis. I can always be wrong in my thought process. If you disagree with a chart, please disprove it with a chart. Not with texts of semi-logical reasoning and by calling me crazy or conspiracy theorist. Of course any comments and corrections are welcome! It is when you want to disprove something that requires you to send counter-evidence. Tread lightly, for this is hallowed ground. -Father Grigori
SP:SPX
by akikostas
5
SPX | Did you win?Ah the beauty of Fibonacci... when after a painful recession for equities, we reach the golden ratio alive and well. The satisfaction!!! Now we can go all-in equities! Perhaps you are one of the lucky ones who bought the October bottom, then congrats to you! How much was your profit really? After all, this was a peculiar year... Yields massively increasing, equities dropping. It is like a dead end, it feels like a maze... The main chart does show a significant recession... But we have passed it! Some charts suggest that we had no recession this year... Other charts suggest the complete opposite! Note that these are my charts. I was the contradictory being... Look at what the last chart means: LQD is the investment-grade ETF. On the second chart it is compared with SPX/(modified-yields) and on the third with SPX/(modified-yields*PPIACO). The correlation is as good as it can get... This is a mess... what can we infer from all of these charts? Something fundamental can help us clear the picture. We can differentiate between 4 distinct periods of the economic cycle. A. Equities increase while yields decrease (bonds increase) This is the QE model, which followed us for many years. During this period, the only winner is the one who had only stocks in the beginning. Investing everything in the stock market is your best bet. B. Equities increase while yields increase This is the scenario when the economy is at it's best. During this period, everyone wins. Both the one who has stocks and the one who is selling/lending cash (sitting on cash) win. Any kind of investment is good in this period! C. Equities decrease while yields decrease This is the nightmare of the wealthy ones, and this period that rarely comes. It happened during the 1929, the 2000 and the 2008 recessions. During this period, you win if you have nothing invested, and without any money. Borrowing money to buy stocks is the best plan. D. Equities decrease while yields increase Sound familiar? This is 2022 in a nutshell. During this period, I hate to disappoint you, the only one who wins is the one who has a lot of money. Sitting on cash and lending it is your only option. The immense amount of money that the US printed, is now sitting in the hands of few. If you traded for profit, then you are probably at (or near) net-zero. In 2022, you won if you sat in cash. We have gone full circle, from advising into sitting in cash, to advising into selling, to buying, and back to the beginning. Finance is complex... To conclude, my head is spinning... I have no idea what all of this will lead to. It is as if we are in a lose-lose scenario. Invest in bonds? But is the US going to be able to pay them out, after decades of free money? And with so much money in circulation, how many bonds are being purchased at these "extortionate" rates? How in the world will the US be able to pay out so much? Invest in equities? They look like they will face years of stagnation. The only thing that smells lately is the smell of war, the smell of "I have nothing to lose". The only thing to gain now is resources. Commodities are bull flagging against everything. More specifically, the combination between the cost of commodities and the cost of their production added together. This makes me believe that a small increase in production cost will lead to multiplicative increase in the final product value. This is a recipe for hyperinflation. And the big profit is if you own the land the resources are produced. (Ukraine for wheat, Taiwan for silicone, etc...). Everyone is willing to fight for these lands... I am adding this chart for the picture on the left. The CEO of Bank Of America is preparing for US bankruptcy. Tread lightly, for this is hallowed ground. -Father Grigori
SP:SPX
by akikostas
4
Uncontrollable Inflation?Will inflation get under control? This is a question that spins on my mind. This chart clears the picture. On the top of the equation we have "long-term inflation", calculated by GOLD*PPIACO On the bottom we have the true equity value, calculated by modified-yields*SPX modified-yields = US10Y+1+1/US10Y. It follows the standard US10Y chart. This chart tells us something alarming, that no matter the politics, we are inside a massive bull-flag. This chart below, measures the long-term inflation compared to total-money-earned-from-bonds. Another golden bull-flag appears, which found support on the 1980 peak. Commodities could over-perform any attempt we have at stopping the inflationary pressures. Any upwards move on yields, will have multiplicative increase in commodity cost. Take a look at SPY_Master's ideas regarding bull-flags. He is the inspiration of the GOLD*PPIACO chart. He basically used GOLD*DBC as a good measure of inflation. I replaced DBC with PPIACO for longer-term analysis. Now I will explain how and why these charts work. On the top we have GOLD*PPIACO. Gold is measured in dollars, while PPIACO not exactly... So on the numerator there is only one occurence of dollar value. M2SL moves exponentially compared to PPIACO. So PPIACO by itself doesn't get inflated by money printing. On the denominator, on the one chart we have (mod-yields)*SPX, which is again measured in dollars, but SPX is transformed for the "true" value of dollar. I thank SPY_Master once again for the inspiration. He invented the SPX/(1/US10Y) = SPX*US10Y chart. On the other chart we basically have the total money made from bonds. Total money printed is transformed for their cost. In reality this denominator measures the true value of all money printed. So it is once again normalized. Finally, look at this chart which compares equities with long-term inflation. Any upwards move on equities, will have multiplicative increase in commodity cost. Tread lightly, for this is hallowed ground. -Father Grigori PS. I am not a trader, these charts are not "tradeable". In fact, they could give someone second thoughts on investing. I don't have second thoughts on investing. These charts help us understand that sometimes, things are not as straightforward as we would hope. PS2. To anyone who hasn't played Half-Life 2, Father Grigori is the guardian of a city called Ravenholm. We don't go there anymore. PS3. My name implies that I am a priest of sorts, I unofficially could be one. Officially, I am not a priest. I am in love with how nature (and God) shows up in the most amazing of places. These golden flags are not random... Nothing is random. For example, look at this incredibly accurate chart. PS4. Please don't fill this comment section with arguments about faith and God, if you believe in one (or many) or if you don't believe in one (or many). These kinds of conversations tend to go up in flames. Please keep the peace.
TVC:GOLD
by akikostas
13
SPX | What goes up......must come down. Conservation of Energy We all know QE... The god-given gift which made everyone rich! Well, not everyone... Consumers sure took a hit. But who cares about them? We want corporations rich! And they got rich . And boy some of them did go rich... That's the beauty of the American Dream! Sure we were cheating... ...but look at all this money we made! Violets are green, dollars are green, stocks are green, everything is green! And stocks are everything! (This chart shows the stock market "dominance". How much of the wealth one can have is inside the stock market.) And now everything is inside crypto. We are all-in. In a Poker Game where The House always wins. After all that fun party, it is time for the bill, not clinton bill, not treasury bill, not dollar bill. It is time for debt to get paid. As always, nature will do it's trick... Nature seeks equilibrium. Entropy. When we cheat and inflate, it comes and deflates. Nature is a closed circuit. When some deflate, others inflate. And the cycle goes on... Tread lightly, for this is hallowed ground. -Father Grigori
SP:SPX
by akikostas
3
The Good, the Bad and the Ugly YieldsI have this question... Why are high yields bad? What is bad? We are in a period of big changes. There are lot's of balances changing, one of them is money. We have just passed (?) the biggest monetary experiment ever (QE) and we are about to enter the successor to that experiment, digital money. Digital money conveniently came about just at the time when hyperinflation became an expected reality. If you talked about hyperinflation 4 years ago, you were crazy, now it is expected (and perhaps actually coming). ... Instinct tells us that the unknown is a threat, rather than an opportunity. Instinct slyly and covertly compels us away from change and progress. ... -Dr. Breen In the center of the stages is the paradigm shift in yields. After decades of consistently lower yields, now we are expecting consistently higher ones. Many (including me) have prejudged themselves into be lie ving that high yields are inherently bad. I cannot conclude into what high yields are bad at. The title suggests that they have 3 faces, good bad and ugly. I can conclude that now, like always throughout history, we are rolling in a cycle. Some things have changed in unpredictable ways. This unorthodox chart shows us that this year, we have lived through something unique. Perhaps this will be the way things move forward. From the charts above I have tried hard to conclude into something. The only thing I have learned is the following: Bonds are the new equities. In QE world, lower yields made more money. How? Money printing and borrowing needs low yields for it to be popular. Immense liquidity bubbled everything and productivity skyrocketed. QE is the fuel of globalism. Equities paid out dividends, so higher equities led to even more money. In QT world, higher yields make more money. How? Money burning and lending needs high yields for it to be profitable. Money makes more money, and every day it makes even more money. Commodity producers (GOLD*PPIACO as an example) and wealthy individuals/corporations/nations can enjoy this new era. QT is the fuel of war. Everything is precious and everyone fights for it. In a globalized world, you could make money by being an intermediate entity. Now to make money you must actually own the resources and money. Rich get richer, and poor get poorer. This is the purchasing power of the consumer dollar. Poor get poorer... Poor get poorer when rich get richer. These charts above are simple to understand and analyze. Down below I will add some of my favorite charts. These charts calculate the value of commodities compared to equities or money supply. Commodity production bull-flags against equities. Commodity production bull-flags against money supply itself. The bull flag is against yields as well. True Production Cost (PPIACO*yields) is bull-flagging (?) PPIACO is used as a historical alternative to USOIL. For some reason, we cannot perform old historical calculations using oil. They show that the commodities prove a big motive for everyone. Especially to those who seek war. Would anyone in their clear mind expect WWIII to be talked about in the 2020s? With the knowledge we have collected throughout all these years, this would be out of the question! Yet, here we are, casually talking about it. Again, changes are happening but we are stuck in a cycle. All we can do about it is to understand where we are, and not constantly deceive ourselves and others into thinking otherwise. So there is a clear benefit into just realizing where we are, it is not financial profit, it is speaking truth. Conclusion? This is a zero-sum game for consumers. Also, with bonds we are committing hubris. Bonds is a mechanism that helps money itself make more money. Have you heard about the Ancient Greeks? They talked about the fact that when money makes money, it is Hubris (something like sin, only worse). Equities gave more output than there was input, if someone includes long-term dividends. You working and making money is not Hubris (according to Ancient Greeks). Making a system which enables money to make money, then you commit Hubris. Consistently higher yields will help money make even more money. Equities are facing Nemesis (compared to bonds). Bonds have just now committed Hubris. There may be many years until they face Nemesis as well. Tread lightly, for this is hallowed ground. -Father Grigori PS. This movie "good bad ugly" was released in 1966, a period financially similar to the one we live now.
TVC:US10Y
by akikostas
2
This chart measures pain.Spoiler alert, there is a lot. Inspired by a fellow trader, link to his idea. He is the reason I took the stock market seriously. An easy-to-explain chart. As NoOneWhoIsSomeone explained better, FEDFUNDS increases when an economy is strong. Therefore it can be a modificator for prices. The FED increases the rate when it smells money, and money smells when there is strength, historically... Now the FEDFUNDS race now is for inflation (amongst other conspiracy stuff) Does this chart work??? I don't know... Orange line: It is SPX in log scale. Blue line: I tried to add in the equation the FEDFUNDS rate. The price of SPX is divided by M2SL. This takes out of the equation the money printing. Now we multiply by 10-FEDFUNDS rate. I could do many different calculations but this is good enough for my knowledge. I am no trader, I have even managed to forget physics I did one year ago, so you could't possibly call me a genius. So take this with a grain of salt. What we find out is a new blue line which could be a measure of today's strength of economy. Throughout history, the two lines followed together, with the blue line surpassing the orange. Therefore the "strength" is higher than the SPX reading. In 2008 the lines followed through in exactly the same fashion. Even in 2000, albeit the blue line being slow, they both reached the same bottom. What we see now is the incredible. The economy's strength is already in trash. And for quite some time... It appears that my extreme ideas are not that extreme after all... Go ahead, post some hate comments below, like some did in the idea I linked. Tread lightly, for this is hallowed ground. -Father Grigori
SP:SPX
by akikostas
2
Money Supply Bull Flag ???Maybe this is a massive money supply flag. We have support on the ribbon. Stochastic RSI confirms it. I don't know if this even makes sense, since CURRCIR is a subset of M2SL. On the other hand, who would have thought that in 1990s currency in circulation would increase by 50% in less than a decade. Or is there a ceiling prohibiting more increase? Also look at the ratio between Europe's money supply and US. And my favorite, the most accurate retracement ever. Total "purchasing power" of Europe vs US. Just recently we have reached a perfect golden ratio. 1 in 10.000 accuracy. Maybe this is a harmonic pattern. Feel free to guide me as to what this might be. And how price might continue in the following months/years. A closeup view. Maybe Europe will print so much money that it diminishes its currency. This chart suggests that EURUSD is in reality much weaker than it seems. A lot of Euro is printed compared to Dollars. Maybe they get more hawkish than the US and increase rates to >5%. I am not sure... Prepare for unforeseen consequences I guess? - G-Man, Half-Life 2
FRED:CURRCIR
by akikostas
M2SL | Duplex Megaprinter 8000 ™Back in the 80s, we thought that by 2020 we would have an automated oven and flying cars. All we got is a money printer, and we liked it. We played with it a lot. And this year for Christmas, who wouldn't like some more printer ammo? Since high inflation cannot ensure social stability, we have only one option. Lower inflation. That is the motto of the FED, the hope of every investor, a lower inflation figure. The consumer is overwhelmed from the increasing cost to survive . The inflation war is nowhere near it's end. We have gone from commodity inflation to services inflation, to the everything inflation. We haven't managed to stop it. What if there was another way? Actually there is another way. If you break the oath of "never read the news" and actually read the news, you will realize that the average consumer is getting the help they need from grants. Governments throughout the world have found the way for social stability. They simply buy us off. Record high electricity bill? No problem, here is a grant, the government is paying a percentage of the bill as a help. Expensive fuel? Here are 100€ in fuel discount to go to work. It is like the best Christmas ever. Businesses get to enjoy 100% of the earnings they want, consumers consume, and governments have social and financial stability. They just have to keep the game going, keep the printer full of ink. Everyone is happy. One could say that this perfect scenario we are in cannot fail. And even if it breaks, we keep the printer rolling. Sometime in the not-so-distant-future of course, something could break. We have just moved the problem from the consumer to the investor/corporation/government. We have gained some time. It is just incredibly difficult for me to understand what could break if this game goes on and who will take the dive. At what point will this printer stop helping us? Right now it helps many. Also go out and talk with people, almost nobody talks about inflation as a problem that could completely destabilize the global economy. They just care about the immediate issue, that everything is expensive. We are humans, and not a very wise kind. We are an infant species (like Dr. Breen said). Even now that we realize what we have created, and try to solve it, we do it in a fashion that will ultimately turn against us. We buy out everyone and everything, we have made humans more dependent. With all that technology around us, I realize that we are incredibly fragile. We haven't managed to be empowered from technology, we are swallowed in it. And we hate the word Plan B, imagine how trapped we are in when we don't cover our bases. We buy out our problems because we search for the easy way out. That's the reason we made the printer in the first place. We needed to solve one issue, ignoring the future repercussions. After all that epilogue, I will now add the prologue. This idea is upside down, like everything around us these days. On the main chart, we see that we have found support on the weekly ribbon. The 1M (and 2M) chart suggests that we are heavily supported from below. Do note that dropping oscillator on money supply does not mean significant price drop. Since money supply increases exponentially, a bearish oscillator suggests that we are on the upper side of the trend. This chart shows us the Reverse Repurchase Aggreements. We have RSI divergence, and stochastics dont help the situation. RRPONTTLD dropping is signaling QE. As SPY_Master stated in this idea, this chart shows us the effort the FED does to fight inflation. Yields show a similar picture. We are under significant resistance from the 200EMA in the 2M chart. Stochastics print a bearish signal. CURRCIR/M2SL may be printing a bull flag. What will be the effect if currency-in-circulation increases compared to money supply? How will prices and inflation react? We have already had significant increase in the past year in the ratio. US money supply is showing signs of increasing, or at least stagnating. This chart comparing US and EU is alarming... Tread lightly, for this is hallowed ground. -Father Grigori
FRED:WM2NS
by akikostas
1
MV = PQIn this rough draft of an idea, I naively try to figure out the effect of the immense money printing, and the "true" value of inflation. After BIS came out talking about the hidden debt, I began thinking about the "hidden" money. With such low money velocity, we cannot possibly feel the real effect of all that flood of money. I am amazed from this chart. Mainly because I just realized that there is a ticker that measures money velocity besides the FRED:M2V. It has the impractical name of A14187USA163NNBR. And it provides us with very long historical data to analyze. For us to have a remote hope of analyzing such extensive numbers, we simplify certain things. The title is the famous Milton Friedman equation (Quantity Theory of Money). Since I haven't studied finance, I just found out this equation. It was not famous for me. Yet, here I am, an unprofessional talking about finance. The letters in the title's equation mean the following: M stands for money. V stands for the velocity of money (or the rate at which people spend money). P stands for the general price level. Q stands for the quantity of goods and services produced. Info taken from Federal Reserve Bank of St. Lous www.stlouisfed.org On the chart, there are two charts of the "fixed" SPX*Velocity. Because there are two separate tickers for velocity. FRED has data on the US GDP only after 1947. So one of the differences between these charts could relate to it. GDP in a period when QE didn't exist, was a meaningless statistic. Increase in productivity can't take you parabolically high like we see now. The reason we use SPX*Velocity is the following: If you do some calculations on the MV=PQ equation and multiply by SPX we have: SPX*Velocity (Chart) = SPX/M * GDP In reality, this chart shows us the effect of the SPX bubble on GDP. Before 1947 there was horizontal movement. If you think about it, until 1947 the fact that SPX*Velocity didn't grow, means that SPX is a good representation of GDP. On the left handside of the equation is the chart, on the right is total product produced. So now, the parabolic GDP is 100% due to the parabolic movement of SPX thanks to infinity-free-money-printing. The money velocity tells us more. Because money was not fiat, people used to hoard it and not spend it. So we see a substantial drop from 4.8 to 2 in velocity, before the Great Depression. The same is now, but faster... for the last 20 years, money velocity has taken a skyfall. The slow drop in money velocity occured because money was precious and people kept it. Now it is not moving because there is a MASSIVE amount of it in circulation, but most importantly, because it is hidden, like the hidden debt BIS is looking for. I know this idea is confusing. There is so much stuff that is hard to explain and visualize. Let's think of a scenario. If/when the Dollar Milkshake commences, and someone goes bankrupt, the debt is deleted. Since the debt is deleted, let's say that the money is deleted as well. We realize that if the money supply goes incredibly low, it would be as if we "go back in time". The Dollar Milkshake, that will push it's value to incredible highs, is nothing more than turning back the clock in time. All these years everything lost their value, as well as dollar. The only debt that will remain and not go bankrupt, is gold. It is not debt, but it serves as one because it is technically currency. This is an inverse-pyramid SPY_Master uploaded. The fake money we have created costs a ridiculous amount compared to gold reserves. GDP has increased 100 times in the last 80 years. And SPX more than 3 times to GDP. This gives us an idea of just how much over-leveraged and overblown the stock market is. Human values haven't increased 100 times. Hunger poverty and suffering hasn't gone down 100 times. And we are certainly not much wiser than ancient civilizations like the Greeks (perhaps much less wise). This is a truly fixed SPX chart. And by fixed, I mean qualitatively. It looks like we are in a state like before the Great Depression. Very very bubbled. Who knows if more money printing will take place and take us off the chart. To conclude, we can calculate inflation if we calculate the missing money velocity. SInce money doesn't circulate, there is low inflation. It is the product of money supply and velocity that matters. If velocity returns to normal levels (it certainly tries to), we look for an increase of 60% in velocity, which would push inflation much higher than now. Imagine the panic we will feel if inflation goes to 15% next year, let alone 60%. I began writing this idea to calculate the inflation, but my mind went places... It's been fun writing. Tread lightly, for this is hallowed ground. -Father Grigori
SP:SPX
by akikostas
20
EU vs USDon't you have the question on why did Euro bounce off $0.95358, and not in some other weird ratio??? This chart explains it. A larger look on the chart. One could compare the ratio between EUM2 and M2SL to get an idea of the money supply ratio between the two "unions". Since I THINK that EUM2 is measured in supply of Euros, we should normalize the data. Therefore we multiply by EURUSD. So we get an accurate comparison of the money supply between them. With this transformation, certain trends are much clearer and VERY accurate. EURUSD by itself doesn't show a clear explanation on why the sudden drop of Euro occured back in 2014. Whereas this chart shows it clear as day. Price was dead for several months before violating the trendline. As for the brief loss of the 1:1 ratio that occured several weeks ago... One could draw convincing retracements from the standard EURUSD chart that pinpoint the local bottom. This chart though pinpoints it to an EXTREME level. From the 1985 bottom to the 2008 top, the .618 retracement (in log scale) was respected with an incredible accuracy. Accuracy that high that is virtually immeasurable. This was drawn with magnet tool of course. This is the candle of Sep. 18 2022 Price stood a hair above the retracement. It as good as you are going to get in such long timeframes. This is not surprising. The fundamentals of the pair depend on the supply of money between the two "unions". So where does this leave us? Right here... With the incredible amount of money printed by the US, the price of Euro simply hasn't caught up. One could state that since the US has printed all that money, that eventually the price of USD will go down, therefore the real drop is 24% and not 33% that this chart describes. Considering though the pressures of the money flow worldwide, and with the Dollar Milkshake as a guide, the effect will be the opposite. Europe needs Dollars more than US needs Euro, the pressure is towards USD. So I would guess that there will be at least a 10% drop for the Euro. The next station will be around $0.85. And this ratio is not good for Europe. In mere months Europe lost more than 20% of it's purchasing power, and being a continent that relies on imports (we don't have substantial oil production), the situation looks grave indeed... This chart shows the "purchasing strength" or "purchasing ammo" between EU and US. And the speed the chart moves downwards is very alarming. While the standard ratio of EURUSD looks hopeful, this does not. We have A LOT of road to cover for the pair to turn bullish. The ribbon is inverted and very wide, this is an incredible challenge for Euro considering the world pressures. Tread lightly for this is hallowed ground. -Father Grigori
by akikostas
How VIX follows SPXVIX is a measure of volatility. It takes the last 30 days of SPX, and measures it's variance. I would guess that VVIX does the exact same thing to VIX, it takes the recent 30 days of VIX, and measures it's variance. These two, along with SKEW are some of the methods investors calculate risk. I don't have the technical/financial knowledge on the ways investors can use risk management for better financial decisions. If we do some "magic" we can transform these notoriously unchartable indices. I am aware that since VIX takes the value of SPX, gets affected by both the volatility and the price of SPX. So technically from it's nature VIX tracks SPX. If, for example, we plot the chart (1-VIX) we will see the following: As we already know, he inverse of VIX follows SPX. Low volatility equals high SPX. The calculation logic of the chart is: Scale down VVIX such that it is in a similar scale to VIX. Then subtract one from the other. SPX is scaled down, after we divide it by M2SL. I would guess that from 2009 to 2019, the growth was sustained because VIX was consistently low. I also noticed that VVIX this year is incredibly low. One would expect that with such this year's recession that VVIX would also pick up the pace. During periods of very high volatility like the Great Recession, VVIX tracks VIX. Not this year however... As a fellow trader pointed out quite some time ago: Now VIX is higher and it's behavior with VVIX is very similar to 2008. We could say that the current situation is much similar to 2000 or with 1970s with stagflation and not 2008. Some things however, they smell foul. The elephant in the room maybe... SKEW is in an all-time low. This could encourage investors to over-expose. THAT is when crashes happen. Overexposing when liquidity is being dried up from the FED, is a recipe for disaster. Even if we grow from here and everyone wins, who will have the money to pay back all these winnings? Especially now, with everyone investing like crazy, over-leveraging and such. And if EVERYONE is buying, who is selling? "Buying the dip" is part of the equation... I believe that the bottom is NOT in yet. And since charting indirect stuff like VIX, like housing, yields, energy, all point to the same direction, I cannot ignore them. PS. The elephant is the collapsed worldwide-production-chain. The elephant is that we are one step away from war or famine. And maybe, just maybe, the elephant is long gone... we just don't know it yet. And we are talking about how the DOW will not fall. We are convinced that we are in the bottom and we are buying the dip. We are dreaming of more money quicker. Tread lightly, for this is hallowed ground. -Father Grigori I am not a trader, I am a father of a cat named Alyx. Don't take what I say as trading advice.
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by akikostas
The many Bitcoin pricesEver wandered about how many BTC are in circulation? And how it's price would change if we took this into account? I searched a little if there is a ticker in here that tracks it but didn't bother. Instead I did the comparisons in Excel. The BTC price has many sides... Orange Line: Absolute BTC Price - Now $16,680 Blue Line: BTC divided by it's total supply - Today approximately $3,034 Green LIne: BTC /Supply divided by the Dollar Supply - Today approx. $1,216 Grey Line: BTC /Supply divided by Gold - $2.029 Do note that I made all the charts start in the exact same spot. They should have an identical starting point for them to follow a trajectory that makes sense. So what is the difference? BTC at it's bottom was $0.50 in July 2009 and reached the peak of $68997.75 in November 2021. This translates to an increase of 1,364,501x BTC /Supply however reached a maximum of 248,723x which is more than 5 times less. If we further divide by M2SL , this number goes to 101,334x a further 50% decrease. ( BTCUSD /SUPPLY/ M2SL ) Gold doesn't change it's that much, to 161,646x. ( BTCUSD /SUPPLY/ GOLD ) I didn't bother adding charts for BTCUSD / M2SL , BTCUSD / Gold since they are easy to do in TradingView. This shows us the effect of scarcity in commodities like BTC . BTC supply grew faster than the price. If you look at this link you will see a chart of the supply. It grew fast and now has almost halted. So what effect will this have in the price? Who knows, maybe BTC has 5x room to drop further in the following years, reaching sometime in the future an "equilibrium" lower from here. I wouldn't expect something such extreme as 3k, more like 7-8k would be a random guess. Who knows however what the future holds! BTC Supply bitcoinvisuals.com I will add below one close-up chart. Tread lightly, for this is hallowed ground. -Father Grigori.
INDEX:BTCUSD
by akikostas
DJI | Solid landNow we are in a thick moving sand. We need to drop much further to find solid land. A way of looking at the clouds is as if they are mud. We are dropping as if we are very big, heavy and slow. I have drawn some possible support levels. The upper 3 are taken from the DJI/M2SL ratio, and the bottom one is taken after we scale appropriately the GFC. We need to mind the speed, the size and the scale of this recession, to compare it with past ones. All 3 areas taken from this chart, are in important fib retracements. The retracements are drawn with the magnet tool and are very accurate. We are moving very fast downwards, so we could very easily collapse to 2008 levels. Also take a good look at the DJI/M2SL chart. It clearly shows that: For the past 20 years we haven't grown. Right now we are in a level which is in the middle of the GFC. And it feels like we are worse than in 2007. The M2SL comparison, transforms what we see (DJI price) to what we feel (DJI/M2SL). If you take a look at the charts I made regarding the true cost of energy, you will get a similar understanding of the tough spot we are in. PS. You must pray. Tread lightly, for this is hallowed ground. -Father Grigori
DJ:DJI
by akikostas
1
Bitcoin Adjusted For Commodity & M2SLChart shows historical price of Bitcoin adjusted against both the Global Commodity Price Index and M2SL, and may serve as a visual aid to illustrate Bitcoin price adjusted for rise in commodity prices while taking into account increase in money supply. This chart therefore accentuates and magnifies the recent downturn by taking into account both rising commodity prices due partially to increase in Money Supply and money supply increase itself. One could make the case that this chart distorts the price of Bitcoin. One could also make the case that the chart illustrates Bitcoin's shortcomings as an inflation hedge. Regression analysis shows retrace from cycle ATH to ATL becoming more severe with each downturn. By this measure, we might try to look for 88% retrace on this chart.
BITSTAMP:BTCUSD
by Linneaus
2
QQQ/M2SL Where does the economy stand important areas to watchHello Traders, This is somewhat an educational post as well as some TA with possible directions to watch for. update on #QQQ (#Nasdaq 100 ETF) vs #M2SL seasonally adjusted money flow in billions. When indexing this chart to a scale of 100 we may have a clearer picture of what is going to play out, important areas to watch for that may present opportunity and where the blood may shed. At the time of posting the last update, the index was around 111.11 and since raised all the way up to 133.62 hitting the monthly 20 EMA and coming right back down to a very important #support line dating all the way back to the .com bubble in 99’, as well as bringing action closer to the 13 year Support trend line (white ascending trend line) starting back at the bottom of the market in 09’. Which this recent pullback Nov 2021’ to present (35.28%) has been the largest correction experienced since that crash in 2007-2009 crash (58.03%) due to the #PrimeRateDebauchery ushered in via the #HousingMarketCollapse. If you look back to the #dotComBubble collapse starting in 99’ and the twin towers attacks which came shortly after you’ll see these pullbacks were nothing in comparison to the pullback (86.43%). Now that we have had a small history lesson about the chart its time to dive into this a bit deeper knowing some of the numbers and seeing the charts. To give a better understanding of how #M2 #money #supply seasonally adjusted works here is the definition from the #Fed #FRED data. “Billions of Dollars Seasonally Adjusted, M2 includes a broader set of financial assets held principally by households. M2 consists of M1 plus: (1) savings deposits (which include money market deposit accounts, or MMDAs); (2) small-denomination time deposits (time deposits in amounts of less than $100,000); and (3) balances in retail money #market #mutual funds (MMMFs). Seasonally adjusted M2 is computed by summing savings deposits, small-denomination time deposits, and retail MMMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.” To understand M2 you must understand M1 so, here is the definition from the Fed FRED data. "Before May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other checkable deposits (OCDs), consisting of negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, share draft accounts at credit unions, and demand deposits at thrift institutions. Beginning May 2020, M1 consists of (1) currency outside the U.S. #Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. #government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve #float; and (3) other liquid deposits, consisting of #OCDs and savings deposits (including money market deposit accounts). Seasonally adjusted M1 is constructed by summing currency, demand deposits, and OCDs (before May 2020) or other #liquid deposits (beginning May 2020), each seasonally adjusted separately. For more information on the H.6 release changes and the #regulatory #amendment that led to the creation of the other liquid deposits component and its inclusion in the M1 monetary aggregate, see the H.6 announcements and #Technical Q&As posted on December 17, 2020." So understanding the money that flows in the US in comparison to the QQQ (the Index that includes the 100 largest non-financial companies listed on the Nasdaq based on market cap.) We go into a deep dive comparing the charts with prior data and technical analysis along with what we see in the economy now bringing us to a point of understanding when this market may turn around or get much worse. As you see on the chart we have 3 main points of support, one in which we are currently at right now with the 13 year trend support slightly under where the action is at present on the chart. It is important to note, with more money potentially being printed via inflation stimulus packages in the near future this could likely prop this chart up a bit. The areas we want to watch for a bounce is where we are currently at and slightly below where the white trend line is holding. Personally I do not this this looks like a top to a market with a large impending crash as most think will be coming but, it is important we keep a level head and a neutral bias until we have confirmed data telling is the direction we are heading. Simply put, we must hold this trend line to continue this growth structure of the last 13 years. A good indication that is coming is chart action breaking above the yellow down trend line on the chart bullishly. Any break below the large ascending trend could mean for a few years of sideways markets and lower lows in the near future, which we will most likely see a slight bit of regardless in the next few weeks. I will come back and update this chart in a month or two... of when it becomes relative soon. Keep an eye on these major trends and supports in the mean time and most of all have a GREEN week! Savvy
NASDAQ:QQQ
by Savvythe1
1