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Ppiaco

You against inflationMoney printing has been a double-edged sword. One one hand ample liquidity helped the exponential productivity of the economy, on the other hand inflation hit hard. In periods of stagflation like the 1970s, immense inflation created an impenetrable ceiling for equities. In periods of extreme deflation (2010s), equities bubbled. It is interesting that in this period, inflation figures were are all-time lows, with immense money printing. With this chart we attempt to measure when and how much equities managed to overperform the weight of inflation. There are two methods of calculating inflation, one is total money printed, and the other is the "cumulative inflation". If we analyze SPX compared to money printed, this would be the outcome: This is not very helpful, since SPX is too closely related to total money printed. To measure "cumulative inflation" I attempted modifying this chart by @SPY_Master DBC*GOLD is a good estimate of inflation. Since we don't have enough historical data for the DBC index, we analyze one of it's cousins, the PPIACO index. DBC is an energy-focused mutual fund, while PPIACO measures the production cost. We assume that PPIACO*GOLD is a suitable replacement for DBC*GOLD. We end up with the cover chart, which I will briefly analyze, since it speaks on it's own. For almost 10 years we were attempting at penetrating the ribbon, to no avail... These fib-retracements are very beautiful... SPX: NDQ: They all prove that there is massive weight on top of us. After almost 10 years of trying to get back inside the high-energy-level above, can we do it now? Tread lightly, for this is hallowed ground. -Father Grigori
SP:SPX
by akikostas
4
Find The Swan!Nobody was prepared the time when the 2020 Black Swan came. But the location of the Swan is very interesting: First, SPX: Not very interesting of a spot... In the middle of nowhere really. Now, DJI/M2SL There has been an impenetrable ceiling for more than 10 years. We almost hit it a third time since 2008, and then the crash came. Long-term Inflation (Gold*PPIACO) divided by money earned from bonds (modified-yields*M2SL) Note that this chart above does not include equities. DJI/(modified-yields) This chart above measures the rate equities become worthy compared to the cost of money. In a sense, as the chart increases, equities take more of the form of "gold" compared to bonds. More about this in the following idea. These charts above show that the Swan occurred in a significant ceiling. A lockdown does not necessarily lead to massive wealth transfer to big companies, and an immediate crash. This chart below shows that the Swan came as an LPSY phenomenon, in the short-term recession no-one remembers. DJI*(modified-yields) vs DJI So in a sense, long-term charts prove that there was not much room above when the Swan occured. And the short-term chart proves that the event occurred at the absolute last moment , when there was no "supply" left (LPSY). The crash was so fast because there was not much volume left in circulation. So the sell-off was quick. The recovery was immediate because the 2020 Swan by itself didn't create structural issues in the economy. Tread lightly, for this is hallowed ground. -Father Grigori PS. I could get my account banned for spreading conspiracy and misinformation. I really don't care.
TVC:DJI
by akikostas
4
The DOW Road has Ended. Now Welcome Hyperinflation.The market has chosen a way to profit throughout all these years. This is the end of this way, QE lead us here... in this dead end. Equities was the "gold" of the time that passed. Now this is changing... If you read until the end of this idea, you will realize that a lot is changing. I will briefly analyze this chart and what it tells us. This is the ratio of equities compared to yields. I have modified yields using an equation I made up. This channel is drawn from 01/01/1950. This is a date I use since this is the day America 2.0 was born. I have talked about it on the MV = PQ idea linked in the end of this idea. Well, we have just missed this trend... Right now we could be witnessing the very beginning of US 3.0. Long-term technicals on this chart are deadly for DJI. So this chart above suggests that the new big thing is bonds. As you will now realize, this is not the entire story... The following are IMPORTANT: There are some things that trouble me... SPX compared to energy is showing signs of stagnation. There is substantial drop for equities ahead of us. So okay, energy cost is going to increase compared to equities, that is something we have taken for granted the past few months. We have talked about this a myriad times... This is not the entire story. This chart below shows that energy increases will overperform yield increases. So in a sense, inflation (calculated from commodity cost) will overperform yields. Inflation is poised to increase much more than yields. Until now yields were consistently decreasing, now there is no more room down for yields. Even if yields remain stable on today's levels, this chart suggests that energy prices will still increase. If yields increase, energy prices will increase more compared to yields. This is a recipe for hyperinflation... This chart below, shows more evidence towards the same conclusion... Basically, "long-term inflation" (PPIACO*GOLD) is creating bull-flags compared to "total money created from yields" (mod-yields*CURRCIR). This means that the cumulative price of production cost and gold cost, will substantially increase compared to what bonds yield in total. Conclusion: Chaos. No matter what politicians want, things are out of control right now. These charts suggest that. This is a long-term phenomenon which cannot change from free will. Nature is more powerful than we could ever hope to be ourselves. These charts are simply scary. I don't have the words to explain much. The charts speak for themselves. I am sorry for the rushed post, and any mistakes that I might have done. I began writing about DOW, and I found out that there is much more happening right now... We all knew that we could have increased cost of energy, and stagnating equities. I couldn't put the scale of them in perspective. I hope that these charts gave you some perspective, they certainly gave me a clear perspective. PS. While we cannot avoid what is coming, we have the power to choose what boat to take. The stranger told us that we cannot be in two different boats. We are basically obliged to choose our path. Tread lightly, for this is hallowed ground. -Father Grigori
TVC:DJI
by akikostas
10
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 | The Everything BubbleSPX vs Inflation is a chart I explained in the following idea. While this chart showed incredible golden-ratio behavior, there are some periods which stand out. The smooth dance of the ratio throughout the last 100 years, has some quirks (the red ellipses). These periods are not random, they all feature a bubble behavior. It is clear as day that in 1996 the .com bubble formed, which caused SPX to return to trend in 2003. The 2004-2008 stock market growth and the Great Financial Crisis are not apparent, since they are part of The Great 2000 Recession. They are in the middle of a long-term downwards trend. So where does this leave us? If this chart has any meaning, we are in the middle of the air, with incalculable drop for the chart in the future... One target can be pinpointed using probable fib-extensions, using retracements drawn from important highs and lows. It is 12 times lower than now, or 92% drop. It depends on how you look at it... PS. I know that charts don't go back in time. The red arrow is drawn towards the left for aesthetic reasons. Who knows how far downwards is the trend now... PS2. I invented a new name for the Head and Shoulders pattern. I call it Cerberus, the three-headed beast guarding the Underworld. Look at it in action: The tail of Cerberus is a dragon's head spewing flames, which in trading would be a bull-flag. Chart taken from SPY_Master Tread lightly, for this is hallowed ground. -Father Grigori
SP:SPX
by akikostas
6
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
The Oil WarOil is strictly tied to dollar price (petrodollar). World investors/consumers are under tremendous pressure, with absolute oil price exploding, coupled with an explosive dollar. They have to pay the cost for both... US investors enjoy a very competitive oil price (compared to treasuries). This year an investment in USOIL was very negatively performing compared to treasuries. Do note that there is a discrepancy between consumer oil (USOIL) and investment oil (USOIL/modified-yields). Rate hikes are not for inflation, they are for economic war advantage. During a war period, and in a deglobalized world, you need substantial purchasing power to import, and selectively export goods. Tread lightly, for this is hallowed ground. -Father Grigori
NYMEX:CL2!
by akikostas
2
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
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
Peak Equities?Happy Dump Year! What a shocking year... equities dropping, bond market failing and energy skyrocketing. Almost a perfect storm ain't it? But something ain't right... Have we passed the dump year or are we just started? Which number will we be talking about in the future, 22 or 23? And another question... have equities peaked? For the past year, bonds have been outperforming equities. But equities have been holding relatively strong despite the monumental increase in yields. Now we might have reached the point of diminishing returns. Every move we make is beginning to turn up against us. The similarity to the Great Depression is stunning. Stochastics don't help the situation much. Even if a total crash does not occur, the product looks fated to move horizontally. The cover chart pinpoints us on a fib retracement, with much resistance above. The drawn levels were respected throughout the last 15 years. Other equity comparisons follow suit... The charts above attempt to objectively calculate the price of equities compared to the cost of money. This chart below attempts to calculate the excess performance SPX has, compared to the performance of an investment in bonds. It is further modified by PPIACO, the producer price cost. Printed on the chart are some beautiful bull flags, and some very historically-important retracements. Equities will have much trouble gaining traction compared to bonds. This year, the relative performance of equities compared to bonds, showed a 60% drop. So 2022 was definitely a Dump Year. This is massive of a figure for the equity market, measured as relative performance. Also the bond market has suffered a lot this year. If equities have already sustained a massive hit compared to bonds, who will be the next to take the dive? Since their product (their cumulative profit) has just now showed signs of stagnation. Will equities drop again or bonds, or both? It smells like 2023 will have some sort of dump... An analysis of equity mutual funds compared to bond-focused mutual funds could have a lot to say... I leave it as an exercise for the TradingView community. Feel free to tag me if you analyze anything regarding it! PS. Happy Dump Days as of now (The peak of the product chart), for the main indices are: DJI: Nov. 8, 2022 SPX: Nov. 10, 2022 NDQ: Oct. 25, 2022 Take a look at price action of the indices after that day if you are curious on how real prices translated from that day onwards. Tread lightly, for this is hallowed ground. -Father Grigori
TVC:DJI
by akikostas
9
S&P 500 (SPX)/Producer Price Index (PPIACO) Leading Market LowerToday, I wanted to share a chart setup that was inspired by @Badcharts that highlights the ratio of S&P 500 (SPX) / Producer Price Index (PPIACO) correlatio n — which, as @Badcharts recently highlighted on a Twitter space led (or very closely correlated) with the downturn in the S&P 500 (SPX SPY ES1!) starting in late 21’. In addition to this, I wanted to layer on the S&P 500 (SPX), Unemployment Rate (UNRATE), & U.S. Recessions as these (3) inputs seem to have a very intersting correlation to the relative predictive timing of previous recessionary periods — both in 01’ & 08’. I’ve also added the “MACD Indicator” (bottom indicator) & the “Distance from Moving Average” (first indicator), using the SMA 144 & 200 Bar Lookback as these help highlight overbought/oversold conditions in the ratio of S&P 500 (SPX) / Producer Price Index (PPIACO) — which could help you identify tactical market positioning opportunities (long or short). Here is the chart key for this setup: 📊🔑 Black/White Bars = S&P 500 (SPX) / Producer Price Index (PPIACO) Blue Line = SPX (SPY ES1!) Orange Line = Unemployment (UNRATE) Vertical Black Dotted Line = Pre-Recession Ratio Peak (SPX/PPIACO) Vertical Orange Dotted Line = Pre-Recession Unemployment Trough (UNRATE) Vertical Blue Dotted Line = Pre-Recession S&P 500 Peak (SPX) 1990 - 2023 Overview (Monthly) 📊 *2001 Recession* (Monthly & Weekly) 📊 *NOTE: First indicator peak/trough to last indicator peak/trough = 5 bars (months)* Peak (SPX/PPIACO) = Mar. 00’ Trough (UNRATE) = Apr. 00’ Peak (SPX) = Aug. 00’ *2008 Recession* (Weekly & Daily) 📊 *NOTE: First indicator peak/trough to last indicator peak/trough = 5 bars (months)* Trough (UNRATE) = May 07’ Peak (SPX/PPIACO) = June 07’ Peak (SPX) = Oct. 07’ 2023 Recession? (Weekly & Daily) 📊 *NOTE: First indicator peak/trough to last indicator peak/trough = 7 bars (months), but no “technical recession”…* Peak (SPX) = Dec. 21’ Peak (SPX/PPIACO) = Jan. 00’ Trough (UNRATE) = July 22’ What are your initial thoughts & observations from this chart setup? Let me know in the comments below! 👇🏼
SP:SPXShort
by kylemusserco
1
SPX | Will this time be different?World on terror in 2001, world on Russia in 2022. Sticky inflation, explosive dollar and a tech bubble. And a housing crisis brewing? Not a recipe for success. I don't understand why anyone would expect actual, long-term growth from this exact point. The chart above shows something peculiar. We have bearishly tried to escape the ribbon and failed (for now?). Also the recent peak occurred in the 1.272 extension of 2000 peak, to 2009 bottom. A brief blow-off top in Dec.21 killed any hope of further growth. We have tremendous resistance above us, are we up for the task? Do we have heaps of money or are we over-leveraged from the 2-year party we had? Also look at this peculiar era. A linear channel that barely deviated from its course shaped the previous years. And now we lost all support. A long-term rising channel isn't very bullish for me. We have analyzed it with many many methods, that since the GFC we are experiencing RSI Divergence (RSI printing lower highs, price printing higher highs). Tread lightly, for this is hallowed ground. -Father Grigori PS: I <3 HL2
TVC:DXY
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
Editors' picks
SP:SPX
by akikostas
20
Inflation Selective Reporting & Narrative BLS published March PPI results this morning showing an increase of just over 11% year over year for $PPIFIS (Final Demand) or slightly more than 1.3% increase month over month. This leaves critical information out and paints a partial picture as $PPIACO (All Commodities) reflects a full 20.46% increase year over year and over a 2.8% increase in March over February. Shared monthly charts reflect trends for both $PPIACO and $PPIFIS with trend presenting projections of: PPIACO: +2.49% month over month, 21.8% year over year PPIFIS: +1.22% month over month, 11.45% year over year Price increases of all commodities, which is not reflected in the PPI narrative given the BLS news release, is an important factor to consider, especially when tracking against the market indices.
FRED:PPIFIS
by R0MM3LL
PPIACO (Producer Price Index)– it's RSI & BITCOIN are CorrelatedI believe PPIACO (Producer Price Index)– it's RSI & BITCOIN are Correlated PPIACO (Producer Price Index) is related to inflation . Look at the points in witch its RSI or the direction starts to change for PPIACO. They correspond with bottom or tops or changes in direction for BTC . Fascinating and makes sense. Black line is BTCUSD Pink Line is PPIACO RSI is of PPIACO Look at cross over points in RSI of 70 and 30 Next time RSI crosses over 70 and then comes back below we will be back in downward trend.
F
by braincipher
1