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UNEMPLOYMENT RATE vs SPXSo as you see - what comes down, must go up - UNEMPLOYMENT RATE is at record lows right now and when it did that - after some consolidation - it sttarted to grow - each time this happened, SPX entered a bear market. Calculating the amount of days since the breakout of the UNRATE trend - it is a range of ~ 100 to 400 days before starting the decline on SPX - right now it looks like UNRATE has broken the trend for more than 300 days already. So the decline isn't far. We haven't seen the worst yet.
FRED:UNRATE
by TheSecretsOfTrading
Number of Sunspots and Inflation CYCLESHi friends Today im going to explain about the relationship between Sunspot Numbers and Inflation rate from 1960 to now. so lets start with inventor of this theory : William Stanley Jevons's In 1875 and 1878 Jevons read two papers before the British Association which expounded his famous "sunspot theory" of the business cycle. Digging through mountains of statistics of economic and meteorological data, Jevons argued that there was a connection between the timing of commercial crises and the solar cycle. it called 5.31-Year Cycle too. In the stock market and in the economy, there are both natural frequencies and artificial excitation frequencies. The four-year presidential election cycle is a great example of an excitation frequency, and it has demonstrable effects on stock prices. The schedule of FOMC meetings 8x per year is another possible example of an artificial excitation frequency. When a demonstrable cycle period appears that one cannot tie to some manmade excitation frequency, then the supposition is that it is a "natural" frequency of the economic system. Something about the economy or the market results in an oscillation on a certain frequency which may not have a good outside explanation. Perhaps it is in how money flows. Perhaps it is in how human brains make decisions about surplus and scarcity. It is hard to know. This 5.31-year frequency in the CPIs cycle seems to fall into that category as a natural cycle, because the 5.31-year period does not match any known excitation frequency related to human activity nor the economic calendar. So that makes it probably a natural frequency. In above chart , there does seem to be a relationship between sunspots and the inflation rate. We see lots of instances when the peak of the sunspot cycle coincided with the peak of the inflation rate. There have been spikes in the inflation rate not tied to the sunspot cycle, such as the spike during the Arab Oil Embargo of 1973-74. this examples did, interestingly, come at the halfway point of the sunspot cycle, fitting the half-period harmonic principle(5.31 year cycle). The current rise in inflation fits both the longstanding 5.31-year cycle and the upswing in the sunspot cycle. Solar researchers expect the current sunspot cycle rise to end in July 2025, which is 3 years from now. But the 5.31-year cycle says a top in the inflation rate is expected right now. That would mean seeing the inflation rate bottoming around 2025 just as the sunspot cycle is peaking. Sometimes cycles present us with conflicts that are hard to reconcile. The point of the 5.31-year cycle that we can take away for right now is that the inflation rate should be falling for the next ~2.2 years. But that does not mean we get to zero percent inflation right away. The drops take a while to unfold. Inflation is likely with us for a while, and we have to get used to that idea.
ECONOMICS:USIRYYEducation
by TraderAmin-KZ
2
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
Buffet Indicator applied to todays market conditionsThe Buffet indicator uses overall US equities value compared to GDP as a simple metric. Applying this to previous bubbles there are several similarities indicating a potential recession and downward trend. Recently the Buffet indicator was rejected off of the QE bubble trend. Based on long term levels of fair market ratios in a NON QE environment, the indicator has lower to go. Fundamentals will be crucial over the next few quarters and will require continued growth and EPS to suit in murky market waters. With higher terminal rates, inverted yield curves, sticky inflation, and a consumer credit issue on the horizon (credit card debt is skyrocketing); it'll be a high risk game of chicken between Investors and the Fed all while watching the clock count down to the next quarter HOPING companies can outlast the inflation storm AND hope the fed pivots/reduces rates rather quickly.
FRED:WILL5000PR
by kentoe0001
1
24. A lesson from my experience - Part 3Greetings, Lets continue with our discussion. Today, we will try to look at the BIG picture. I started trading in October 2019. The main reason being that I find this to be challenging. I am trying to see if I can find a way to be profitable. Indeed the journey has been quite rough. I was struggling for 2 years trying to learn. But of course, listening to those 'Gurus' and MAIN STREAM only make things worse. As luck would have it, things started to chance in November 2021 when as luck would have it, I saw something on Youtube that makes me started to think. I will explain on what I had learned and shared it with you. I hope you would think about it yourself and apply common sense. I find that all answers are actually quite easy and plain. We can't see/understand if only because we are constantly being influenced by MAIN STREAM. Lets start off with EURUSD. Recently, many 'Gurus' are getting very excited. They are looking at their favorite INDICATOR DXY - RSI - 1W which is now above 80. They are PREDICTING that it is time for Dollar to fall very soon. Of course, the sheep who are following their guru is equally excited. As I have said previously, do not trade based on prediction. Trade based on facts. If you look at the chart above, inflation is way above FFR. You can see that the Fed's Dot Plot released on 17 March 2022 is very aggressive. They followed through with 50 bps hike on 5 May 2022 despite GDP registering a drop of 1.4% on 28 April 2022. Many had again been predicting that the Fed may capitulate and stop further rate hike!!! It was also said that after every financial crisis, the FRR seems to be trending lower. Back in 2019, the higher the FFR went was 2.5%. And going by 'trend', this time around, the rake hikes will not go beyond that. HAHAHAHA.......... only this time they might have forgot how high inflation is. Lets think about this. Would the Fed capitulate? I do not think so. I think the FFR would go on higher. As per the current Dot Plot, it would be 2.80% at the end of this year. The higher the FFR, the less the LIQUIDITY or Money Supply. Only by reducing Money Supply would inflation be tamed. In doing so, GDP would take a hit. Inflation is the most pressing issue at the moment and can not be left unchecked. How do we trade? I think we would just follow closely the next Fed Dot Plot to be released on 5 May 2022. There is no need for us to make any prediction. Just follow. If the Fed maintain the current stance or even tightened further, then expect EURUSD to fall further. Now lets talk about GOLD and BITCOIN. I do not trade them but it would be good for discussion. A lot of 'Gurus' out there has been making prediction that GOLD will go UP because of INFLATION. They advise their sheep to BUY BUY BUY. I guess by now all of them will be scratching their head. May are also scratching their balls. Why isn't GOLD going up? Actually the answer is very SIMPLE. To them, GOLD is not subjected to the law of Inflation. When price of GOLD goes up, they see it as growth or profit. Believe me, when price of GOLD goes up, it is also called inflation because all goods/services for sale on this earth is subjected to INFLATION. Please bear in mind that GOLD and BITCOIN is denominated in USD. Therefore its rise/fall is WHOLLY dependent on the the availability of USD. SO UNDERSTAND THIS, THE PRICE OF GOLD HAS NOTHING TO DO WITH INFLATION. ALL USD DENOMITED ASSETS ARE ONLY IMPACTED BY THE AVAILABILITY OF USD LIQUIDITY WHICH DEPENDS LARGELY ON THE FFR - CURRENT & EXPECTED. You can track the movement of gold to the M2 money supply. If money supply does not grow, where would the money come from to bid up assets price higher? At the moment, USD money supply % growth is falling. Cash is KING. As such, asset price is also falling - Stocks, Gold, Bitcoin etc. Bitcoin - I do not trade it and also do not follow it. But my advise to you is this, do not trade it for one sole reason - it is very very very very very volatile. Remember, we are here to make money, not to take risk. It is not worth the risk. Also remember, never believe anyone who tells you the price of this and that will go up in the FUTURE. No one knows what will happen in the future. They are just preying on your GREED. Focus solely on trading based on FACTS. Wait for 5 May 2022. Look at the Dot Plot. Then just follow. As for now, the Fed is telling you the FFR is projected to be 2.8% at the end of this year. They are not done with rate hikes. Just follow. Don't argue or make opposite predictions. If you find this useful, please share it with other traders. The sole reason I am doing this is that I know a lot of you guys is currently where I was when I first started. I just hope that my experience may be helpful, especially for beginners. Thank you. P/S : as always, do not just believe what I say. Use your common sense.
FRED:EFFREducation
by i_am_siew
5
Bitcoin🟠and the Trimmed Mean PCE⚫️inflation rate👀The Trimmed Mean PCE inflation stable See the reverse of Bitcoin🟠and the Trimmed Mean PCE⚫️inflation rate👀 Do we see the next Top in PCE and a following #bullish momentum for BTC dear Crypto Nation😎 Let me know your thoughts in the comments🤗 ⬇️⬇️⬇️ Likes and Follow for updates appreciated🤗 Disclaimer: Not financial advice Do your own research before investing The content shared is for educational purposes only and is my personal opinion
FRED:PCETRIM12M159SFRBDALLong
by Crypto4Everybody
Short IXIC, Long Cryptocurrency into the New Year1. Falling US inflation and rising US fed rates have yet to intersect. They will in 1H'23. ECONOMICS:USIRYY FRED:FEDFUNDS 2. US M2 tightening has reached 3%, but alllowing for some growth, it needs to go (linearly) another 6%-9% for a total of 9%-12% down from its previous all-time-high. ECONOMICS:USM2 3. IXIC is down 35% from its previous all-time -high, but may have to go (geometrically) another 35% for a total of 58% down. NASDAQ:IXIC 4. Cryptocurrency global market capitalisation is at a mere 3.5% of US M2, and has already dropped 60+%. CRYPTOCAP:TOTAL Conclusion : US tech equities may be at fundamental 2Y-forward fair value already, but short-term trading factors will harass prices for much of 2023 These short-term risks may be priced in quickly in 1Q'23, otherwise IXIC trades sideways all year, as earnings calls gradually catch up with M2 tightening policy. Meanwhile, as soon as inflation intersects with fed rates around 5.40%-5.70% between 22Mar'23 and 3'May23, optimism will impact crypto before IXIC.
FRED:T5YIELong
by yangjerng
⚫️Existing Home Sales🔵Home prices🔴Top S&P500Not an easy chart but give it a try dear Bitcoin and Crypto Nation Look at connections of different Tops in financial crisis 2008 and possible hints for near future: ⚫️Top Existing Home Sales precursor of 🔵Top Home prices precursor of 🔴Top S&P500 Let me know your thoughts in the comments🤗 ⬇️⬇️⬇️ Likes and Follow for updates appreciated🤗 Disclaimer: Not financial advice Do your own research before investing The content shared is for educational purposes only and is my personal opinion
ECONOMICS:USEHS
by Crypto4Everybody
Monthly Macro DigestSo, you want to get rich do yah? You either feel like the smartest person in the world (.001%), or hopeless and stupid (99.999%). For most, it's by pure chance and circumstance that they understand the mechanism by which they succeed. When were you born? When will you retire? Did you go to war or build a career? What is money anyway? How do I fit into all of this? Who's controlling all of this? It's all one big game. Show up at the right places at the right time and you can play too. Don't get disappeared or go nuts folks!
ECONOMICS:USIRYY
by rhall6451
Inflation!Oh yeah, inflation... Just how much though??? One of the main "benefactors" for inflation is money supply. Printing money fast and not managing it to create growth, is bad... unsurprisingly. For the last 2 years, an astronomical amount of money was printed. But have we seen it's effect? To figure out these HOT questions, we use charts. Opinions don't do us any good for important issues, facts do. First: M2SL (Money Supply) Specifically the rate of change. We use the ROC indicator, set in 24 months. This chart above, the ROC is looking familiar... It looks like the rate of change in money supply, follows the inflation rate. So we might have something. I hear you say, on the far right we see an explosion in money supply ROC, and we witness the explosive inflation rate we had this year. Thankfully, ROC is now almost turning negative, and inflation is showing signs of slowing down. Not so fast. Look at the following chart. In this chart we have 3 lines, blue is money supply ROC, orange is time-synced inflation rate, and the faint white line is inflation moved 2 years earlier. I tried to match the money supply ROC peaks with the inflation peaks of 1970s. Do note that the M2SL ROC for a specific date, takes the average ROC for the past 24 months (2 years). So the delay between money printing and inflation showing it is at least 2 years . The ROC chart is delayed by itself, and it shows inflation change 2 years before the official inflation rate changes. Alarmingly, the chart above shows us that we are in the middle of inflation explosion. A magnified view. I hear you say again, but inflation is rapidly dropping, so it is peaked. This chart above does have an indication of scale as well as timing. It is obvious that the rate of change stood much higher for long, more than any other time in history. So inflation should be quite substantial. Perhaps more than 15% we had in 1970s. We need to prove that it is higher though... Second: Total money printed I tried comparing the cumulative money printed in the decade before the inflation peak, this led me to a dead end. Percentages are identical. It looks like an inflationary shock today, too much was printed too fast. This is a key difference between the two periods. Third: What is the "fair" amount of money we should have printed? So what if, we try comparing money supply with the total GDP. The ratio M2SL/GDP. If you saw my previous idea, I learned that the GDP/M2SL ratio is basically the money velocity. The idea behind the M2SL/GDP (which is 1/M2V) is simple, just how much excess money have we printed for the gross domestic product we have? I hastily explained in my previous idea, and I will try to explain it again, comparing these two different periods. During the period of stagflation (1970s) we had money velocity in a slow but steady growth. Now we have the complete opposite. We have too much money printed for how much we produce. I don't have the knowledge to pinpoint how much of an increase this could cause to inflation though. I tried some things in my previous idea. And finally, fourth: Yields This are disappointing. Markets don't want high yields, and they refuse to price-in higher yields. It could take many months before this barrier is broken. This is a 3M chart, so timeframes are quite long. Market's yield is preceding FEDFUNDS. While I am not experienced on the mechanics of how the FED and the market are reading/predicting/using yield rates, this chart shows us that FEDFUNDS always follows US02Y. Keltner channels show us the opposite side of the EMA Ribbon. If we trust the one, we trust the other. We are almost inside the top Keltner channel, a bearish phenomenon. Unfortunately for the low-inflation-dream, we might have reached a top for now. FEDFUNDS is poised to grow a little more, and US02Y shows signs of weakness. Like 2008 (and every other rate-hike-era), we may have reached a top. And an extra: Inflation predictions for other countries I talk about the US, but I am from Greece. Right now, we are voting for next years budget. This budget is presented as a great one (let's not get into politics). Everything is good regarding it. Curiously, on the first paragraph basically, it states that "this budget is made considering an average inflation rate for 2023, 5 points higher than this year. (I am paraphrasing, I don't present an official transcript) Inflation reached a high of 12%, a 30 year record. Europe countries like mine, are bracing for higher inflation for next year. The problem is nowhere near to a solution. Tread lightly, for this is hallowed ground. -Father Grigori
ECONOMICS:USIRYY
by akikostas
11
Visualizing Business and Market Cycles Through Market Momentum 4In installments 1 - 3 we discussed building a market momentum matrix to help anticipate the business cycle. In this installment we introduce the OECD Composite Leading Indicator and plot the information derived from the momentum matrix onto a stylized business cycle. In the final installment we will make observations and share thoughts around the current cycle. As a reminder, this is the distilled version of the momentum matrix built in the first 3 installments. Before I plot the distilled sectors onto a stylized business/market cycle overlay, I plot equities, rates and commodities onto an overlay with the Organization for Economic Co-operation and Development (OECD) Composite Leading Indicator (CLI) for the United States. Readings above 100 (dashed red line) suggest economic expansion to come while below the 100 line suggests weakness, and perhaps recession to come. The index is currently below 100 and falling, consistent with future weakness. To help visualize the cycle, I plot 10 year rates (inverted), SPX and the Thompson Core CRB index along with the CLI. Viewed in the manner the current cycle appears to be consistent with past cycles in terms of sequencing. Rates top, economy (CLI) tops, equities top, commodities top and finally CLI enters the contraction phase. Finally, the distilled sectors are placed onto stylized market and economic cycle sine curves. If markets (dark blue curve) are correctly anticipating the business cycle (grey curve) the business cycle is somewhere past peak, and should be expected to steadily deteriorate over coming quarters. In part 5 we will draw conclusions. And finally, many of the topics and techniques discussed in this post are part of the CMT Associations Chartered Market Technician’s curriculum. Good Trading: Stewart Taylor, CMT Chartered Market Technician Taylor Financial Communications Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
FRED:USALOLITONOSTSAM
by CMT_Association
36
FOMC Rates Decision and the Effect on Gold**Repost from Dec 13th 2022 since the original post disappeared** Economic indicators from the past month indicate that the price of services is the key factor that helps prevent a rapid decline in inflation , although the price of goods had already dropped considerably and the labor market remained strong, showing no signs of slowing down the inflation rate. ECONOMICS:USCPMI In the graph above, one of the key economic indicators, the ISM Service Sector Index for the month of November, accelerated to 56.5, above the forecasted rate of 53.5 and the previous month's level of 54.4. Despite the rise in interest rates from the FED, the ISM indicated that the services sector is still going strong, correlating with the positive outcome in labor market data. FOMC Rates Decision 15 December 2022 Previous = 3.75-4.00% - Prediction from Bloomberg, OE, Forex Factory, Trading Economics = 4.25-4.50% Bloomberg, Oxford Economics, the Forex Factory, and Trading Economics predict that the Federal Reserve's interest rate will rise by 0.50%. The market forecast for the highest interest rate as of December 9, 2022 is 4.75-5.00% in May 2023, with a gradual decrease beginning in the third quarter of 2023. However, because the services sector has been performing well, the FED's interest rate cut may come later than expected by the market. Thus, from a fundamental standpoint, the USD is expected to continue appreciating, albeit not as strongly as in recent months. On the other hand, the gold price is expected to fall.
ECONOMICS:USNMPMIShort
by ChartTrail
Deflationary Shock Coming From 1915-1955 every spike in inflation was followed a short period of deflation. Most fundamentals are pointing towards such a deflationary period coming right now. Inventory of retailers is very high right now which will decrease demand in manufacturing and push prices down, oil prices are significantly down compared to earlier in the year and y/y readings will be deflationary in the coming months, new rent prices peak a few months ago, used car prices are coming down as well as most commodities. With this on top of the tight financial conditions the fed is creating I am expecting a very quick contraction in inflation. CPI over the last 5 months has been 1% ( 2.4% annualized ) also considering the inflationary stimulus check sent out to allegedly flight inflation have been entering the economy the last few months, the majority in October, inflation numbers still came in under expectations. In November m/m inflation was only 0.1% with the tailwinds of stimulus money. The hot CPI sectors are starting to slow down as well.
ECONOMICS:USIRYYShort
by Yogigolf
2