SPX via Equation of Exchange
Hi everyone, I am doing some self study and have created the graph above.
using the equation of exchange M*V=P*Y I have calculated 1/Y.
Keeping the above in mind I calculate 1/Y (inverse because chart is easier to look at)
With the math listed here we can see that the recent volatility (past 2 years) may have been the result reaching the previous dotcom peak.
We are now resting on top of that peak as support. The trend is consistent and the Fiscal/Monetary response is firmly in control of the market.
If we were to break down from here this chart could be interesting to gauge where the bottom is without as much noise.
Please leave your comments and correct me if you see anything I can improve upon. I am still learning and not a financial advisor/professional so please do not make any trades on my advice.
If you do not look at this as 1/Y and instead just Y it could indicate that real output is falling over time however I would like to discuss this further if anyone has opinions.
Personally I am interested in Asain markets and Gold going forward.
- Salty
using the equation of exchange M*V=P*Y I have calculated 1/Y.
- M = Money Supply
- V = Money Velocity
- P = Price (S&P index value)
- Y = Real Output/Value
Keeping the above in mind I calculate 1/Y (inverse because chart is easier to look at)
- 1/Y = 1/(M*V/P)
- Adjusted Value = 1/(M2*M2V/SPX)
With the math listed here we can see that the recent volatility (past 2 years) may have been the result reaching the previous dotcom peak.
We are now resting on top of that peak as support. The trend is consistent and the Fiscal/Monetary response is firmly in control of the market.
If we were to break down from here this chart could be interesting to gauge where the bottom is without as much noise.
Please leave your comments and correct me if you see anything I can improve upon. I am still learning and not a financial advisor/professional so please do not make any trades on my advice.
If you do not look at this as 1/Y and instead just Y it could indicate that real output is falling over time however I would like to discuss this further if anyone has opinions.
Personally I am interested in Asain markets and Gold going forward.
- Salty
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