S&P 500 IndexShort
S&P 500 (SPX)/Producer Price Index (PPIACO) Leading Market Lower
Updated
Today, 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) correlation — 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: 📊🔑
1990 - 2023 Overview (Monthly) 📊
*2001 Recession* (Monthly & Weekly) 📊
*NOTE: First indicator peak/trough to last indicator peak/trough = 5 bars (months)*
*2008 Recession* (Weekly & Daily) 📊
*NOTE: First indicator peak/trough to last indicator peak/trough = 5 bars (months)*
2023 Recession? (Weekly & Daily) 📊
*NOTE: First indicator peak/trough to last indicator peak/trough = 7 bars (months), but no “technical recession”…*
What are your initial thoughts & observations from this chart setup? Let me know in the comments below! 👇🏼
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! 👇🏼
Note
If you would like a copy of this chart template, you can copy that using this link: 📊tradingview.com/chart/Nk1LpnuE/
To Wealth & Prosperity,
Kyle
Kyle
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