S&P500 vs M2 Money Supply (Orange)
Chart shows S&P500 (chart - LOG) divided by the M2 Money Supply (Orange - LOG).
M2 at this stage appears it may 'need' to travers back to the bottom of it's mean progression line channel (Orange / Green - dashed) before supplying liquidity back to the market for more S&P500 increases.
What would case the S&P500 to revisit the GREEN demand zone: M2 Money Supply Increases and S&P500 price decreases or a combination of price in either direction where the changes in M2 Money Supply are greater than those (in the same direction) as the S&P500.
In a new recession scenario, reducing M2 faster than the reducing price of the S&P500 will push into the red supply zone above; and a reducing S&P500 faster than M2 money supply will push us towards the Green Demand Zone.
As we have tagged the bottom of the RED Supply zone twice and a recessions appears on the cards with the reversion of the inverted bond yield curve now occurring (based on prior instances of this occurrence); a reducing S&P500 faster than M2 money supply will may be a likely outcome... is a revisit to the Green Demand Zone inevitable?
* Grey Bars show US Recessions.
M2 at this stage appears it may 'need' to travers back to the bottom of it's mean progression line channel (Orange / Green - dashed) before supplying liquidity back to the market for more S&P500 increases.
What would case the S&P500 to revisit the GREEN demand zone: M2 Money Supply Increases and S&P500 price decreases or a combination of price in either direction where the changes in M2 Money Supply are greater than those (in the same direction) as the S&P500.
In a new recession scenario, reducing M2 faster than the reducing price of the S&P500 will push into the red supply zone above; and a reducing S&P500 faster than M2 money supply will push us towards the Green Demand Zone.
As we have tagged the bottom of the RED Supply zone twice and a recessions appears on the cards with the reversion of the inverted bond yield curve now occurring (based on prior instances of this occurrence); a reducing S&P500 faster than M2 money supply will may be a likely outcome... is a revisit to the Green Demand Zone inevitable?
* Grey Bars show US Recessions.
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