Indexes vs M1 & M2 Money SupplyM1 = coins and currency in circulation + checkable (demand) deposit + traveler’s checks.
M2 = M1 + savings deposits + money market funds + certificates of deposit + other time deposits.
We are looking at the major US Indexes Dow 30, SPX 500, Nasdaq 100, & Russell 2000 vs each of these types of money supplies
As we print more we expect these money supplies to increase, so we can start to see the 'real growth' in terms of how much $ is 'out there'
In the more liquid M1 Money supply it looks like we may have bottomed here on the indexes by testing the 'all time' trend line
But in the less liquid M2 Money supply we /could/ expect a fall further if things really go south here. We never tested the 'all time' trend line. No /need/ to but if we did it would be within reason.
I examine lots of these 'composite' charts as I call them, but let me know your thoughts as well!
Manage your own risk
Much Love
GL HF
xoxo
snoop
Indexes
We are in an unprecedented fiscal experimentEconomic downturns are usually accompanied (and perhaps prolonged) by a tightening of private credit, as you can see on this chart of S&P 500 performance vs commercial and industrial loans from all commercial banks. Lending significantly lags stock market performance, but a downturn in lending generally confirms a recession, and an upturn in lending generally confirms a new bull market.
This time, however, is different-- at least in terms of the initial response. The rapid downturn in stocks was met with a huge spike in new private lending, encouraged by massive Fed liquidity, and the recovery of stocks was as sharp as the initial selloff. Now, however, lending has turned back downward, and it's possible that over the next year we could see the same tightening of credit that usually accompanies a recession. The Fed can increase bank reserves, but it can't increase borrowers' collateral or their appetite for risk in a difficult economic environment.
Does this downturn in private lending, like the previous ones, confirm that we're in a recession and that stocks will slide from here? Will the next upturn in private lending signal that we're back in a bull market? Only time will tell, but the results of this experiment will have huge ramifications for both policymakers and investors for decades to come.
Hat tip to @TayFx for help constructing this chart. Also check out his cool charts of SPX vs. M2 money supply and Fed balance sheet:
DOLLAR INDEX (DXY) Update & Important Decision Ahead!!!
DXY is retesting summer's structure low.
the price is currently consolidating within a narrow horizontal decision range.
because the current trend is bearish, I am bearish biased on greenback.
in case of a violation of the range to the downside, bearish rally will most likely continue.
next goals will be:
95.4 - daily resistance
94.8 - year's low
in case of a bullish violation of the range, USD may start recovering.
96.9 will be the first goal.
for now it is hard to predict with high accuracy the next usd move, so let the market decide first and then just act accordingly.
S&P500 Index (SPY) Accumulation & Bullish Continuation
hey guys,
it looks like spy is preparing for a bullish continuation.
with a sequence of higher lows on a daily and weakening bearish retracements,
the price is one more time testing 3230 horizontal resistance.
being broken to the upside (daily candle close above) it will trigger a buying reaction and the market will start growing further.
next goals will be based on this winter's highs:
3325
3385
S&P 500 Index Full Analysis (Still Bearish Here)I would like to give a full analysis of the S&P 500 Index (SPX) chart... Let's get started!
We will look at my classic signals and then a general view.
The classic bearish signals coming out of this SPX chart are as follow:
The first thing to notice here is a lower high compared to the 8-Jun.
I shared a chart on this date mentioning that the S&P 500 Index had peaked.
The next thing we have is a test/challenge of EMA10 as support (meaning, from up to down).
Since we have a lower high, the test of EMA10 signals lower prices.
We follow with a bearish cross on the MACD.
The RSI remains above 50 but trending lower, while the STOCH is showing a strong curve pointing down.
We also had a rising wedge pattern, another classic, which broke already a few weeks back.
The trading volume is going lower. Notice that the green volume was lower than previous days/weeks on the latest bounce that produced a lower high.
General view (SPX Bearish)
Don't get caught up in the noise, the hype, the news or \whatnot... Just look at the chart.
I haven't read a piece of news about the SPX basically ever, for Bitcoin or anything else for a long while, yet, I can continue to read the charts are produce a high accuracy rate... Everything is here... Everything is on the chart.
Keeping it simple... Trading below the "LAST PEAK" is bearish.
If prices move and close below the "LAST PEAK", it opens the door for additional bullish action but still, there are many factors that keep the bearish view present since the All-Time High is still intact.
So, we can see prices moving above the LAST PEAK which gives us a more bullish view but still remain cautious until the last high is taken out.
As for the initial analysis... We are bearish based on all the signals we just shared above.
What is your take my dear reader/follower/supporter?
Thanks a lot for your amazing and continued support.
Namaste.
BMW: Bearish Continuation & Short Trade
BMW has violated a rising parallel channel.
after that the price set a horizontal decision range and yesterday it was broken as well.
during today's trading session the price retested the 618 retracement of the last bearish leg,
showing a negative bearish reaction.
now bearish continuation is expected.
target levels:
57.15
56.0
GENERAL ELECTRIC (GE): Bearish Continuation
GE broke below a rising channel on 1H.
this breakout matches with a violation of a horizontal 6.87 structure support.
taking into consideration that the current midterm trend is bearish,
here we have a perfect trend continuation opportunity.
initial goal:
6.55
US500 Updated - The Next WeekI speculate here on formation of EW triangle and repetition of previous fractal. RSI 4H and 1D is getting downwards momentum though, so we might see a pull-back as far as to .786 to form a trend-line of the 1st degree - but at least .382 is expected before continuing up.
LUKOIL (LKOH) Perfect Example of Accumulation
Lukoil is trading in a bullish trend.
for more than 1 month the price is consolidating within a wide horizontal trading range.
based on the preceding price action our bias is bullish here and we are waiting for a bullish violation of the range.
daily breakout will trigger a buying reaction and the price will most likely keep growing.
next goal will be 5800!
CATERPILLAR (CAT) Flag Breakout & Bullish Continuation
hey guys,
on a mid-term perspective caterpillar is trading in a bullish trend.
at the beginning of June, the correction started and for the last two weeks the price was steadily going down within a falling channel
but NOW it looks like the market is returning to a trend.
the price broke above a resistance line of a bullish flag formation.
the breakout is considered to be confirmed and we now can expect a further bullish continuation.
target levels:
128.8
131.5
Gap Fill Fake out before crashConsidering how bullish the market has been one more fake out to the upside is a possibility. Momentum has definitely shifted but I can see a small move to the upside due to many short positions shorting the trend line and maybe getting squeezed and the gap up.Not all gaps get filled but a fair amount of them do.
PROCTER & GAMBLE (PG) May Keep Growing
PG showed a positive reaction to a 116.0 daily/4h structure support.
the price formed a double bottom with higher low on 1H and yesterday it broke above a minor horizontal resistance.
it looks like the stock will keep growing.
the best strategy for us is to wait for a retest of the broken resistance to buy.
initial goal - 119.0
S&P500 Index (SPY) Bearish Forecast
hey guys,
short trade went active this night on spy.
reason:
the price reached a strong resistance on 4H,
broke a channel to the downside and formed a double top formation on 1H
I entered the market on retest with sell limit.
now bearish continuation is expected.
target level:
3094
BP PLC: Catching Bullish Continuation
BP is stuck on a key daily/4h structure resistance.
with a sequence of higher lows and formation of the ascending triangle formation, it looks like buying volumes are accumulating for a breakout.
wait for 4H candle close above the underlined area.
then buy aggressively or on pullback aiming at:
334.0
343.0
DAX Index: How to Sell Wisely???
Dax index set a lower high today on 4H.
now the price on its way to 12160 - 12200 support cluster.
let's see the reaction of the market to that level.
bearish breakout (4H candle close below) of support will be a perfect trigger for us to short the market.
you can sell aggressively or on retest.
Target levels:
11914
11623
Stop:
12450
(if the market sets a new lower high again, you can adjust your stop to it)
in case of a bullish breakout of 12430, setup will be invalid.
RYANAIR (RYA) Key Level & Bullish Forecast
hey guys,
looks like ryanair has respected a recent key support level.
the price has formed an inverted h&s pattern on that and successfully broken and closed above its neckline.
now the price will most likely keep growing.
target levels:
12.2
13.0