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M2

SPX Monthly - Adjusted for Real InflationThe assumptions are that money printing is real inflation as is often stated by Peter Schiff and M2 money supply is a good measure of the amount of money that has been printed into circulation. This data goes back to 1959 and makes the dot com bubble in 2000 look much more exuberant than current price levels. There is room for downside from here as the 1966 to 1974 decline and 2008 crash suggest. The chart also suggests that there has been no real stock market growth since the 1960s. It should be noted that the stock market was a good place to keep capital as an inflation hedge and a source of dividends and that cash kept over this time period would have lost pretty close to all of its value while earning no dividends. It demonstrates how important it is to not let cash sit in a bank and collect dust and to be financially literate. The central bank system punishes savers and forces participation in markets. The S&P can see a 75% increase or a 68% decrease from here and still be within its historical range. I’m leaning more bullish right now but these are very uncertain times, with the Fed having raised the fed funds rate to 4.75% and the stock market having declined for all of 2022. Nothing would surprise me but this chart helps to show that maybe the market isn’t as ridiculously priced as it looks when looking at the S&P 500 chart alone.
SP:SPX
by Skipper86
2
S&P 500 / M2 Money Stock, George Tritch's CycleNow we have a period of high inflation that, in my opinion, will continue for some time. Even if it falls (as the M2 money stock decline points out), we may have a second reversal wave of inflation during the revival after the current bear market. For this reason, a lot of people are waiting for a pivot, which, according to them, will mark the low. This statement is wrong. After pivots, we usually observe the biggest drops on the S&P 500. Similarly, with yield curves - they are inverted, which is a very strong bearish signal. At this point, I invite you to look at the related ideas about the 2008 analogy. The above chart shows the value of the S&P 500 index divided by the M2 Money Stock, which in general presents the situation on the money market - the amount of money in the economy. So we can see how the share prices relate to it. In addition, I added George Tritch's cycle (arrows), which has been assigned the most lows and highs in the past. Shaded arrows indicate less important turning points for this chart. The timing is more important than my projected path; it is only for visualization. The bottom of the current bear market should be in 2023. The next bull market with a high around 2026 should be less generous than the last. The major low of the actual cycle should be around 2032.   And that's all. Enjoy.
SP:SPX
by MichaelFX_ICT
QQQ/M2SL Where does the economy stand important areas to watchHello Traders, This is somewhat an educational post as well as some TA with possible directions to watch for. update on #QQQ (#Nasdaq 100 ETF) vs #M2SL seasonally adjusted money flow in billions. When indexing this chart to a scale of 100 we may have a clearer picture of what is going to play out, important areas to watch for that may present opportunity and where the blood may shed. At the time of posting the last update, the index was around 111.11 and since raised all the way up to 133.62 hitting the monthly 20 EMA and coming right back down to a very important #support line dating all the way back to the .com bubble in 99’, as well as bringing action closer to the 13 year Support trend line (white ascending trend line) starting back at the bottom of the market in 09’. Which this recent pullback Nov 2021’ to present (35.28%) has been the largest correction experienced since that crash in 2007-2009 crash (58.03%) due to the #PrimeRateDebauchery ushered in via the #HousingMarketCollapse. If you look back to the #dotComBubble collapse starting in 99’ and the twin towers attacks which came shortly after you’ll see these pullbacks were nothing in comparison to the pullback (86.43%). Now that we have had a small history lesson about the chart its time to dive into this a bit deeper knowing some of the numbers and seeing the charts. To give a better understanding of how #M2 #money #supply seasonally adjusted works here is the definition from the #Fed #FRED data. “Billions of Dollars Seasonally Adjusted, M2 includes a broader set of financial assets held principally by households. M2 consists of M1 plus: (1) savings deposits (which include money market deposit accounts, or MMDAs); (2) small-denomination time deposits (time deposits in amounts of less than $100,000); and (3) balances in retail money #market #mutual funds (MMMFs). Seasonally adjusted M2 is computed by summing savings deposits, small-denomination time deposits, and retail MMMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.” To understand M2 you must understand M1 so, here is the definition from the Fed FRED data. "Before May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other checkable deposits (OCDs), consisting of negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, share draft accounts at credit unions, and demand deposits at thrift institutions. Beginning May 2020, M1 consists of (1) currency outside the U.S. #Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. #government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve #float; and (3) other liquid deposits, consisting of #OCDs and savings deposits (including money market deposit accounts). Seasonally adjusted M1 is constructed by summing currency, demand deposits, and OCDs (before May 2020) or other #liquid deposits (beginning May 2020), each seasonally adjusted separately. For more information on the H.6 release changes and the #regulatory #amendment that led to the creation of the other liquid deposits component and its inclusion in the M1 monetary aggregate, see the H.6 announcements and #Technical Q&As posted on December 17, 2020." So understanding the money that flows in the US in comparison to the QQQ (the Index that includes the 100 largest non-financial companies listed on the Nasdaq based on market cap.) We go into a deep dive comparing the charts with prior data and technical analysis along with what we see in the economy now bringing us to a point of understanding when this market may turn around or get much worse. As you see on the chart we have 3 main points of support, one in which we are currently at right now with the 13 year trend support slightly under where the action is at present on the chart. It is important to note, with more money potentially being printed via inflation stimulus packages in the near future this could likely prop this chart up a bit. The areas we want to watch for a bounce is where we are currently at and slightly below where the white trend line is holding. Personally I do not this this looks like a top to a market with a large impending crash as most think will be coming but, it is important we keep a level head and a neutral bias until we have confirmed data telling is the direction we are heading. Simply put, we must hold this trend line to continue this growth structure of the last 13 years. A good indication that is coming is chart action breaking above the yellow down trend line on the chart bullishly. Any break below the large ascending trend could mean for a few years of sideways markets and lower lows in the near future, which we will most likely see a slight bit of regardless in the next few weeks. I will come back and update this chart in a month or two... of when it becomes relative soon. Keep an eye on these major trends and supports in the mean time and most of all have a GREEN week! Savvy
NASDAQ:QQQ
by Savvythe1
1
Gold vs M2The fundamental cheapness of gold is a fairly sideways chart. We are approaching a similar cheapness as was seen in 1999 to 2003 where we saw a ~700% rally until 2012. When we established a top in the channel in 2012, the market bottomed. It appears currently that it's not done selling off and has some room to run down, or is about to establish a sideways bottom soon. Personally, I would anticipate seeing the price EASILY hitting the top of the channel: countries around the world are not net buyers of US treasuries as in the 2008 liquidity crisis and therefore I don't believe that the dollar strength versus gold that took place after 2012 will be so drastic in the coming cycle. I hope you enjoyed this chart and thanks for taking a look. Good luck and don't forget to hedge your bets! - your fringe chartist
FX_IDC:XAGUSD
by fringe_chartist
2
Working Money vs Stock MarketM2 is the money in circulation issued by the government. (fred.stlouisfed.org) M2REAL is the real value of M2 deflated by the CPIAUCSL (Consumer Price Index for All Urban Consumers). (fred.stlouisfed.org) (fred.stlouisfed.org) M2REAL is in an infinite uptrend, with a downward correction now. The correlation with SPX is positive as both are falling. A change in correlation, either up or down, could indicate a move in SPX. Scenarios: 1. M2REAL falling, SPX falling: positive correlation 2. M2REAL rising, SPX rising: positive correlation 3. M2REAL falling, SPX rising: negative correlation 4. M2REAL rising, SPX falling: negative correlation With money more scarce and expensive due to inflation, I believe more in scenario 1. After this inflationary crisis is over, maybe scenarios 2 and 4.
FRED:M2REALShort
by andre_007
Not Cheap YetSome people say that things are getting cheap. I agree, they are in the process of getting cheap, but we're not quite there yet as far as historical bottoms go. The Russell isn't that cheap yet, still twice as expensive as in 2009. Unless a true miracle happens, it's hard to see any upside in this market as far as real wealth terms(as opposed to numerical price increase) in the near future. On the contrary, we have seen much further downsides in the past. We might see a reflexive bounce in the future and a bear market rally, though we are in a steep downward momentum. Good luck and don't forget to hedge your bets!
AMEX:IWMShort
by fringe_chartist
No more Steroids ..!Many of you may hear this many times in the past 2 years: The stock market is on steroids..! What does it mean? To answer this question you must know the definition of Money Supply and How FED play with this powerful tool! Monetary policy: refers to the strategies employed by a nation’s central bank with regard to the amount of money circulating in the economy, and what that money is worth. While the ultimate objective of monetary policy is to achieve long-term economic growth, central banks may have different stated goals toward this end. In the U.S., the Federal Reserve’s monetary policy goals are to promote maximum employment, stable prices, and moderate long-term interest rates. (Investopedia) When the economy overheats central banks raise interest rates and take other contractionary measures to slow things down - this can discourage investment and depress asset prices. During a recession, on the other hand, the central bank lowers rates and adds money and liquidity to the economy - stimulating investment and consumption, and having a generally positive impact on asset prices. (Investopedia) Restrictive Monetary Policy(QT) Raising rates makes borrowing more expensive, put a damper on rapid growth to keep it in check. Assets perform in this type of environment: - Equities, Bonds, Real Estate, and Commodities: Underperform - Cash tends to do well www.investopedia.com What Is M2? M2 is a calculation of the money supply that includes all elements of M1 as well as "near money." M1 includes cash and checking deposits, while near money refers to savings deposits, money market securities, and other time deposits (in amounts less than $100,000). These assets are less liquid than M1 and not as suitable as exchange mediums, but they can be quickly converted into cash or checking deposits. M2 is closely watched as an indicator of money supply and future inflation, and as a target of central bank monetary policy. (Investopedia) www.investopedia.com Federal Reserve: M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other liquid deposits, consisting of other checkable deposits (or OCDs, which comprise negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, share draft accounts at credit unions, and demand deposits at thrift institutions) and savings deposits (including money market deposit accounts). Seasonally adjusted M1 is constructed by summing currency, demand deposits, and other liquid deposits, each seasonally adjusted separately. M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less individual retirement account (IRA) and Keogh balances at depository institutions, and (2) balances in retail money market funds (MMFs) less IRA and Keogh balances at MMFs. Seasonally adjusted M2 is constructed by summing small-denomination time deposits and retail MMFs, each seasonally adjusted separately, and adding the result to seasonally adjusted M1. www.federalreserve.gov Best, Dr . Moshkelgosha M.D DISCLAIMER I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
FRED:M2REALEducation
by Moshkelgosha
DEAD CAT BOUNCE in #Stocks & Risk on assets.We are dead cat bouncing. #Biden is attempting to reduce the price of oil via favourable taxes so companies will produce more oil. This could help CPI moderate. Supply chains remain crippled, so this dead cat rolls over on the next piece of bad news. This could come in the form of unemployment start to accelerate. In prior recessions, unemployment typically spikes going from very low to very high levels over a short period of months at which point, welcome to HYPERstagflation that make the 1970s look tame. The upshot is #Bitcoin and stocks can fall a lot lower than current levels. Using the rationale that Bitcoin has already fallen 75% so, "How much further can it fall?" can lead to huge sums lost. In 2014 and 2018, it fell -87.5% and -84%, respectively. If Bitcoin were to fall again to such levels, it would represent another -50% drop from -75% if it fell to -87.5% off peak, not just -12.5%. #math
FRED:UNRATEShort
by BallaJi
3
Is the Market is a Ponzi? The Printing of Money and Growth8-minute video where I gloss over the big picture stuff relating to the Markets and as they relate to the M2 (WM2NS) Money Stock. This is a High Time Frame analysis of the Market charts like the Dow and SP500 vs the Printing of Money and the increase in Money Supply. Basically, the entire market exists as a function of printing money, organic growth hasn't been around for decades and our current highs are almost entirely because of the increase in Money Supply. The scariest one is the Covid dump and how even though the global economies were in many ways shut down, the market experienced a massive Bull Market. The fact is, that in relation to the Money Supply the Dow, SP500, Bitcoin, everything is pumped by printing money
SP:SPX
by TrendmasterOfficial
1
BTC + SPX Trade IdeaThis is a medium term swing/position trade that has a pretty good chance to play out. Check out this fib idea below which underscores the idea. Obviously, don't panic buy unless you like riskier trades. Ease into your entry! June thru October looks like a decent entry if nothing too crazy happens, but a surprise via some global disaster could RUIN this trade. Sellers are willing to accept lower prices for this past year, that's basically what the log returns is telling us as it's below 0. In other words, risk has not paid off in a while on this scale. Risk-averse HAS paid off. This is a contrarian trade. The crowd is now ultra bearish and this presents an opportunity of price discovery. Wait for them to come to you, don't panic and go to them. The wholesale price range is defined by the region of prices where most trades were made AND the result of those trades is highly random. The bottom and tops of this wholesale zone represent the golden ratio 0.618. Remember, the absolute value of the inverse of 0.618 is 0.382. Both of these fib levels are identical, one level represents sells and the other represents buys. In other words, we don't define where 0 or 1 is. We draw the golden ratio area of the fib box around the wholesale range, then we get the definition of 0 and 1. Be aware though, that if you do this same analysis but with Log Returns on a 2 Year timeframe instead of 1 Year, we could still be in a distribution zone. Don't put all your apples in this basket. Be diligent about your position: This gives us quite a startling conclusion. The rally of Dec 2018 was simply a bear market rally on a 2 Year scale. We could be in the very SAME situation now. Lower highs on the indicator, then lower lows. So even though it LOOKS like a decent buy on the 1 Year timeframe, we should NOT assume it's going to the moon if the price reaches our target (red crosshair) unless there is some drastic shift in monetary/fiscal policy which would cause a new cycle to suddenly appear. What do you think about all this craziness? I hope you liked the idea, and good luck. Don't forget to hedge your bets! :)
INDEX:BTCUSDLong
by fringe_chartist
11