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M2

SPX Bear Market RallyJust like in May 2001 and May 2008, we appear to be in a bear rally. This is difficult to see by just looking at SPX because SPX is manipulated by the money supply; However, if you look at SPX/M2, this becomes more clear. See the similarities on the RSI and MACD. This seems to suggest that some time before the end of July 2020, we will see a top in the market. The Fed has stated they are not considering negative interests rates. However, if you notice during the previous two recessions at the top of the bear market rallies marked with the red vertical lines, the Fed had to continue lowering rates. Therefore, if the Fed stays true to their word and does not push rates into negative territory, it's possible that this 2020 Recession/Depression will be significantly worse. If the Fed does not push rates negative, it's possible that some form of sustained "helicopter money" could be coming.
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SP:SPXShort
by liamcambra
14
Help me, FED Printer. You're my only hope.With S&P 500 closing on the 50 weekly MA. Markets are standing on the edge. All time highs are still totally possible if public sentiment allows for more printing. Months ago I suggested a possible crazy crash in DJI it's far for a certain reality though I found it eye opening to downside potential. I have linked it below. I am relatively neutral on market direction FED influence is to impact. Volatility is still high enough that stop positions could have a lot of downside risk. Looking at hedge strategies to cover those losses. Any suggestions welcome.
FRED:WM2NS
by JamesRennie
SPX vs M2 will it continueLooking at the M2 charts the the money printing seems to be slowing a bit still at a rate of over 8% per year. Comparing these to i'm considering 3 factors of what could be next. 1. Deflation stock market crashes and value floods into the dollar with another mass sell off. Looking for weakness in S&P as the printing slows. If deflation happens having USD is ideal. 2.Back to normal M2 money levels off to normal's. The stock market maintains gradual growth, GDP increases. Velocity of money increases and exponential growth in cost of goods is not felt. If back to normal happens having stocks might could be profitable. The biggest risk being the increase in cost of goods because of velocity of money increase. 3. Hyper Inflation this is least probable to happen next though still very much possible. In that case M2 would need to increase much more. Cash would be worthless, stocks would be next to worthless though increasing in price daily in relation to uses currency. In this case gold, silver and cryptocurrencies would be ideal. I think if this were to happen cryptocurrencies would have to compete with gold and silver to see which is better money.
FRED:WM2NS
by JamesRennie
USD in troubleThe numbers seem to indicator we are now at 17% inflation of M2 this year. It's just getting faster. It's likely May ends at 20%. If you don't understand why markets don't reflect this please read my post Can't feel inflation yet I linked it at the bottom. At this rate by next September M2 inflation would be equal from start of 2020 till 2021 September and 2008-2020. Based on the currently numbers it's likely to be faster then that. As for the simplicity of the math I calculated staying at our current growth rate. The numbers so the rate increasing unless something changes it will happen faster. Many people think Covid-19 being over might stop this growth though that does not factor time for businesses to start recovering. Also when businesses start to recover and consumer confidence increases so will spending. The velocity of money increasing will mean people start to feel the effects of inflation.
FRED:WM2NS
by JamesRennie
Can't feel inflation yetCan't feel the affects of inflation yet because the money that has been added to the financial system has not started to move yet. If we look at the comparison M2 money has increased by over 100% since 2008 yet the flow or velocity of money is down 30%. Keeping in mind that since the start of 2020 there has been an increase of M2 money around 16%. While many assets crashed against the dollar showing signs of deflation even though on paper money supply should be causing inflation. That is caused by money not moving and as a result there can be a steep devaluing of the currency once people start to spend again. "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, mutual funds, and other time deposits. 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." www.investopedia.com "What is Velocity of Money? The velocity of money is a measurement of the rate at which money is exchanged in an economy. It is the number of times that money moves from one entity to another. It also refers to how much a unit of currency is used in a given period of time. Simply put, it's the rate at which consumers and businesses in an economy collectively spend money. The velocity of money is usually measured as a ratio of gross domestic product (GDP) to a country's M1 or M2 money supply." www.investopedia.com
FRED:M2V
by JamesRennie
2
Funny not funnyIt's funny how fast this is going up 16% in the since the start of the year. Sadly most people don't know anything about M2 money or Fed money printing. They will be the victims of this. Though I do believe it's best to not live the victim life. People should be educating themselves rather then blaming others. Regardless it's hard to watch people go rough times. Including the 120 Million people globally predicted by world food program to be at risk of starving due to lock down impacts on economics.
FRED:WM2NSLong
by JamesRennie
Fed Prints Money to Fight COVID19: M1 and M2The chart shows the sharp increase in US "money supply: upon Senate approval of a $2 trillion coronavirus stimulus package Money Supply: There are two definitions of money: M1 and M2 money supply. M1 money supply includes those monies that are very liquid such as cash, checkable (demand) deposits, and traveler’s checks M2 money supply is less liquid in nature and includes M1 plus savings and time deposits, certificates of deposits, and money market funds. The Federal Open Market Committee (FOMC) and associated economic advisers meet regularly to assess the U.S. money supply and general economic condition. If it is determined if, and how much, new money needs to be created.
FRED:WM1NS
by gb50k
1
M2 Inverse HnS; Inflation rate increase - QuantRsi 1M From investopedia: "Generally speaking, inflation occurs if M2 money supply expands faster than the rate of productive growth in the overall economy" What I'm looking at here is a classical charting pattern painted by the QuantRsi: With the QuantRsi applied to the Monthly M2 chart, a pattern is painted which can be used for technical analysis and classical charting. Looking at the indicator as well as fibs drawn (log scale chart, correct fib tool used to prevent this issue: getsatisfaction.com ) the M2 money stock looks like it is ready for a large increase sometime around 2020-2021. This, coupled with slowed economic growth from rising interest rates, will result in increasing dollar inflation. Because HnS patterns often have continuation when the neckline is broken, a QRsi value of +7 for M2 on the Monthly chart would confirm this idea. Based solely on technicals, I believe that the inflation velocity will increase well in to 2025-2030. This coincides with fundamental analysis and other economic forecasts.
FRED:WM2NSLong
by SNOW_CITY
The 2020 OUTLOOK: Liquidity, Momentum and Stocks|Part (3/4)Short analysis on importance of ample liquidity ; Series on Equities and the 2020 Outlook: Part (3/4)- 28th Dec 19' 1. Naturally, there's a constant growth in money supply. Part of it ends up as investments in stocks. Hence, it is useful to look at the ratio between money supply and the returns on the market to assess the relative value of the market. This principle becomes especially important at the end of cycles, especially in a cycle that's driven by momentum . Comparatively, stocks aren't as overvalued as they were during the dot.com bubble, but at the same time the monetary base(purple line) has quadrupled. In my last post I discussed the repo market and the balance sheet expansion. 2. Discussing the chart and starting with the cycle line at the bottom of the chart. It seems that, the market resets every 2.5 - 3 years . I n some ways, these intervals are influenced by liquidity crunches, and can be named liquidity cycles . Currently we are at a structural point, where the cycle ended in 2008 . This may be a short term resistance point. Thus far, the chart has been following the pitchfork trend-line quite well, and if this trend continues, I am expecting that the trend will touch the 0.618 fib retracement level in the next 2 years. Here's how rate cycles have developed since the 80's. To sum up this idea. As I have discussed numerous times in my previous posts, expecting rise in volatility in 2020 until things settle after the election. This is just a noise . Most importantly in terms of growth and how equities will perform will be the outcome of the trade/cold war. China plays a major role in the liquidity cycle as the worlds biggest exporter. The cold war itself, at this point is here to stay . Phase I is completely unimportant in the grand scheme of things. This is it for money supply and the SPX, thanks for the continuous support. -Step_ahead_ofthemarket- These are my two of my latest and most relatable ideas on the SPX and Investing. The broad market outlook and guidance: Investing Strategies, Value vs Momentum: ________________________________________________________________________________________ >>I do not share my ideas for the likes or the views. This channel is only dedicated to well informed research and other noteworthy and interesting market stories.>> However, if you'd like to support me and get informed in the greatest of details, every thumbs up and follow is greatly appreciated! Disclosure: This is just an opinion, you decide what to do with your own money. For any further references or use of my content- contact me through any of my social media channels.
SP:SPX
by step_ahead_ofthemarket
2
Velocity of money signaling economic depressionM2 money velocity is considered the pulse of an economy. This metric refers to the number of times a unit of currency changes hands between people and businesses. As you can see, the velocity of money has been nosediving for decades. This is the story of the real economy, not the financially engineered stock market. Notice that as interest rates began to normalize, the velocity of money saw some relief in its drastic fall. There's no doubt it will continue falling as interest rates move lower once again.
FRED:M2V
by Brian_Nibley
M2 Inverse HnS - Inflation Rate set to increase - 1M QuantRsiFrom investopedia: "Generally speaking, inflation occurs if M2 money supply expands faster than the rate of productive growth in the overall economy" what I'm looking at here is a classical charting pattern painted by the QuantRsi: Applied to the Monthly M2 chart. Looking at the indicator as well as the fibs (log scale chart, correct fib tool used to prevent this issue: getsatisfaction.com ) the M2 money stock looks like it is ready for a large increase sometime around 2020-2021. This, coupled with slowed economic growth from rising interest rates, will result in increasing dollar inflation. Because HnS patterns often have continuation when the neckline is broken, a QRsi value of +7 for M2 on the Monthly chart would confirm this idea. Based solely on technicals, I believe that the inflation velocity will increase well in to 2025-2030. This coincides with fundamental analysis and other economic forecasts.
FRED:WM2NSLong
by SNOW_CITY