Browse Symbol Stacks: $SPX: 20170121_SPX_2_M1.png

20170121_SPX_2_M1.png

not as overbought as last 2 times. Sizeable correction is possible not crash

Comments

Pipe&Snipes takeitallnightPipe&Snipes takeitallnight
Interesting chart, but I think it shows that we have really boxed ourselves in, the Fed, that is. It just takes ever more money printed to achieve a marginal effect in the economy or markets. If there really are no more worries of deflation, then perhaps we are much, much further from market ATH's than we realize? 1/21/17
ammoammo
not too bright Dimon, what does that chart tell, is it representing and overvalued dollar in money supply in the peak years and not so today 1/21/17
DimonDimon
I think this way: 
prices on all actives is driven by monetary inflation. Some actives become high of mean (long term overbought), some become deep below mean (long term oversold). On investing purposes one must buy oversold actives and sell it on overbought levels. 
Last 2 times public has been too optimistic, they bid price to overbought level. This time public is not as optimistic as last 2 times. 1/21/17
DimonDimon
it is ugly time to buy on investing time frame. One could wait for sizable correction (30%) to buy. 1/21/17
Holy Hand GrenadeHoly Hand Grenade
Can you do $SPX divided by money velocity, which is at an all time low? 1/22/17
DimonDimon
I can https://fred.stlouisfed.org/graph/?g=cso5 
 
But keep in mind velocity of money is useless. Velocity of money is calculated using simple formula Velocity = GDP / Money Supply. It is low only because of rapid rise of money supply recent years. It doesn't make sense to compare SPX and Velocity. 1/22/17
DimonDimon
It is low ONLY because of rapid rise of money supply recent years. It does not mean any more else. 1/22/17