S&P 500 / M2 Money Stock, George Tritch's Cycle

2022年11月9日

Now 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.