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The True S&P 500

This is a syndicated repost published with the permission of Slope of Hope – Technical Tools for Traders. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

We haven’t looked at this fascinating ratio chart in a while, so let’s dust it off. This is the S&P 500 cash index divided by the M2 money supply. As a reminder, this is, to my way of thinking, a more honest reflection of the market’s value, since it is denominated by a “normalized’ dollar. Take careful note how, even in this laughably over-inflated market, we have never even come close to the peak of the true bullish prosperity of the late 1990s. We’re just been faking it for twenty-two years.

Looking closer, you can see how we are currently beneath a major (and I do mean MAJOR) Fibonacci retracement level, suggesting massive resistance in this zone. Indeed, I’m seeing a setup that is remarkably similar to the 2007 top preceding the financial crisis.

Jerome Hayden Powell………..….let’s dance.

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