Exposing Ideas to the Envelope of Serendipity

Contact moo at: bluechipbulldog@gmail.com

Monday, August 17, 2009

"V Shape Recovery Is An Absolute Farce" / "SingaltoNoise Ratio" / "Gold's Major Cycle"

Conclude what you will from these abstracts, but for me, while I find the topics very interesting and almost compelling, my daily trading decisions are not influenced by their implications or conclusions. There is difference between agreeing or disagreeing with a point of view verses how one actually develops and executes a trade on that basis.

A look at GDP data and whether or not a V-shaped recovery is/ever was in the cards. A comparison to Japan's Lost Decade is included.

V-Shaped Recovery in Perspective

Feedback Welcome - just a new idea. Potentially interesting divergence between typically mean reversion of z-scores between VWAP and Price and Average Price and Price. Also added Long-dated (since 3/6 low) VWAP and Average Price to indicate oversold nature of rally. Nothing too new on timing of turn so much as indicator of overbought nature of market.

SPY VWAP SignaltoNoise

These charts show the Major Cycle in the value of the S&P500 when adjusted for the price of gold. The y-axis is the number of ounces of gold to buy the index. The charts how the pattern is extremely similar for this mega-cycle and indicates a bottom in the value of the S&P500 in terms of Gold around 2015 to 2017 (your guess as to whether this means a very high gold price, very low S&P, or a bit of both!).

S&P 500 in Gold - Major Cycle
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