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Market Statistics

At Least Show the Full Chart

If you decide to divide S&P 500 by M2 money supply, at least show the full chart.

Does dividing S&P 500 by M2 money supply make any sense?

Probably it makes no sense. In my opinion it’s something like dividing apples by oranges and although both are consumed by people and are paid in dollars, the ratio isn’t very useful.

But if you decide to do that, at least be kind to show the full chart. Because if you show only this part of the chart and claim extreme value of the ratio, there is something maybe missing.


This is a monthly chart with most recent value for M2 for December 2020.

“Look, we have an extreme high above the 2007 top. Things are getting out of control!”

You could at least show the full chart.


The value is not that extreme at all and destroys the narrative.

“Don’t look at the full chart!”

“But you have called for a market top at least 27 times in the past 11 years using ratio and dual-axis charts.”

“This time is different. Look at my number of followers.”


Disclaimer:  No part of the analysis in this blog constitutes a trade recommendation. The past performance of any trading system or methodology is not necessarily indicative of future results. Read the full disclaimer here.


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