Sunday, May 22, 2022

Bull-Bear Market

I define a bull-bear market as follows.

A bull market is when price is above 144 day SMA and a bear market is when price is below it.

I further look at macroeconomics and the resulting monetary stance of Central Banks. A valid bull market should be accompanied with accommodative credit policies while a regular bear market should show signs of restrictive credit policies.

For credit policies I look at the (rate of) change in monetary base (M2REAL) and at future interest rate expectations (FEDTARMD).

I therefore think we are currently in a bear market. Price is in many markets below the 144 day SMA. And Central Banks are tightening or planning to tighten the monetary base (QT) and are raising interest rates.

This is not investment advice. Do your own research. Please also read the disclaimer at the bottom of the blog.