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A Simple Indicator To Predict What Markets Will Do

www.asymmetricfinance.co

A Simple Indicator To Predict What Markets Will Do

You don't need a master's degree in economics to know how to use it.

Jun 1, 2022
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A Simple Indicator To Predict What Markets Will Do

www.asymmetricfinance.co

One of the best indicators for fast-growing stocks is the US 10Y bond. This works a little ahead of the other indices and gives us a pretty good view of the markets' direction.

So the process is as follows, when the US 10Y bond rises (green line), the Nasdaq tends to fall back sometime later (blue line), and vice versa.

Source: Trading View

Please don't stop following us for this reduction to absurdity. It doesn't take a genius in economics to know this.

What is really strange is that many people were surprised at the end of 2019 when Nasdaq pulled back by more than 20% in a few months. Again, the same thing was proven. First, the bond goes up, and then the stock market goes down. Then the bond goes down, and then the stock market goes up...

Source: Trading View

Even if we look at it on a much larger scale, this theory still works very well.

Source: Trading View

What is the reason for this?

Very simply, bonds "belong" to governments, and governments do many things except generate value. They print a lot of money, which devalues their bond, making the return much lower, while this money ends up in the companies that actually provide value.

Apple, Microsoft, Amazon, Google, etc. They help us make our lives better every day. They give us tools that bring value.

Today, money is not worth anything. Just say to the people of Germany that if they want to invest in government bonds, they have to do it by losing 7% per year of purchasing power.

Are you aware of what this means: "Leave your money here, and I promise you that you will only lose 7% a year".

Image

The increase in people and money means that there are fewer resources for everyone and that raw materials are worth more. The visionary Elon Musk has already said so.

Twitter avatar for @elonmusk
Elon Musk @elonmusk
Population collapse is the biggest threat to civilization https://t.co/ZrHN5DsrVB
Twitter avatar for @LegendaryEnergy
An0maly @LegendaryEnergy
REMINDER: Elon Musk (@elonmusk) for years has been telling people that birth rates are collapsing & most of the media is lying about the population growth problem. He believes the opposite of most billionaires who are guiding world policy. https://t.co/tICyp97Pij
8:13 PM ∙ May 24, 2022
142,598Likes21,937Retweets

What to do at this time?

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