Excellent article Jack, can understand hours of research & back testing put into this indicator. Long writeups are great to refer back, but a short 45 sec telegram video illustrating a live example will be even better. Sorry if I'm asking for too much, but just a suggestion. Thanks for sharing your expertise with us, it's million bucks by itself. Good stuff !!!
Will do! Please just give me some time. I am juggling 4 kids, the wife, an autoimmune disorder, the Indicator, The Substack, The Signals, among other things. I'm coding most of this by myself.
Jack - Hope you had a great Christmas with your family ! I am still trying to analyze the lesson 2, thank you for the detailed explanation ! it would be nice if you can get some time to provide some historical example with SPY/SPX with the divergence and convergence of green/red triggers .
I will. You can also look back at the history of SPY on 1D candles and notice the pattern at 4-8 days of lagging on major reversals and notice that there is almost always a crossover before of red and green lines.
You write in one part that:" When it [red line] trends UPWARD, it often indicates that central banks and big players are adding liquidity, fueling risk-on conditions.". Later in your explanation you say that Red Line going UP is bad. Isn't this contradictory?
Fantastic question, I'm happy someone noticed :) This is the key here.
When global liquidity and high-yield credit measures (the "red line") suddenly rise. At the same time, the US Dollar Index ("green line") simultaneously heads lower; it would generally look like a textbook formula for a bullish outcome. After all, an injection of liquidity coupled with a weaker dollar often stimulates risk-taking, which might be expected to benefit equity indices such as SPY. However, we have found a surprising twist: in around 90% of the cases, this exact condition precedes a sharp drop in SPY just a few days later. It's as if central banks are rushing in with emergency support because some hidden fault in the system is on the verge of breaking, and the rapidly weakening dollar reflects fear that the Federal Reserve is losing grip on market stability.
This apparent paradox can be understood by looking at the motivations behind these large liquidity surges. They happen when policymakers see heightened stress in credit markets or systemic risks that could lead to significant turmoil. Meanwhile, a plummeting dollar might indicate that market participants expect an aggressive easing stance or lose confidence in the currency's safe-haven status. At first, global markets respond positively to the "rescue," which can increase high-yield credit instruments. Still, the broader equity market realizes that the massive intervention is a red flag, not a green light.
There is a deceptively bullish facade on the surface when liquidity shoots up, and the dollar falls, but it usually signals a deeper crisis brewing behind the scenes. Through ongoing research, we've consistently observed a lag of about four to seven days before SPY cracks under pressure masked by the initial burst of liquidity-driven optimism. This is something revolutionary(in my opinion) that we discovered, as it flips the usual logic that more liquidity and a weaker dollar should be a straightforward plus for stocks and underscores the power of hidden drivers beneath market reactions.
I also cannot disclose all the indicators that are part of the whole thing.
Yes. It works in reverse too! Look at the history on 1D candles. look at 4-8 days of lagging on major reversals and notice that there is almost always a crossover before,
Hey Jack. I think I still dont get it. I also understood this as a bullish signal and when I look at the chart, if the red line goes up, the SPY goes up as well. I also remember one of your Newsletter, in which you where talking about the HYG. After reading this, I still understood an upwards trending HYG as bullish. Of course, at a certain point it will dip, but when I look at the chart, the SPY follows the redline smoothly. Would you mind giving us some examples? Maybe a short video where you show the Oracle "in Action" with some insights? Thank you in advance for some more insights! Love this! :-)
Smart to combine technical and macro analysis. Institutional traders often create their strongest conviction plays when both the technical signals and broader economic indicators align.
What a great job Jack. When top-down (macro) meets bottom-up (micro) it's a kind of Holy Grail. Following your answer to Stewart (Dec 26) below, & the "surprising twist", I'm wondering how we can know the worlwide "global liquidity" (Β±M2, I presume) accurately and this live w/o any delay. I got in mind that central banks were disclosing this info with some lag. Should that still be the case, we may have a temporary timeframe misalignment. Couldn't that explain, in part, the twist? Anyway, I'm happy to listen to the young Oracle and to do as well as that of Omaha. Happy new year to you and your loved ones.
I have one question, given to the fact that green and red lines measure (FED,ECB,BOJ..+ HYG & USDX liquidity) why the lines differ from one ticker to another? Should not be the same?
Hey Jack. Thanks for the note. Probably just me but I still find it a bit tough to understand the indicators and the triggers . Also I try and apply it to some other stocks but donβt always see the buy and sell values
the indicator doesn't always find a position. try different tickers and different timeframes. I will be explaining and showing examples every day on the Telegram Channel and with time you will understand everything intuitively.
Probably a dumb question but it still shows up as True Price in my TV and also doesnβt have the options to set an alert with buy/stop/target/close. Uninstall and reinstall within TV?
How does this relate to the telegram "nvidial DGX" buy signals? I see today, for example, there is a MSFT buy signal, but if look at TV, there are no buy indicators for today.. I have lots of other questions, but this is a good starting point. Should the telegram buy signals not be the same and therefore show on TV?
The answer is very complex and probably warrants a whole article. It comes down to data from different sources, indicators, and timeframes and choosing only the best signals for the Telegram Channel. Also, we are monitoring the news for the Telegram Channel, so we are only posting signals with major news/positive analyst changes.
I will explain all of this in the 3rd or 4th lesson.
Excellent article Jack, can understand hours of research & back testing put into this indicator. Long writeups are great to refer back, but a short 45 sec telegram video illustrating a live example will be even better. Sorry if I'm asking for too much, but just a suggestion. Thanks for sharing your expertise with us, it's million bucks by itself. Good stuff !!!
Will do! Please just give me some time. I am juggling 4 kids, the wife, an autoimmune disorder, the Indicator, The Substack, The Signals, among other things. I'm coding most of this by myself.
all good, no stress my friend :)
a little bit of stress is productive :)))
grateful client my friend, keep the family rocking, we can wait.
Thatβs a very full plate.
Really appreciate your efforts! Hopefully you can find a little downtime to recharge.
I second this
Jack - Hope you had a great Christmas with your family ! I am still trying to analyze the lesson 2, thank you for the detailed explanation ! it would be nice if you can get some time to provide some historical example with SPY/SPX with the divergence and convergence of green/red triggers .
thank you for the Christmas comment. I hope you had a great one too and Happy New Year!
I will. You can also look back at the history of SPY on 1D candles and notice the pattern at 4-8 days of lagging on major reversals and notice that there is almost always a crossover before of red and green lines.
You write in one part that:" When it [red line] trends UPWARD, it often indicates that central banks and big players are adding liquidity, fueling risk-on conditions.". Later in your explanation you say that Red Line going UP is bad. Isn't this contradictory?
Fantastic question, I'm happy someone noticed :) This is the key here.
When global liquidity and high-yield credit measures (the "red line") suddenly rise. At the same time, the US Dollar Index ("green line") simultaneously heads lower; it would generally look like a textbook formula for a bullish outcome. After all, an injection of liquidity coupled with a weaker dollar often stimulates risk-taking, which might be expected to benefit equity indices such as SPY. However, we have found a surprising twist: in around 90% of the cases, this exact condition precedes a sharp drop in SPY just a few days later. It's as if central banks are rushing in with emergency support because some hidden fault in the system is on the verge of breaking, and the rapidly weakening dollar reflects fear that the Federal Reserve is losing grip on market stability.
This apparent paradox can be understood by looking at the motivations behind these large liquidity surges. They happen when policymakers see heightened stress in credit markets or systemic risks that could lead to significant turmoil. Meanwhile, a plummeting dollar might indicate that market participants expect an aggressive easing stance or lose confidence in the currency's safe-haven status. At first, global markets respond positively to the "rescue," which can increase high-yield credit instruments. Still, the broader equity market realizes that the massive intervention is a red flag, not a green light.
There is a deceptively bullish facade on the surface when liquidity shoots up, and the dollar falls, but it usually signals a deeper crisis brewing behind the scenes. Through ongoing research, we've consistently observed a lag of about four to seven days before SPY cracks under pressure masked by the initial burst of liquidity-driven optimism. This is something revolutionary(in my opinion) that we discovered, as it flips the usual logic that more liquidity and a weaker dollar should be a straightforward plus for stocks and underscores the power of hidden drivers beneath market reactions.
I also cannot disclose all the indicators that are part of the whole thing.
Does this signal still forecast bullish but on a longer lag.. when that liquidity injection / other responses actually work their way into the system?
Yes. It works in reverse too! Look at the history on 1D candles. look at 4-8 days of lagging on major reversals and notice that there is almost always a crossover before,
Hey Jack. I think I still dont get it. I also understood this as a bullish signal and when I look at the chart, if the red line goes up, the SPY goes up as well. I also remember one of your Newsletter, in which you where talking about the HYG. After reading this, I still understood an upwards trending HYG as bullish. Of course, at a certain point it will dip, but when I look at the chart, the SPY follows the redline smoothly. Would you mind giving us some examples? Maybe a short video where you show the Oracle "in Action" with some insights? Thank you in advance for some more insights! Love this! :-)
I was wondering the same. Thank you for clarifying.
Smart to combine technical and macro analysis. Institutional traders often create their strongest conviction plays when both the technical signals and broader economic indicators align.
Thank you Rick <3
What a great job Jack. When top-down (macro) meets bottom-up (micro) it's a kind of Holy Grail. Following your answer to Stewart (Dec 26) below, & the "surprising twist", I'm wondering how we can know the worlwide "global liquidity" (Β±M2, I presume) accurately and this live w/o any delay. I got in mind that central banks were disclosing this info with some lag. Should that still be the case, we may have a temporary timeframe misalignment. Couldn't that explain, in part, the twist? Anyway, I'm happy to listen to the young Oracle and to do as well as that of Omaha. Happy new year to you and your loved ones.
Happy New Year!
I don't think the problem is the delay of the banks disclosing the information but rather the corporations moving money into new investments.
Hi Jack,
Thank for sharing the guide with us.
I have one question, given to the fact that green and red lines measure (FED,ECB,BOJ..+ HYG & USDX liquidity) why the lines differ from one ticker to another? Should not be the same?
Many thanks
Riccardo
I am smoothing the lines according to the ticker using EMA.
Hey Jack. Thanks for the note. Probably just me but I still find it a bit tough to understand the indicators and the triggers . Also I try and apply it to some other stocks but donβt always see the buy and sell values
the indicator doesn't always find a position. try different tickers and different timeframes. I will be explaining and showing examples every day on the Telegram Channel and with time you will understand everything intuitively.
Probably a dumb question but it still shows up as True Price in my TV and also doesnβt have the options to set an alert with buy/stop/target/close. Uninstall and reinstall within TV?
Try that, also log out/in of TV. Happens all the time, not a dumb question at all.
thanks for your work on this.
How does this relate to the telegram "nvidial DGX" buy signals? I see today, for example, there is a MSFT buy signal, but if look at TV, there are no buy indicators for today.. I have lots of other questions, but this is a good starting point. Should the telegram buy signals not be the same and therefore show on TV?
The answer is very complex and probably warrants a whole article. It comes down to data from different sources, indicators, and timeframes and choosing only the best signals for the Telegram Channel. Also, we are monitoring the news for the Telegram Channel, so we are only posting signals with major news/positive analyst changes.
I will explain all of this in the 3rd or 4th lesson.
Love it! It will take some time to digest its proper usage and grasp the nuances in one quick glance.
Thank you!
Thank you so much. A lot more is coming!