Chart of the Week: Where Are We? Risk On or Risk Off?
In essence, this indicator tracks how well the FOMC is doing at re-inflating the economy and stock market. A high indicator value means that the trends in the CRB Index, gold and Treasury yields are strong and positive. As a measure of re-inflating assets, higher indicator values have been strongly correlated with rising equity prices. This can be seen in this graph where the red dots are those times the composite indicator is above the mid line value. Red dots mean that the Fed is successful in re-inflating the stock market and economy.
cow. 3.3.13.indicator [4] from ARL Advisers, LLC [5] on Vimeo [6].
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