Macro just got a ton easier for me!

Macro just got a ton easier for me!

https://twitter.com/GfI_Himmelreich/status/1660189780607369217

My backtest on it is not done, but the first sight looks great.

The idea is the following: if you get inflation right you and use TLT, XLE and XLK as a growth proxy you can determine the regime of the market.

Now the big question is how you determine growth, which I think the harder part of it.

Let the market guide you as a proxy sniffing out growth!

If truflation is down and XLK is strong = Quad 1 (inflation down, growth proxy up).

If truflation is up and XLK is strong = Quad 2 (inflation up, growth proxy up).

If truflation is up and XLE is strong (stronger than XLK!) = Quad 3 (inflation up, growth proxy down).

If truflation is down and TLT is strong = Quad 4 (inflation down, growth proxy down).

What to trade in the different regimes?

Well the best backtest I know comes from Optionbit:

https://optionbit.blog/what-works/?token=eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJpc3MiOiJodHRwOi8vd29yZHByZXNzLmNvbS9lYXJuIiwic3ViIjoxOTg3MjI5NDMsInVzZXJfaWQiOjIzNTQ2MDI2NSwiYmxvZ19zdWIiOiJhY3RpdmUiLCJzdWJzY3JpcHRpb25zIjp7IjExNzY3MiI6eyJlbmRfZGF0ZSI6IjIwMjMtMDYtMTkgMDY6NTE6MzYifX19.MjWW9oiE09b5jIKs4yl0IoungrlE2QyMVZqeCthSet0

I am adding @Crowded_Mkt_Rpt (longer term swings) + @BenzStanzie (shorter term $SPY swings) as the two best traders (that handle big size, tons of good traders, but not with this size!) on fintwit into the equation as a tactical confirmation.

All the best and best Regards

Andreas

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