This monthly chart is weird because I have absolutely no idea why or how it works, but it does work. I can’t even remember where I found this, but it was sometime in 2015 while managing the market’s would-be topping process (that wasn’t).
We noted that the Fido 5 broke down in 2007 ahead of the crash of 2008. We noted its breakdown again in 2015, in line with what looked like a long-term topping situation in the broad market.
But similar to the way the S&P 500 crossed its weekly moving averages up in 2016 so too did Fido 5 recover its trend line. The lower panels show the Fido-SPX ratio (healthy) and Fido’s RSI (also healthy). For reference, here is the weekly SPX chart again, with the bullish moving average cross.
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