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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Investment Strategies / Mechanical Investing
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Author: mungofitch ✹✺🐝 SILVER
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Number: of 6243 
Subject: An old monetary indicator
Date: 08/19/26 7:13 AM
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This is something I found in my old files.
https://www.stonewellfunds.com/SweetSpotIndicator....

Perhaps someone wants to try to reconstruct it? The data aren't hard to find.

I only got as far as determining that the smoothing they use isn't a simple obvious SMA, and of course the lag you choose is a function of the smoothing method, so you have to try to match the number of squiggles and the approximate crossover dates.

This isn't a market timing model by itself, but at least "by inspection" it seems to be an excellent omen for "you have a tailwind for being in a bull market". What I like about it is that it's pretty slow, and that it's old enough that it would be interesting to see if it's any better than random since then. Monetary conditions don't seem to mean quite what they used to.

The (unsmoothed) two year rate recently crossed cleanly above the policy rate five months ago and has kept rising, so it would appear that a bullish transition will occur soon.
At stockcharts.com you can graph this as $UST2Y-$$FEDRATE

Jim
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This community has written 6,224 posts about Mechanical Investing. The article-length ones it recommended most:
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