This Mysterious Line Debunks a Big Market Myth

The relationship between these two things isn’t as clear-cut as most people think. [Jeff Clark's Market Minute]( Imre’s Note: If you missed my big event, it’s not too late… Saturday I unveiled my brand-new forex strategy… It’s a new way to [consistently extract profits]( from an overlooked corner in today’s volatile market. While others have lost $9 trillion in the stock market this year, my beta test group has been quietly collecting gains of $2,440, $1,694, and $2,145 in as little as one day. In total, we’ve seen a 448% return in just 76 days – and are on track to make 2,248% over the next year. To learn more about my forex service, [click right here to watch the replay](. And in today’s essay, I’m revealing a surprising market correlation… --------------------------------------------------------------- This Mysterious Line Debunks a Big Market Myth By Imre Gams, analyst, Market Minute Today, I’m going to dispel one of the biggest myths around the stock market using just one chart. But there’s a catch… I’m not going to show you what the chart is tracking until we’ve had a chance to discuss it together. Here’s a hint… The chart is going to have two data plots. The blue line represents the S&P 500, while the red line will remain a mystery. Recommended Link [My #1 way to make money right now…]( [image]( Have you heard of “The Money Multiplier”? No? That’s ok, it’s not your fault. In fact, most people haven’t heard of this strategy. And that’s intentional. Because the very people that use this strategy to make billions in the markets… It’s a strategy that gives you the chance to generate hundreds even thousands of dollars in a matter of weeks… sometimes even days. And the best part… It even works in the middle of this chaotic market. This year alone I’ve been able to show my readers gains like these: 89.19% in 12 days 156% in seven days 73% in just four days So what is this strategy that works no matter what’s going on in the markets? [Click this link to find out.]( -- Let’s take a look at the chart below… [(Click here to expand image)]( Before I give away the game, let’s look at the relationship between the S&P 500 and the red line. Sometimes, the red line and the S&P 500 move in the same direction together. Other times – like since the start of 2022 – the two lines move in opposite directions. Here’s a closer look at the correlation between these two lines from 2009 to now… [(Click here to expand image)]( Between 2009 and 2016, the S&P 500 gradually climbed higher while the red line mostly stayed flat. Then, between 2016 and 2020, both the red line and the S&P 500 climbed higher together. But between 2020 and 2022, the correlation weakened again. Stocks went higher once more while the red line plummeted. Finally, in 2022, the negative correlation between the red line and the S&P 500 continued. This means that as the red line is moving higher, the S&P 500 has moved lower. In conclusion, over the last 14 years or so, there’ve been times when the S&P 500 and the mysterious red line are highly correlated, negatively correlated, and not correlated at all. So, what is this red line and what is it tracking? Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. This might be surprising… But the red line represents the federal funds effective rate. In other words, the red line plots interest rates set by the Fed. This chart is relevant now more than ever, because it shows the market’s expectation toward the Fed. The market believes that if the Fed pivots and stops raising interest rates, then investors will buy back in. But I don’t know if that will come true. The data over the last 14 years clearly shows stocks and interest rates can move in the same direction together. And if I were to go further back in time, then there would be plenty of other examples to back this up. For example, between 2000 and 2002, the Nasdaq and interest rates fell together. But from 2003 to 2007, the Dow Jones Industrial Average and interest rates rose together. Of course, there’ve been times when stocks went up while interest rates have fallen – and vice versa… From 1984 to 1987, major stock market indexes practically doubled while interest rates fell by half. And from 1973 to 1974, the stock market got cut in half as interest rates doubled. [Market Wizard who predicted negative indexes in 2022 shares shocking new forecast]( The bottom line is that the relationship between interest rates and the stock market is not as clear-cut as most people think. We’ll have to wait and see whether the correlation between stocks and rates will continue to be negative… or if we’ll have another period where they move in the same direction. If the latter happens, at least now you won’t be surprised when the market doesn’t follow conventional economic logic. Happy trading, Imre Gams Analyst, Market Minute Reader Mailbag Which way do you think the correlation will go? Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com. In Case You Missed It… [A backdoor way to invest like President Trump?]( Expert who “wrote the book” on President Trump’s real estate empire shares unique group of stocks most investors have never heard of – including the name and ticker of his #1 pick. [Click here to learn more.]( [image]( Get Instant Access Click to read these free reports and automatically sign up for daily research. 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