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I had sent a copy of the M3 study to the guys at Markethistory.com and
they did a nice follow up on it. You can see the whole study at:
http://www.markethistory.com/content/dept/stocks/content.html/2750.html
James Bond Style Intrigue: Q and M
Thanks to some work by a reader, Ron McEwan and our new in-house
economist, Dr. Veroncia Brinson, we have produced a plot of seasonal
patterns and M3. This seasonal plot shows that Money Supply Growth
contracts on a seasonal basis during June and July. Since the Fed has
been raising rates of late, this seasonal curiosity in Money Supply seems
quite interesting. The graph projects the seaonal pattern forward to show
what money supply would look like if it behaved according to the
seasonals going forward in the year 2000. Then we put a simple line chart
of the S&P 500 on top of the money supply graph. If you find the green
arrows on the chart, you can see where peaks in the supply of money seem
to fit together with peaks in the S&P 500. If you follow the yellow
arrows, you can see where bottoms in money supply seem to match up with
some recent bottoms in the S&P 500.
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