Newzage - Fed Net Liquidity
The Fed Net Liquidity indicator is a concept discovered by Max Anderson to calculate the fair value of SPX ( S&P 500 Index ).
The formula he shared on Twitter uses the Fed Balance Sheet , TGA (Treasury General Account), and Reverse Repo.
Net Liquidity = Fed Balance Sheet - ( TGA + Reverse Repo)
The data for each component above is accessible on the FRED website.
Fed Balance Sheet https://fred.stlouisfed.org/series/WALCL...
Treasury General Account ( TGA ) https://fred.stlouisfed.org/series/WTREG...
Reverse Repo https://fred.stlouisfed.org/series/RRPON...
This script uses net liquidity ( NL ) fair value calculation for SPX , then estimates entry and next target exit target for both long and short trades on SPY .
The script added RSI oversold/overbought signal to the original NL signal from Max... improving the "precision" of the buy/sell signals.
The script also uses RSI to estimate targets based on how overbought or oversold the index/ SPY is.
The formula he shared on Twitter uses the Fed Balance Sheet , TGA (Treasury General Account), and Reverse Repo.
Net Liquidity = Fed Balance Sheet - ( TGA + Reverse Repo)
The data for each component above is accessible on the FRED website.
Fed Balance Sheet https://fred.stlouisfed.org/series/WALCL...
Treasury General Account ( TGA ) https://fred.stlouisfed.org/series/WTREG...
Reverse Repo https://fred.stlouisfed.org/series/RRPON...
This script uses net liquidity ( NL ) fair value calculation for SPX , then estimates entry and next target exit target for both long and short trades on SPY .
The script added RSI oversold/overbought signal to the original NL signal from Max... improving the "precision" of the buy/sell signals.
The script also uses RSI to estimate targets based on how overbought or oversold the index/ SPY is.