My Weirdest Market Indicator: The Fido 5

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.

 

fidelity top 5

 

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.

 

spx weekly chart

 

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