US Market Real Value Adjusted for CPI and Dollar Index

2024年8月10日

US Market Real Value Adjusted for CPI and Dollar Index

Provides quick access to this formula: (SP:SPX+NASDAQ_DLY:IXIC+TVC:DJI+CAPITALCOM:RTY)/4/(ECONOMICS:USCPI*TVC:DXY*100)


Overview:
This indicator provides a dynamic view of the US stock market's real value, adjusted for inflation and currency strength. It combines major stock indices including the S&P 500, NASDAQ, Dow Jones, and Russell 2000, and adjusts the composite index using the US Consumer Price Index (CPI) and the US Dollar Index (DXY). This adjustment helps to reveal the true market performance, stripped of inflationary effects and currency valuation changes.

Key Features:

• Composite Index Calculation: Averages the prices of SPX, IXIC, DJI, and RTY to create a broad market overview.
  
• Inflation Adjustment: Uses the CPI to adjust for the effects of inflation, ensuring that the real value changes in the stock market are highlighted.
  
• Currency Strength Adjustment: Applies the DXY to account for fluctuations in the strength of the US dollar, providing insights into how currency variations impact market valuation.
  
• Dynamic Base Calculation: Utilizes a rolling window to dynamically update base values, allowing for continuous reassessment of the market’s adjusted value as new data becomes available.
  

This indicator provides:

• Real Value Insights: By adjusting for both inflation and currency strength, this indicator offers a more accurate measure of the underlying market conditions.
  
• Dynamic Updates: With a rolling window approach, the indicator continually adapts, providing up-to-date information.
  
• Strategic Decisions: Helps in identifying true market growth or decline periods, aiding in strategic investment planning.
  

Usage:
To use this indicator, simply add it to your chart, and it will automatically display the adjusted composite index. This index can be particularly useful for investors looking to understand underlying market trends beyond nominal price movements, helping in making more informed investment decisions when comparing certain tickers to an average of the major US stock market indexes, adjusted for inflation and the strength of the US dollar.

Example Use Case:
A typical use case might involve comparing periods of high inflation to see how the overall US stock market performed in real terms, not just nominal terms. This can indicate whether the market growth was genuine or merely a reflection of inflation. By comparing this result to an average of these major indexes without adjusting for inflation or currency strength changes, you can see how significantly these forces can impact real gains or losses.

2024年8月10日

版本注释

US Market Real Value Adjusted for CPI and Dollar Index

Provides quick access to this formula: (SP:SPX+NASDAQ_DLY:IXIC+TVC:DJI+CAPITALCOM:RTY)/4/(ECONOMICS:USCPI*TVC:DXY*100)

Overview:
This indicator provides a dynamic view of the US stock market's real value, adjusted for inflation and currency strength. It combines major stock indices including the S&P 500, NASDAQ, Dow Jones, and Russell 2000, and adjusts the composite index using the US Consumer Price Index (CPI) and the US Dollar Index (DXY). This adjustment helps to reveal the true market performance, stripped of inflationary effects and currency valuation changes.

Key Features:

• Composite Index Calculation: Averages the prices of SPX, IXIC, DJI, and RTY to create a broad market overview.
  
• Inflation Adjustment: Uses the CPI to adjust for the effects of inflation, ensuring that the real value changes in the stock market are highlighted.
  
• Currency Strength Adjustment: Applies the DXY to account for fluctuations in the strength of the US dollar, providing insights into how currency variations impact market valuation.
  
• Dynamic Base Calculation: Utilizes a rolling window to dynamically update base values, allowing for continuous reassessment of the market’s adjusted value as new data becomes available.
  

This indicator provides:

• Real Value Insights: By adjusting for both inflation and currency strength, this indicator offers a more accurate measure of the underlying market conditions.
  
• Dynamic Updates: With a rolling window approach, the indicator continually adapts, providing up-to-date information.
  
• Strategic Decisions: Helps in identifying true market growth or decline periods, aiding in strategic investment planning.
  

Usage:
To use this indicator, simply add it to your chart, and it will automatically display the adjusted composite index. This index can be particularly useful for investors looking to understand underlying market trends beyond nominal price movements, helping in making more informed investment decisions when comparing certain tickers to an average of the major US stock market indexes, adjusted for inflation and the strength of the US dollar.

Example Use Case:
A typical use case might involve comparing periods of high inflation to see how the overall US stock market performed in real terms, not just nominal terms. This can indicate whether the market growth was genuine or merely a reflection of inflation. By comparing this result to an average of these major indexes without adjusting for inflation or currency strength changes, you can see how significantly these forces can impact real gains or losses.