Visualizing Economic Cycles: The Investment Clock Orbital Graph

The Investment Clock Orbital Graph serves as an advanced visualization tool for traders and investors, allowing them to monitor economic cycles through a dynamic scatter plot that compares GDP growth and CPI inflation rates.
This tool integrates two effective TradingView indicators:
1. LuxAlgo’s Relative Strength Scatter Plot, which is used to track relative strength.
2. The Investment Clock Indicator, which provides a cycle-based perspective on market rotations. This indicator offers extensive insights into the Investment Clock.
By merging these methodologies, the Investment Clock Orbital Graph allows traders to visualize economic momentum and inflation trends in a distinctive orbital scatter plot.
Key Features & Enhancements:
- Orbital Graph Presentation: It illustrates GDP growth and CPI inflation as a dynamic scatter plot, reflecting the economy's various phases.
- Quadrant-Based Economic Regimes: It distinguishes four critical economic phases:
1) Overheating (High Growth, High Inflation)
2) Stagflation (Low Growth, High Inflation)
3) Recovery (High Growth, Low Inflation)
4) Reflation (Low Growth, Low Inflation)
- Data-Driven Insights: It leverages accurate GDP and CPI data from FRED (Federal Reserve Economic Data).
- Historical Economic Evolution Tracking: It monitors past economic cycles to highlight momentum and cyclical trends.
- Customizable Settings: Users can adjust sustainable GDP growth and inflation thresholds, trail length, and scatter plot resolution.
- Auto-Labeled Quadrants with Updated Market Guidance: Each quadrant features updated tooltips and annotations to assist traders in making informed decisions.
- Live Macro Forecasting: It helps traders predict future market conditions, interest rate changes, and sector rotations.
Using the Graph for Trading Decisions:
The Investment Clock Orbital Graph aids traders and macro investors by recognizing market phases and offering insights into asset class performance under various economic conditions.
1. Identify the Current Quadrant: Check the latest point on the orbital graph to determine if the economy is in Overheating, Stagflation, Recovery, or Reflation.
2. Forecast Market Trends: The trajectory of points can indicate future economic changes:
- Overheating to Stagflation suggests economic slowdowns and bearish stock markets.
- Stagflation to Reflation indicates potential interest rate cuts, benefiting bonds and defensive stocks.
- Reflation to Recovery suggests a risk-on rally, favoring technology and cyclicals.
- Recovery to Overheating indicates rising commodities and inflation, prompting central bank action.
3. Align Trading and Investment Strategies:
- Overheating: Prioritize commodities and energy.
- Stagflation: Favor defensive assets.
- Recovery: Focus on growth stocks.
- Reflation: Invest in bonds, value stocks, and financials.
4. Monitor Trends Over Time: This indicator allows traders to visualize economic movements over several months, helping to confirm long-term trends against short-term fluctuations.
The Investment Clock Orbital Graph is a crucial macro trading tool, offering real-time insights into economic conditions. By comparing GDP growth with CPI inflation, traders and investors can align their portfolios with significant macroeconomic shifts, predict sector rotations, and foresee changes in central bank policies.
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