Hi everyone,
Probably some of you are familiar with a Perma-bull and Youtuber named “Greg Mannarino” he is a controversial figure, but he has come up with an equation to measure risk in the stock market.
His equation is:
Price of Dollar * Price of 10 years yield / 1.61 ( a constant he came up with )
The equation looks like this:
DXY * US10YR / 1.61
His risk thresholds are:
Extreme 300+
High 200-300
Moderate 100-200
Low 50-100
Right now the number is at 234 which is high risk.
Some people in YouTube have backtested the formular in the stock market and it seems like it was sort of accurate predicting some rough times specially the crash of 2000, and 2008
I understand this is just a model and nobody can predict or time the market, but it's interesting how Greg connects the bond market and the dollar with the stock market.
Also, Greg if you are reading this, how did you come up with the 1.61 constant? Is this the golden ratio?
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