Money supply (M2): A leading economic indicator by Clifford J. Sherry, Ph.D.
I want to show you an analytical technique that you can use to estimate the probability of future price
increases or decreases. I'll use the money supply figures (M2) from 1948-1978 as an example, but you
can apply this to any consistent, continuous series of prices. Along the way, we'll learn some interesting
things about the behavior of the money supply.
Fundamentalists (and possibly some technical analysts) seem to believe that economic indicators which
provide an indirect measure of aggregate supply and demand may give important insights into the
behavior of the stock, and possibly the commodities and futures markets.