🔥 Using Manufacturing PMI To Trade Bitcoin Cycles

9 мая 2023 г.

What is the Manufacturing PMI (investopedia)?

The Purchasing Managers' Index (PMI) is an economic indicator that measures the direction of trends in manufacturing and service sectors through a diffusion index. The PMI provides information about current and future business conditions to decision-makers, analysts, and investors. The PMI is based on a monthly survey of supply chain managers across 19 industries, covering both upstream and downstream activity. The PMI affects economic decisions by helping managers in a variety of roles to make production, purchasing, and inventory decisions. Investors can also use the PMI to their advantage, as it is a leading indicator of economic conditions that can yield profitable foresight into developing trends in the overall economy.

To offer better readability, I added a 10-period simple moving average to the PMI.

As seen on the chart, we can derive quite a lot of forecasting power from the US PMI. Once it bottoms BTC tends to go up, and once it tops BTC tends to go down. Even easier: a downward sloping moving average is bad and an upward sloping moving average is good for the markets.

As seen on the chart, it appears that the PMI has bottomed in November of 2022. Since then, both crypto and stocks have not made new lows and are grinding upward.

In the future, I suggest you add the PMI indicator to your long-term market analysis to determine whether it's a favorable time to buy or not.