Usage

Macro Liquidity Gap Usage

Finding deep value "Buy Zones" relies on understanding the divergence between central bank liquidity and asset prices.

Here is how to interpret the divergence lines and actionable signals:

• Identifying Value: When the Divergence line drops below the Buy Level threshold, the indicator paints a green Buy Zone. This implies that the selected index has fallen much further than the underlying global money supply supports, highlighting a macroeconomic value area.
• Catching Bottoms: Watch for the Buy Signal triangles on the main chart. These appear exactly when the market exits the deep Buy Zone, historically signaling the end of a liquidity-driven correction and the beginning of a fresh uptrend.
• Macro Context: Use the divergence line to gauge the broader environment. A rising divergence line means liquidity is expanding faster than the market index, which provides a bullish tailwind.