What this chart shows
Two moving averages: the 111-day, and the 350-day multiplied by two. The gauge tracks the ratio between them; at 1.000 the lines cross and the indicator fires. Red dashed verticals mark every historical cross.
How to read it
The historical record is genuinely striking — crosses landed within days of the 2013 (both peaks), 2017 and April 2021 tops. The gauge is useful as a proximity meter: far below 1, the specific condition this indicator watches for is nowhere near.
Limitations — why this is the weakest tool on this site
The parameters were found by searching combinations of moving averages until one matched past tops. That is data mining: with enough parameter pairs, some combination will always fit history perfectly by chance. The π coincidence is numerology, not mechanism — there is no economic reason issuance, holder behavior, or liquidity should care about the ratio of two arbitrary lookback windows.
The November 2021 cycle high printed without a cross, which is the out-of-sample failure the method predicted for itself. We include the indicator because it is widely watched (widely-watched signals can become mildly self-fulfilling), not because it is sound. It sits in the same methodological bucket as the Rainbow Chart.