Bespoke's Torture Indicator

Back in 2008 during the financial crisis, we highlighted an index we had created called the Bespoke Torture Indicator.  The index takes the average year-over-year percent change of the S&P 500, the US Dollar index, and the inverse of gold, oil, and the CRB Commodities index.  In mid-2008, the Torture Indicator hit extreme negatives, as the stock market and the dollar were falling while gold, oil, and other commodities were rising.  It was the most “torturous” period for the country since the 1970s and early 1980.

As shown in the charts below, the Torture Indicator bounced back in late 2008 and moved well into positive territory during the early stages of the bull market.  Since late 2009, however, the Indicator has been...

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