About RecessionALERT

Dwaine has a Bachelor of Science (BSc Hons) university degree majoring in computer science, math & statistics and is a full-time trader and investor. His passion for numbers and keen research & analytic ability has helped grow RecessionALERT into a company used by hundreds of hedge funds, brokerage firms and financial advisers around the world.
Author Archive | RecessionALERT

Understanding SP500 Gen2 Persistent Current Trend (PCT) probability model

Background The Gen2 probability model we maintain for PRO subscribers for the SP500 provides for short, medium, long-term and macro-term probabilities of market troughs/peaks. It does this by examining current up/down trends across the 4 time-horizons mentioned and compares them to a 30-year historical record of said trends with regards to both duration of trend […]

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Update on US & Global Economy

Despite all the traditional leading indicators warning of recession for some time now, the US economy seems “robust” with unemployment stubbornly making new lows. We touched on the suspected reasons for this in our public note “The Delayed Recession” which offers the most plausible reasoning for this. However, if we dig a little deeper under […]

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The Delayed Recession

The U.S. Bureau of Labor Statistics announced a short while back that US national unemployment rate was 3.8% in August and September, versus the lows of 3.4% witnessed in both January and April 2023. On the surface, the employment situation looks healthy. Against the backdrop of virtually every leading indicator warning of recession (for quite […]

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Generation-2 Market Probability Models

For many years now, we have provided multifactor trough/peak probability models for subscribers for SP500, QQQ (Nasdaq-100), GLD (Gold), IWM (small-caps), BTC (Bitcoin), AGG (Bond market), VTI (Total market), EFA (Developed markets ex U.S & Canada), EEM (Emerging markets) and IJH (mid-caps). You can read about their methodology in this research note. Running and using […]

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US 10-Year T-Note Probability Model

Introduction The 10-year Treasury note is a debt obligation issued by the United States government with a maturity of 10 years upon initial issuance. A 10-year Treasury note pays interest at a fixed rate once every six months and pays the face value to the holder at maturity. The 10-year Treasury yield is the current […]

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A Recession Forecasting Diffusion (RFD)

Since we originally designed and built the Weekly SuperIndex recession model, we have created fourteen other quantitative recession models for clients over the last decade. These range from broad-based short, medium, and long-term composite leading & coincident economic indicators to composites focused on Housing, Labor, Gross Domestic Product & Income and Valuations. Each of these […]

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The Lowry buy-the-dip Indicator

On 26th February 2002, Paul F. Desmond from Lowry’s Research published a seminal paper titled “Identifying Bear Market Bottoms & New Bull Markets” (  download) This concept measured market breadth, namely daily advancing stocks as a % of advancing and declining stocks as well as points gained as a % of points gained and lost. The research […]

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Valuing Bitcoin using US$ Index

Of the dozen indicators and metrics we have researched, the fortunes of the US Trade-Weighted U.S Dollar Index (TWDI) has the biggest impact on Bitcoin USD prices. When the TWDI depreciates, this boosts Bitcoin prices strongly. When the TWDI becomes stronger, Bitcoin prices face significant headwinds.  The TWDI is a weekly index created by the U.S Federal […]

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Trendex Market Timing/Risk Management

1. Introduction The Trendex indicators are a suite of proprietary short, medium and long term market timing trailing stops with accompanying market peak & bottom probabilities to allow market participants to minimize as well as assess risk or opportunity for nine of the most popular U.S ETF’s commonly used in diversified portfolios. The Trendex indicators […]

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Relationship between stocks & FED balance sheet

The chart below shows the size of securities held outright by the US Federal Reserve versus Wilshire Total market index as stock market proxy. We see the various quantitative easing programs that propelled the stock market higher including the massive Covid19 liquidity injection that set stocks on a never-before-seen trajectory On the surface it appears […]

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High-Frequency U.S. Economic Data Shows 3-Speed Recovery

Since the onset of Covid-19, there has been a lot of research (and release) of alternative (non traditional) high-frequency data to measure the extent of the economic collapse brought on by coronavirus lockdowns, as well as to measure the post-lockdown economic recovery. Think of Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Apple (NASDAQ:AAPL) and SafeGraph geolocation data to track movement of people around […]

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Quantifying market valuation risk – PART 3

In PART-1 we looked at how we used the RecessionALERT Valuation Index (RAVI) to determine 10-year ahead forecasts on the SP500 Total Return Index (TRI) with a better than 0.89 correlation, and how we managed to derive 5,3 and 2 year ahead SP500 forecasts with correlations of 0.8, 0.68 and 0.55 respectively. In PART-2 we examined three […]

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Detecting SP500 BUY-THE-DIP signals

In our prior research note “Detecting tops of rapid SP500 advances” we introduced a multi-factor model (BIGTOP, available now in the Dashboard) for signaling advance warning of major (infrequent) intra-bull SP500 stock market tops. Whilst not a precise actionable signaling tool, BIGTOP appears very good at warning you of when risks of major market tops […]

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Detecting tops of rapid SP500 advances

Since the bull market that commenced in 2009 there have been around 10 major rapid advances in the SP-500 that ended in not-insignificant market tops. In our ZOOM calls with clients over the last year, a lot of interest has been expressed in how to detect for preemptive warning signs of these major tops. By […]

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A new coronavirus wave is starting in USA

One of the most accurate and reliable leading indicators we have discovered for the U.S daily new Coronavirus infections curve is the percentage of 52 US states that have an increasing or decreasing rate of new daily infections being reported. This indicator tops out before the national US infection tally and likewise bottoms before the […]

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Launch of Institutional Crypto Advisory

After hundreds of client Zoom consultations over the last 6 months, the request for a fundamentally-driven macro-risk model for cryptocurrency (specifically Bitcoin), similar to the ones we provide for the US economy and SP500, was one of the many topics topics among just under 49% of the calls. The request was highest among high net-worth […]

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Quantifying market valuation risk – PART 2

In PART-1 we looked at how we used the RAVI to determine 10-year ahead forecasts on the SP500 Total Return Index with a better than 0.89 correlation, and how we managed to derive 5,3 and 2 year ahead SP500 forecasts with correlations of 0.8, 0.68 and 0.55 respectively. In PART-2 we are going to focus […]

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Quantifying market valuation risk – PART 1

There are many metrics currently being touted that demonstrate the stock market is dangerously overvalued. Many respectable models are even forecasting double digit negative returns for the US stock market over the next 10 years. In this research note we  look at our RecessionALERT Valuation Index (RAVI) and how to interpret what it is currently […]

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Stage is set for stock market gains in November

The SP500 has put in a 7.4% peak-to-trough correction since 12 October. In the last 20 years, according to our SP500 probability model, corrections of more than this magnitude have occurred only 11.4% of the time, hinting at a 88.6% probability the worst is over. The SP500 has also put in lower weekly closes 3 […]

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A new, bigger U.S Coronavirus peak now likely

For a while, it seemed we had tamed the coronavirus epidemic in the US. But new daily cases are on the 3rd surge since the epidemic hit US shores: The U.S lags most of Europe’s ‘  countries by about 4-6 weeks on the coronavirus curve. When we saw the infections picking up in Europe after […]

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 IMPORTANT : IN ORDER TO SYNCHRONIZE WITH PUBLICATION EVERY 2ND AND 4TH WEEK OF A MONTH, THE NEXT SUPERINDEX REPORT DATED FRIDAY 9TH FEBRUARY WILL BE PUBLISHED ON MONDAY 12TH FEB 2024. THE REPORT AFTER THAT WILL BE MONDAY 26TH FEBRUARY, THEN MONDAY 11TH MARCH, THEN MONDAY 25TH MARCH THEN MONDAY 8 APRIL.