About Dwaine Van Vuuren

Dwaine has a Bachelor of Science honors degree 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 | Dwaine Van Vuuren

Are trade war concerns valid?

It appears U.S investors’ concerns with global trade wars are dominating U.S stock market direction for the last two years: This is with valid reason, as prior research of ours (Global Economy affects U.S stock market returns) has pointed out that whilst a global recession does not necessarily result in a U.S recession, it can […]

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New Probability Models

Following on from extensive client feedback since the launch of the SP-500 trough probabilities and SP-500 Trendex trend-following model, we have decided to target the models at the six largest investable U.S Exchange Traded Fund (ETF) categories by assets under management (AUM) as depicted below, for a total of 50.1% coverage of the total U.S […]

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About the new TRENDEX SP-500 model

There have been numerous queries about the new TRENDEX chart in the PRO Charts section. This model supersedes the Demark and the Demark+ trend counting models as it is a far superior methodology focusing on support and resistance levels as opposed to closes 4 days ago and moving averages. The methodology was a by-product of […]

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SP-500 Probability Model (SPM) V1.0

Introduction The SP-500 Probability Model (SPM) is a quantitative model that attempts to measure implied unconditional probabilities that a market correction is over. In order to derive the probability that we have seen the worst of the current correction, the model examines six (6)  loosely-correlated characteristics of SP-500 corrections going back to 1995, namely: (1). […]

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Yield Curve inversion suggests mild recession

There has been acute interest in the inversions currently taking place on the term-spreads around the world: And this comes as no surprise, since more than half of the world’s sovereign yield curves have now inverted… Right now, 70% of the U.S yield-curve cluster comprising the 10/5/3/2/1 year bond yields are inverted as shown below. […]

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We likely avoided a full yield-curve inversion

In our early June post “Is the U.S Yield Curve Inversion locked in?” we mused that only portions of the term-spread complex had inverted and most likely would remain that way, allowing us to avoid a full scale term-spread inversion. As the chart below shows, this is indeed the case – with only 50% of […]

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Google Search Trends as Recession Forecasting Tool

With the emergence of Google as the dominant internet search engine, its search-term usage can provide a real-time view of current public interests in numerous issues such as economics, politics, health and so forth. Thus, if large groups of people are entering certain economically-linked search terms, this could provide a clue about the general public’s […]

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Global Economy affects U.S stock market returns

The global economy is currently in the depths of a synchronized global business-cycle contraction, first highlighted by us in June 2018. In March 2019 we followed up with Global Economic Activity slowing at the fastest pace since 2011. The chart below highlights the Global Leading Economic Indicator together with the percentage of countries tracked that […]

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Adjusting Fed Funds Rate for QE to predict rate cycle direction changes

The Federal Reserve Funds Rate (Fed Funds Rate) is the interest rate that banks charge other banks for lending them money from their reserve balances on an overnight basis. By law, banks must maintain a reserve equal to a certain percentage of their deposits in an account at a Federal Reserve bank. Any money in their […]

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Is the U.S Yield Curve Inversion locked in?

In our February 2019 commentary we forecast that the 10’s and 1’s yield-curve would invert in May. The data below is taken from that market commentary, with a warning that the indicated dates of recession have a very wide standard deviation over the historical record: The 10’s and 1’s term spread has been inverted since […]

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The improved, de-trended Composite Market Health Index (CMHI)

One of our oldest and most consulted indicators by our institutional clients is the Composite Market Health Index (CMHI – see research paper ). By de-trending this index around its long-term regression mean we can obtain far earlier bear-market warnings and signalling for the U.S stock markets. You can see this index updated every day […]

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Impact of monetary policy & yield curve on future volatility

This research note investigates the relationship between the yield curve (US 10-year less US 1-year constant-maturity treasury spread) and the Federal Funds Rate (monetary policy) on the future readings of the CBOE VIX index. The 10’s vs. 1’s yield-curve and U.S recessions in the post-war era are displayed below, where it is clear that the […]

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Unemployment is worse than it looks

The U.S civilian unemployment rate reached new lows of 3.6% in April – numbers last seen 51 years ago in 1968: There are a number of ways to use the national unemployment rate to signal recession, but almost all of them are co-incident to slightly lagging in the warning they provide. We have the most […]

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What are odds of a SP500 reversal?

The SP-500 has corrected 4.35% from its recent high achieved a couple of days after our repeated warnings of high correction risks. The question that naturally comes to mind now, as we embark on this corrective phase, is what the odds of the worst being over are. We have been working on a statistical model […]

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A new U.S Residential Housing Index

According to many market watchers, there is no better barometer on the health of the U.S. economy than residential housing. It’s an industry that encompasses many vital sectors of the economy such as banking, manufacturing, commodities, construction, durable goods, international trade, transportation and, of course, consumer spending. So it’s not surprising the Federal Reserve closely […]

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Global Growth Roundup – 4Q2018

NOTE : The following charts are extracts from our monthly Global Economy Report available with a standard subscription. Global Economic Activity slowing at the fastest pace since 2011 The cumulative GDP growth for the 4 quarters of 2018 for all 41 major countries covered by the OECD display a stark contrast between the best and […]

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U.S Stock Market Valuations continue to warn

We have updated the RecessionALERT Valuation Index (RAVI) forecast models for the SP500 using 4Q2018 data. Stock market valuations continue to pose a “clear and present danger” to positive economic and SP500 returns outcomes, and have worsened since our last warning . One and two year SP500 forecasts continue to offer relatively accurate short-run estimates […]

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Yield curve inversion forecast update – Feb ’19

Based on the methodology discussed here we hereby update our U.S Yield-curve inversion forecast and subsequent recession and stock market peak forecasts. All the forecast dates have moved foward by 1 month as the yield curve continues to print below its regression mean: As a matter of interest, 60% of all 10 possible term-spreads have […]

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World in depths of business cycle slowdown

On 8th June 2018 we penned a warning that the worlds’ major 41 economies, as tracked by the OECD, were headed for a synchronized business cycle slowdown. You can read the article here : World headed for cyclical slowdown. Indeed, as you can see below, for quite a few months shortly afterward, we bottomed out […]

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WLEI updated and some news

The U.S Weekly Leading Economic Index (WLEI) as at 01 Feb 2019 has been updated to our front page together with historical vintages file. Here is a snapshot of the last few vintages: We seem to be revising down each week but the overall shape of the WLEI still hints at an index attempting to […]

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