About RecessionALERT

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 | RecessionALERT

Some updates & market observations

The STM Seasonality Model is a unique composite that looks at average monthly gains, gain-to-loss ratios and percentage of winning months for 1,2,3 and 4 year cycles to arrive at a composite seasonality score for each month. For the last 18 months, the model has been running at 80% directional accuracy on calls on the […]

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SP-500 and Recessions

We examined SP-500 behavior in the lead to and during US recessions a few years ago in an old research note (Recession – Just how much warning is useful anyway?) to conclude that more than 5-months warning before a recession was not constructive, and that you should focus on recession warning models that stuck to […]

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COVID19 Recession Warning

Businesses are going to be shuttered in massive numbers as the U.S has to deal with the unavoidable nationwide lock-down that will be required to contain the highly contagious Coronavirus. From our Covid19 Dashboard we maintain for our subscribers, we can see that the number of cases is rising according to a quadratic equation that […]

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COVID-19 Global Pandemic is here

Further to our March 5th 2020 warning on a looming Coronavirus (COVID19)  global pandemic, the WHO has finally recognized as such and declared the outbreak an official global pandemic. It is not hard to see why, when one looks at the chart below: Whilst China has managed to stabilize new infections (assuming their numbers are […]

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COVID-19 starting to look like a global pandemic

The newly reported cases of Novel Coronavirus (COVID-19) in China appear to be tapering off, but it is the recent uptick of newly reported cases outside China that have reached alarming levels, resulting in total cases accelerating to just under 100,000: The secondary round of infections, most likely from travelers from China before the largest […]

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Massive rebound in US housing market

All 8 components of our comprehensive US Housing Market Index have posted solid and sustained gains in the last 6 months: Our detailed PDF report for Dec 2019 has been published to the REPORTS menu. According to many market watchers, there is no better barometer on the health of the U.S. economy than housing. It’s […]

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Recession Probability Enhancements

The RecessionALERT USMLEI (US Monthly Leading Economic Index) is a 21-factor monthly leading index for the US economy. It is described in detail in this research note. Up until now, we had deployed a standard Probit statistical model to track implied recession probabilities of the USMLEI. Whilst the Probit models still provide a reasonable lead-time […]

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We found some worrying signs in labor data

These days, its really hard to find worrying signs in US labor data. If one looks at the once famous Janet Yellen Labor Dashboard, apart from Job Openings, everything looks to be progressing fine, bar a small pullback here and there: Sure, the employment-to-population ratio (participation) has not come close to peak achieved in the […]

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The Market & Economic Dashboard

The Dashboard provides an all-in-one at-a-glance “pilots view” of all the important short-term market liquidity indicators and the long-term US macroeconomic situation. It consists of radial gauges where Green areas imply no danger (or bullish) and red areas denote danger zones (or bearish). Orange areas denote neutral (neither bullish nor bearish). The gauges all move […]

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Analyzing SP-500 Seasonal Trends

For this research, we examine annual, bi-annual, tri-annual and quadrennial cyclical seasonal characteristics of SP500 monthly closing prices since 1957 and show how to combine all these cycles into a single powerful seasonal indicator. The annual cycle consists of a single phase of 12 months which comprise the historical statistical record of 63 cycles. The […]

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U.S economy likely dodged a bullet

For two years, our comprehensive U.S monthly Leading Index (USMLEI) has been deteriorating, more recently to worrisome levels, with exactly half of the 23 components now in recession territory: What was really alarming was that this was occurring against the background of elevated RAVI local stock market valuations, an inverted yield curve, a deteriorating Global […]

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New intraday charts

Most of our breadth and liquidity indices are updated end-of-day with the exception of Great Trough Detector(GTR), Selling Pressure Diffusion (SPD) Zweig Breadth Thrust (ZBT) These 3 models above are updated every 15-min during the course of a trading day. PRO subscription clients will from now on also be able to see the following new […]

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New Economic Analytics tool

For many years now we have published a quarterly data file as described in this note. The old quarterly data file was extremely popular among institutions, particularly those that were using it for standard recession forecasting ensemble implementations or even custom ensembles to fit their investment approach. Also many clients were using the file as […]

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The Average Liquidity Index (ALIX)

The Average Liquidity Index (ALIX) has been published daily for our clients for over 5 years. This document serves as a brief overview. ALIX is the average of the medium-term liquidity index from the VMCOS chart (EMA(21) of VMCOS), the short-term liquidity index from the VMCOS chart (EMA(10) less EMA(21) of VMCOS) and the short-term […]

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McClellan Liquidity Indices

This is a complete short, medium and long-term stock market liquidity risk-management tool derived from the McClellan Oscillator methodology applied to daily advancing and declining volume on the SP-500. It has been depicted as a daily updated chart for standard subscriptions for over 7 years now. Each day, we compute daily advancing volume (sum of […]

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Dramatic change in yield curve

The RecessionALERT yield-curve aggregate and diffusion has just made a dramatic reversal, with the percentage of 10 term-spreads that are inverted dropping from 70% to 40%: The 10YR less the 2YR narrowly averted an inversion 8 weeks ago and the 10YR-5YR and 10YR-3YR never came close to inversion. If one looks at the latest history […]

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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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