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

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 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 methods […]

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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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Coronavirus Recession likely ended in June

In this exercise, we examine the current behavior of various of our US leading economic indexes to past history to determine a likely recession exit date. The charts we display below are automatically displayed (depending on your selections) in the monthly data file Analysis Tool that is published for PRO subscribers, and can be found […]

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Summary of Service Additions & Improvements

We wish to highlight the following recent additions and improvements since April 2019, to our subscriber deliverables, as well as highlight some older features you may not be aware of. 1.Alerts archive Many subscribers do not know that you can access a multi-year chronological archive of end-of-day alerts from the REPORTS>ALERTS tab. 2. Stock Market […]

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US Economic Recovery update

NOTE : All the charts displayed below are updated daily/weekly and available for subscribers from the various chart menus. Since the peak daily infection rate of over 75,000 achieved on 17 July 2020, daily infections fell consistently to a trough of just over 20,000 on 8 September 2020. During this period, US national economic mobility […]

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Post-Covid19 Economic Recovery Tracker

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, Apple and SafeGraph geolocation data to track movement of people […]

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Global Business Mobility remains in decline

Global Business Mobility, defined as GDP-weighted Google geolocation data of workplace less residential mobility for the 24 largest economies in the world, representing over two-thirds of global GDP, remains in decline despite a recent uptick: When excluding USA from the data, the situation appears even worse, as depicted by the second chart above showing steeper […]

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Global V-shaped recovery stopped in its tracks

The US State and G8 Mobility Charts have just been updated in the Covid menu. The U.S has seen a whopping increase in infections across a broad swathe of states since emerging from lockdown : As a result, US and state economic mobility has taken a huge hit. Although the US is only about 49% […]

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Headwinds increasing for the stock market

NOTE : All images and charts displayed below are regularly updated and available to subscribers from the CHARTS menu. The SP-500 has enjoyed an incredible 40% rally since the 23 March lows. This was mostly fueled by an unprecedented FED stimulus program, which is now coming to an end within the next few weeks: Unless […]

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US enters 2nd wave of Covid19 infections

Note : Most charts shown below are available to subscribers in the COVID19 analytics section. Summary Economic mobility in US increasing at a slower pace than Covid-19 infections, contrary to rest of G7. At a state level, New York, New Jersey, Massachusetts & Michigan are leading economic mobility recovery vs infections. US has moved from […]

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NBER declares 2020 recession dates

The National Bureau for Economic Research (NBER) has announced official start dates for the 2020 US recession. It is very rare for such quick pronouncements (they are normally made 9-12 months after the fact) but the fact that 90% of the economy came to a sudden halt, has led to such deep declines in their […]

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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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