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 […]
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.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 NOTE : Subsequent to this research note, we also launched an SP-500 Probability Model that measured probability of market tops (peaks). The MARKET-TOP probability model uses the inverse logic of the MARKET-BOTTOM probability model discussed in this research note. In other words, we look at low volatility instead of high volatility from the VIX […]
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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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