The SP-500 today has met back with its 200-day moving average after spending a “protracted period” of 46 trading days below it. Contrary to popular belief, history since 1972 shows this to be a bearish event, with more downside likely. Many participants on the stock markets like to use the 200-day moving average (200dma) to […]
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.Yellen Labor Dashboard reaches target
“Full Employment” target reached Shortly after taking up office, Federal Reserve Chair Janet Yellen used her “jobs data dashboard” to justify the Fed’s easy money policies and to argue there’s still considerable slack in the labor market five years after the recession’s end. Seven of the nine gauges on this dashboard had not recovered to levels […]
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Global Slowdown – Does it affect the U.S?
There is no question that the Global Economy is languishing. Now, with weakness in US economic data starting to filter through, the big question that arises is if the U.S will be dragged down by the global economy. The U.S is a very insular economy and whilst there can be no doubt that global economic […]
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Things that go bump in the night
The U.S economy appears unstoppable right now. Just about every leading and co-incident indicator you can think of is pointing to positive growth. Among the hundreds of indicators we follow for our models on a daily basis, we have discovered a few that are displaying worrying trends and flagging a future recession. It should be pointed […]
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SP-500 Returns Forecast, 4Q2014
The RecessionALERT Valuation Index (RAVI) is a multifactor valuation model that examines cyclically adjusted trailing SP-500 earnings (various multi-decade horizons), the SP-500 total-return index level, total stock market capitalization, Gross Domestic Product, non-financial corporate equities and liabilities, non-financial corporate business net-worth and percentage of investors’ allocation to stocks versus cash and bonds to determine 10, […]
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Stresses are building up in the system
Despite a steady rise in the SP-500 Index, clear and persistent financial stresses are starting to build up in the system. We construct a composite of the St. Louis Fed Financial Stress Index, the Cleveland Financial Stress Index, the Kansas City Financial Stress Index and the Chicago Fed National Financial Conditions Index as shown below: […]
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Valuation estimate of SP500 2015 returns : 2,246 target
The RecessionALERT Valuation Index (RAVI) is a multifactor valuation model that examines cyclically adjusted trailing SP-500 earnings (various multi-decade horizons), the SP-500 total-return index level, total stock market capitalization, Gross Domestic Product, non-financial corporate equities and liabilities, non-financial corporate business net-worth and percentage of investors’ allocation to stocks versus cash and bonds to determine 10, 5, […]
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RecessionALERT Valuation Index (RAVI)
PART-1 There are currently 4 mainstream models used to forecast 10-year total returns on the SP-500 (dividends re-invested) The Shiller CAPE ratio (PE10) The Warren Buffet Indicator Tobin’s Q-Ratio Average Investor allocation to stocks The non-linear quarterly correlations between these four models (x-axes) and achieved 10-year future total returns (y-axes) on the SP-500 since 1970 are […]
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Valuations not at nose-bleed levels yet
The recent run in the major U.S stock indices has resulted in Shiller-PE charts being trotted out showing how far we are off the historical mean, implying a nasty pullback is in the works. The problem with a historical mean is that it is a single horizontal value on a chart that fails to take […]
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Fingerprints of a short-term market top
The SP-500 has rallied sharply since the 15th October bottom, recovering all her losses in a shorter time than it took to incur them. It was a very rare display of the opposite behavior to the norm where “the bull climbs the staircase and the bear comes down the elevator”, since in this case, the […]
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Great Trough Detector Improvements
You will notice a new layout for the Great Trough Detector (GTR) chart as shown below. The Signal Panel has been revised to be more intuitive and we have added a new count panel below that: 1. The Signal Panel The first task of this panel is to highlight your two main opportunities: Class-B : […]
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“Baby” correction belies verocity of breadth sell-off
The current stock market correction is diminutive in relative terms – hardly anything to sit up and take notice of. However an examination of underlying breadth deterioration reveals an astonishing plunge of the net new quarterly highs (the percentage of new quarterly highs less the percentage of new quarterly lows). This percentage has been languishing […]
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New improvements
We have introduced three new improvements to the web site to enhance the user-experience; 1.Progress Loader Some of our pages, particularly the CHARTS page, can take some time to load due to the amount of historical data we allow you to view in the charts. If web site usage is heavy and/or the internet is very […]
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DeMark analysis for SP-500
IMPORTANT NOTICE : Since 2020, we no longer display charts shown below as the Demark Setup methodology we discuss below has been replaced with a far superior Trendex methodology. You can read about our proprietary Trendex Multi-Stop & Probability methodology over here : Trendex Market Timing/Risk Management PREAMBLE A detailed 18-year analysis reveals that the DeMark Setup […]
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Liquidity Crunch warning finally materialised
Fifteen trading days after our Average Liquidity Index (ALI) issued a liquidity crunch warning, the SP-500 finally succumbed into a decent sized correction. The two short-term liquidity indexes, one of which is described in “The HI-LO Breadth Indexes for the SP-500” issued warning even sooner, as can be seen below: At a level of -2, […]
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SP-500 Liquidity Crunch Warning
Losses on the SP-500 on Friday 11th saw all our measures of breadth-liquidity fall into contraction, warning of a highly vulnerable market subject to further liquidity tightness and raised volatility. To many of my staff that actively trade the SP-500, this is treated as a bona fide correction warning. If you are scratching your heads […]
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The HiLo Breadth Indexes for SP-500
The HILO breadth index was developed by RecessionALERT for detecting short and medium-term SP-500 stock market peaks in advance. It deploys the following daily breadth data taken from the SP-500 index: New 13-week (quarterly) highs New 13-week (quarterly) lows New 52-week (annual) highs New 52-week (annual) lows The above data is then used to construct […]
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Yellen’s Labor Dashboard suggests tightening in 2016
Federal Reserve Chair Janet Yellen recently used her “jobs data dashboard” to justify the Fed’s easy money policies and to argue there’s still considerable slack in the labor market five years after the recession’s end. Seven of the nine gauges on this dashboard have not recovered to levels reached before the last recession, reinforcing her belief […]
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U.S future economic outlook improves
The RecessionALERT monthly U.S Leading Growth Index (USMLI) is an index that attempts to capture future (6-9 months) U.S economic growth. The index has been constructed since 1960, but this report only displays data from 2000 onwards to capture the last two recessions. The USMLI consist of 10 sub-components that are in turn constructed from over […]
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Once in a year opportunity
We have spend the better part of a decade in the search for the ultimate indicator for the stock markets. Whilst it became clear early on in this quest that no one indicator would work all the time and every time, there are a few that stand out from the rest. One of them is […]