Almost six years after COVID-19 upended the global economy, a striking pattern has emerged: the world has split into distinct recovery tracks. While India sustained 5.8% annual growth and China posted 4.9%, Germany’s economy has barely budged—growing just 0.03% annually since the fourth quarter of 2019. Finland, once a beacon of Nordic prosperity, has flatlined entirely. An analysis of cumulative real GDP growth across 41 major economies reveals more than just winners and losers. It exposes fundamental shifts in the […]

Unprecedented divergence between U.S forward and coincident data raises questions about post-pandemic indicator reliability Research Analysis PREVIEW | RecessionAlert.com | December 2025 About This Analysis: RecessionAlert.com has been tracking the divergence between U.S. leading and coincident indicators since late 2021. Throughout this period, we consistently advised clients to weigh U.S. Leading Economic Index weakness against several countervailing signals: resilient U.S. coincident data, global trade metrics, the percentage of OECD countries with rising LEIs, the percentage global Reserve Banks easing interest […]

1.INTRODUCTION Since stock markets began, investors have sought to identify the exact moment a bear market ends and a new multi-year bull market begins. If investors could determine this with high certainty—avoiding both false positives (premature signals) and false negatives (missed signals)—they could deploy capital at the bull market’s earliest stages and maximize returns. This timing matters because up to 50% of a bull market’s gains occur in the initial rebound phase. At RecessionALERT, we’ve provided timely buy-the-dip signals to […]

0.Change log 26 Sept 2024 : New Section-13 added to include “Job Losers” Sahm version. New Section-14 added “Performance summary” 28 Aug 2024  : New Section-6 added to include “Cycle Low” Sahm version.  1.Introduction In macroeconomics, the Sahm rule, or Sahm rule recession indicator, is a heuristic measure by the United States’ Federal Reserve for determining when an economy has entered a recession. It is useful in real-time evaluation of the business cycle and relies on monthly unemployment data from […]

For many years now, we have provided multifactor trough/peak probability models for subscribers for SP500, QQQ (Nasdaq-100), GLD (Gold), IWM (small-caps), BTC (Bitcoin), AGG (Bond market), VTI (Total market), EFA (Developed markets ex U.S & Canada), EEM (Emerging markets) and IJH (mid-caps). You can read about their methodology in this research note. Running and using these models in live market environments, and feedback from clients, has allowed us to develop a 2nd generation of these models. Although they only currently […]

Introduction The 10-year Treasury note is a debt obligation issued by the United States government with a maturity of 10 years upon initial issuance. A 10-year Treasury note pays interest at a fixed rate once every six months and pays the face value to the holder at maturity. The 10-year Treasury yield is the current rate Treasury notes would pay investors if they bought them today. The U.S. government partially funds itself by issuing 10-year Treasury notes. The U.S. Treasury […]

Since we originally designed and built the Weekly SuperIndex recession model, we have created fourteen other quantitative recession models for clients over the last decade. These range from broad-based short, medium, and long-term composite leading & coincident economic indicators to composites focused on Housing, Labor, Gross Domestic Product & Income and Valuations. Each of these fifteen diversified recession models are combined into a Diffusion representing how many of them are in their respective recession territories, to form the Recession Forecasting […]

On 26th February 2002, Paul F. Desmond from Lowry’s Research published a seminal paper titled “Identifying Bear Market Bottoms & New Bull Markets” (  download) This concept measured market breadth, namely daily advancing stocks as a % of advancing and declining stocks as well as points gained as a % of points gained and lost. The research posited that during significant market declines, panic would manifest itself as one or more days when declining stocks exceeded advancing stocks by more than 9-to-1 […]

Of the dozen indicators and metrics we have researched, the fortunes of the US Trade-Weighted U.S Dollar Index (TWDI) has the biggest impact on Bitcoin USD prices. When the TWDI depreciates, this boosts Bitcoin prices strongly. When the TWDI becomes stronger, Bitcoin prices face significant headwinds.  The TWDI is a weekly index created by the U.S Federal Reserve to measure value of the U.S. dollar, based on its competitiveness versus U.S trading partners. The index gives importance to currencies most widely used in […]

1. Introduction The Trendex indicators are a suite of proprietary short, medium and long term market timing trailing stops with accompanying market peak & bottom probabilities to allow market participants to minimize as well as assess risk or opportunity for nine of the most popular U.S ETF’s commonly used in diversified portfolios. The Trendex indicators consist of the following components: A set of short, medium and longer-term trailing stops for both longs (uptrends) and shorts (downtrends) Corresponding probabilities of a […]

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 (TRI) 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 to derive 1-year ahead forecasts for the Sp500 with correlations (r-squares) of 0.27, 0.34 and 0.43 respectively. In PART-3 we use the data from […]

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 are high, allowing you to mitigate downside risk. If you recall, we opined that experience has shown us that detecting market tops is far harder […]

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 pre-emptive we mean warnings that are issued before any significant declines set in. A problem with many traditional technical SELL models is that conditions or […]

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 solely on how we derive 1-year ahead forecasts for the Sp500. 2. Deriving 1-year SP-500 forecasts Using the RAVI index regressed to 1-year ahead SP500 […]

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 saying about stock market valuations. The RecessionALERT Valuation Index (RAVI) examines 10-year cyclically adjusted trailing SP-500 earnings, the SP-500 index level, total stock market capitalization, […]

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 around workplaces and residential places, foot and transit traffic data, hotel occupancy, movie ticket sales (BoxOfficeMojo), TSA traveller throughput, seated diners (OpenTable) and so forth. […]

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 of recession warning, it faced the problem of only assessing the current level of the USMLEI and how often in the past this level was […]

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 clockwise. Note that gauges are very one-dimensional and don’t depict trend so for better understanding of the readings you are encouraged to view the actual […]

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 bi-annual cycle consists of two phases of 12 months each which comprise the historical statistical record of 32 cycles. The tri-annual cycle consists of three […]