Market Update 17/10/13 [PUBLIC]

The political standoff associated with the debt ceiling and government shutdown has made its impact felt the last 3 weeks on the weekly leading data. Two out of the 5 main components of the WLInr are now firmly planted in recession warning territory with some 30% of all underlying 50 weekly time series also camped there:

With the government shutdown now over we hope to restore full reporting service next week as the data starts coming through.

We had our inaugural official Selling Pressure Trough Reversal BUY signal on Thursday 10th last week, and the SP-500 is up 2% since which looks promising. Remember, the signal is fired when the Selling Pressure Diffusion rises above or touches 4 and then falls back below 4 again. You can see how nicely we caught the two troughs before this one, all of them one day after ground zero:

On the 10th we also witnessed a “Deep Trough” version of a SP-500 Great Trough Signal.

However The Zweig Breadth Thrust missed a signal by a hairs breadth with the yellow signal line putting in a low of 40.08, just 0.08 over the 40 threshold the algorithm seeks for an “arming latch.” For all intents and purposes this is probably a valid ZBT-B BUY signal and will probably even develop into a “valid” rare traditional Zweig Breadth Thrust (ZBT), but we are not showing the signals since they never properly met the strict latching criteria (a miss is a miss no matter how small, but thank goodness we have the Selling Pressure and Great Trough models as extra catching nets!)

Subscribers can see all these signal “live” (updated every 1 minute) in the CHARTS menu:

Click on the round blue “i” button on the top-right of each chart for its respective interpretation instructions and further details.

The STM Seasonal Timing Model is “on the bus” with the current SP-500 rally and will hold positions until at least 30 Dec 2013. Both November and December have 71% probability of positive outcomes with the  54 year historical gain/loss ratio of 2.4-to-1 for this particular November associated with a 1.85% average gain (not every month is the same every year, its a cyclical model.)

We will provide a reading for January 2014 in next weeks subscriber update to see if this is going to be a 3 month trade or possibly longer.

Don’t forget to have a look at the Weekly Sentiment Report published today.

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.