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MARKETS: Gauging internal health of the S&P500

By RecessionALERT on August 21, 2026 in Reflections

The reading now? Promising solid BULL but VULNERABLE to short-term pullback. Watch those first 2 panes – they are weakening and that’s the pullback warning. Panes below show FINANCIALS, INDUSTRIALS, CONSUMER, UTILITIES and REAL ESTATE have rolled over (XOA counts < 3) and eventually may overwhelm the TECH drive. But the MACRO NNHI (net new hi) COUNT is firmly in the longer term bull camp. His reading is that pullbacks are a buying opportunity for now.

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Stresses are building up in the system

By RecessionALERT on February 18, 2015 in Reflections

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: The average value of the composite, which begins in 1973, is designed to be zero. Thus, zero is viewed as representing normal financial market conditions. […]

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IMPORTANT DISCLAIMERS: Although many of our models rely heavily on back-testing, optimisation and probability methods, please note that past performance is NO GUARANTEE for future returns. No system devised by man can predict the future, let alone the future of the markets and economies. What we have are sets of mathematical models that use historical data and varying theories to pinpoint places in time when the STATISTICAL LIKELYHOOD of calling the start and end to recessions is the greatest. In the midst of all the best mathematical models, you can have geo-political events, wars, terrorist attacks, natural disasters and even nuclear accidents that tip everything upside down. This is always a risk factor you need to factor in on any recession call no matter how confident you are in a signal. The SuperIndexes are created through mathematical and statistical optimisation techniques that best fit the historical NBER data. There is no guarantee that out-of-sample performance will match that of prior in-sample performance.