My Recession Indicator So Close To Signaling, Looks Inevitable!
With the coronavirus slowing down global economies, and now oil collapsing with treasury yields, there is an increasing chance that we could be entering a recession. This is my recession indicator. If you're a long time follower of mine, you're probably familiar with this chart. Here is the breakdown...
The pink line graph on the chart is the S&P500 , and I'm comparing that to two key moving averages on the Initial Claims chart. Each time there has been a clear crossover (with orange crossing above purple AFTER a consistent downtrend) it has corresponded to a top in the S&P before a recession. This happened in the year 2000 right before the dot com bubble, and then it happened again in 2007 at the exact top before the great recession. You can see that with the vertical dashed red trendlines .
This indicator also works for finding the END of a recession. You can see that the first crossover with orange crossing below purple has been the signal that previous recessions have ended. You can see that with the two vertical green dashed trendlines. The crossover signaling the end of the great recession was a bit delayed, but it would have proven to be an extremely powerful entry indicator over time.
Currently, we can see that the moving averages are right on top of each other, and while they haven't crossed yet, it looks inevitable at this point. We still need to actually see the crossover to confirm it, but we should get the recession signal in the next week. We can see that there was a major peak in the S&P 500 chart, and that seems to be corresponding to the beginning of a recession. I will keep you all posted on the development of this indicator.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
The pink line graph on the chart is the S&P500 , and I'm comparing that to two key moving averages on the Initial Claims chart. Each time there has been a clear crossover (with orange crossing above purple AFTER a consistent downtrend) it has corresponded to a top in the S&P before a recession. This happened in the year 2000 right before the dot com bubble, and then it happened again in 2007 at the exact top before the great recession. You can see that with the vertical dashed red trendlines .
This indicator also works for finding the END of a recession. You can see that the first crossover with orange crossing below purple has been the signal that previous recessions have ended. You can see that with the two vertical green dashed trendlines. The crossover signaling the end of the great recession was a bit delayed, but it would have proven to be an extremely powerful entry indicator over time.
Currently, we can see that the moving averages are right on top of each other, and while they haven't crossed yet, it looks inevitable at this point. We still need to actually see the crossover to confirm it, but we should get the recession signal in the next week. We can see that there was a major peak in the S&P 500 chart, and that seems to be corresponding to the beginning of a recession. I will keep you all posted on the development of this indicator.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-