Alright, let's talk recessions. For those who aren't familiar with this chart, it's a recession indicator that I put together a while back, that I like to follow as a baseline indication of recession in the economy. There are other indicators that I look at in addition to this, but this is my favorite.
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 two 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.
Looking at the current action on this chart, we can see that the two moving averages are practically touching right now. So, if we see a clear crossover, that will be an indication that a recession may be beginning. We are very close, and with the coronavirus impacting global economies as it spreads, it will be critical to watch for recession signals like this.
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.***
@N-Bluth, BTC will get crushed. No time to gamble during a pandemic
Libratus
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@N-Bluth, Just focus on the technical moves. Unlike Treasury bond and gold, BTC did not act like safe heaven asset his week.
Profit_Link
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I like the chart, but it is worth mentioning that these crosses meant little to nothing prior to 2000 and the tech bubble, in fact there was a cross in May 1995 and the Nasdaq went on to blistering new heights.
Profit_Link
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@Profit_Link, The red lines indicate false signals from this indicator, i.e. a "Bearish Cross" did not result in a meaningful pullback.
Again, the indicator has value, but it should serve a supplementary role in analysis.
lucky_human_foot
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Corona Virus FED bailout
Joe2slow
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interesting
venturetrade
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It's crossing and the Fed wants to pump its way through it. But here is how it will go down. No , banks will not be bailed out this time around. Period.
venturetrade
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@venturetrade, there are enough regional banks with low risk asset portfolios . the big banks and entire walls street can find other fools this time.