This is a cross factor comparison between the S&P500 and the Civilian Unemplyment Rate. The latter can be used as a benchmark to anticipate the long term cyclical behavior of SPX within its market cycles.
The conclusion is quite obvious. when the unemployment rate is low, a sell signal arises on SP500. When then unemployment rate is high, the index waves a buy flag. We are currently on a low unemployment/ sell signal cyclical phase.
@dRends35, You are welcome! Sometimes we focus too much into analytical trading and ignore the basic macroeconomic foundation.
nabullion
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This is what I'm seeing as well.
Loonics_Trading
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This is Genius from yours! Well done! Economically, that could be interpreted as they cannot satisfy and keeping the production! (Y - Y*) Y is the real outcome and Y* is the anticipated or potential outcome! These cycles illustrate very well the peak and the hollow while situation of deviate productivity. Brillant!!!
TradingShot
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@franckbelfort, Thank you very much! Indeed it is a very clear indicator of the peak and the hollow!
alfiezz
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Great article. what's the reason lead to low unemployment rate trigger a economic circle change? thank you,
UnknownUnicorn1038536
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@alfiezz, the reason is that it isn't a trigger. It's part of the business cycle.
TradingShot
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@hirounsung, In a few words, yes that's what it is. It is just a business cycle. Repeating itself over and over again. And whoever is watching can decide when to invest and when not to.
avka81
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Nice one, I was trying to explain to my client today, how lowest unemployment rate marks the top in the Stock Market. Now I can show them your chart. Thanks