Whether you realize it or not, we are on the cusp of the greatest financial crisis the modern world has ever known — and it all revolves around debt. Practically every nation in the world is in debt, but it's far worse than most people realize. You know that $22 trillion dollar US debt number that everyone always talks about? Well, that's only the government's...
This is one of the most fascinating charts that I have ever created. It is an incredibly accurate recession indicator, and it should not be ignored. Let's take a look.
This chart is a comparison of the initial jobless claims in the US, to the E-Mini S&P500 futures contract. Unemployment claims are in blue and the S&P500 is in pink. You can see that there are two...
This is not an original idea. I applied a fibonacci-level pitchfan to the ICSA chart and found that the ES1 adheres in some interesting ways to the ICSA fan levels. Also, I added a trendline along the ICSA's peaks and noticed that the ES1 chart is currently bouncing between the ICSA's upper trendline and it's upper .382 fib level.
I'm not throwing an analysis...
I posted this post in mid-2017. I am reposting as the debate has risen recently whether a recession is near or not. it might be handy in 2019.
Original Post:
Jobless claims figures have been a reliable indicator of recessions. By examining a historical chart that goes back to 1960s we see a similar pattern in the behavior of claims and recessions.
Every single...
Watch the cross here. Note the extremely close match to the overall stock market, and how this LEADS recessions. This data has a few small false signals going back to the 60's, but it has properly led every recession regardless of that fact. If you combine this signal with something simple like yield curve inversion, you would get one of the easiest and best...
We have yet to see confirmation, but initial unemployment claims are looking worrisome here, and we haven't even processed the big layoffs from some of the automotive manufacturers. There are some false breakouts or false concerns in here, so that's why you may want to wait until more sustained uptrend occurs, but when combined with other economic issues, this is...
This chart aims to delve into the probability of the next U.S. led recession beginning this year. Lets get started.
This chart takes the S&P 500 Index (America's main market index) in yellow and compares it to the Initial Jobless Claims Data (direct from the Federal Reserve) in grey. We also take two very standard moving averages of the Initial Jobless Claims...
Cross = very negative, and typically occurs during a fed rate cutting cycle. These often top-tick markets, and this has been a very reliable indicator across all the bull and bear markets for quite some time.
Note - I use ICSA because despite it being noisy, it's actually a cleaner data series when you just smooth it with a moving average (I use EMA). It's not...
Today's read (not accounted for in this chart) is starting to make this a bit worrying. ICSA rising again week over week, threatening to break momentum. ICSA is a noisy indicator, but if you simply add smoothing with a moving average calculation, it becomes a better version of the unemployment rate. I say it's better because it's not subject to data issues such as...
No MA cross included here, just an update on current Initial claims direction. We're still ticking upward more, haven't yet received confirmation, but starting to look like we'll get some momentum in the unemployment rate. Once that gets going, it's game over for the economy. We're getting more and more updates of corporate layoffs recently, but wait on data to...
Unemployment data is clearly one of if not the most important data sets when it comes to predicting a recession. With unemployment at very long term lows, when does this break, and what happens when it does? For me, I watch exponential moving average crossovers in unemployment data. Initial claims works if you smooth it out (it's a high frequency data series)....
Jobless claims indicator has been a reliable indicator of recessions. By examining a historical chart that goes back to 1960s we see a similar pattern in the behavior of claims and recessions.
Every single recession the U.S. encountered in the underlying period was preceded by a rise in jobless claims. The chart above draws the quarterly jobless claims. The...
On the chart is the 4-week average of jobless claims. Prior to the past three recessions in 2007, 2001 and 1991, the jobless claims average was near the current levels.
Cyclically, Jobless claims is probably much closer to rising then falling. As we approach the 7th year since exiting the last recession, the average of jobless claims is at the bottom of its range...
Jobless claims continue to trend down within relevant descending range.
Currently reached a cyclical low, last seen in 2000 and 2006.
Thus the short term unemployment indicator shows that on one hand, situation is improving, but on the other hand it will be difficult to trade lower - and a cyclical upturn in Jobless Claims could be in the cards.
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