Recession Indicator Triggered on Unemployment Up Tick
$DIA, $SPY, $QQQ, $VXX
September’s jobs report contained a sign that investors should be on alert for Recession in the US, and that means a stock market correction
1 of the Top 3 necessary Recession indicators is when the unemployment rate breaches its 12-Month MA.
September NFPs (non-farm payrolls) report showed that the unemployment rate in the US ticked up to 5%, while the 12-Month MA held steady at 4.9%.
Over the past year, the trend in the unemployment rate has turned from improving to deteriorating.
“The bad news is it’s going to go above its 12-Month MA with a high likelihood in September,” something that puts us “on alert for a recession, bond guru Jeffery Gundlach said Friday
The good news, however, is that indicator has given false positives before, most recently near the end of Y 2010, and there is another metric that has much more predictive power, according to Mr. Gundlach.
We know we’re in big trouble once the Quarterly unemployment rate breaches its 3-year MA, something that does no look to be in the cards yet.
Friday, the major US stock market indexes finished at: DJIA -28.01 at 18240.49, NAS Comp -14.45 at 5292.40, S&P 500 -7.03 at 2153.74
Volume: Trade was heavy with about 929-M/shares exchanged on the NYSE
- Russell 2000: +9.9% YTD
- NAS Comp +6.2% YTD
- S&P 500: +5.7% YTD
- DJIA +4.9% YTD
|HeffX-LTN Analysis for DIA:||Overall||Short||Intermediate||Long|
|Neutral (-0.16)||Neutral (-0.06)||Bearish (-0.29)||Neutral (-0.14)|
|HeffX-LTN Analysis for SPY:||Overall||Short||Intermediate||Long|
|Bearish (-0.25)||Bearish (-0.45)||Bearish (-0.33)||Neutral (0.03)|
|HeffX-LTN Analysis for QQQ:||Overall||Short||Intermediate||Long|
|Neutral (0.19)||Neutral (-0.09)||Bullish (0.33)||Bullish (0.33)|
|HeffX-LTN Analysis for VXX:||Overall||Short||Intermediate||Long|
|Bearish (-0.32)||Bearish (-0.38)||Bearish (-0.33)||Bearish (-0.25)|
Have a terrific weekend.
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