Monthly Update – June 1, 2018


Fig-8.-6-1-2018The unemployment rate recession model (article link), has been updated with the May UER of 3.8%. Based on the historic patterns of the unemployment rate indicators prior to recessions one can reasonably conclude that the U.S. economy is not likely to go into recession anytime soon. The growth rate UERg is at minus 12.2% (last month minus 10.76%) and EMA spread of the UER is at minus 0.28% (last month minus 0.2.3%).

Here is the link to the full update.

The Dynamic Linearly Detrended Enhanced Aggregate Spread:

DAGS-6-1-2018The updated level of this indicator, -147bps, above last months -143bps, confirms the January 20, 2017 signal. Based on past history a recession could have started at the earliest in October 2017, but not later than May 2019. The average lead time to previous recessions provided by DAGS was 15 months which would indicate a recession start for April 2018. (Note: All our other recession indicators are far from signal a recession.)


Coppock Indicator for the S&P500

Fig-9.-6-1-2018The Coppock indicator for the S&P500 entered the market end May 2017 and generated a new buy signal in mid February 2018 This model is in stocks.   This indicator is described here.




Fig.9a-6-1-2018Fig 9a depicts the CAPE-Cycle-ID and the year-on-year rate-of-change of the Shiller CAPE.  A model using this indicator invests in the market when the Cycle-ID is +2 or 0, and when the Cycle-ID equals -2 the model is in cash. This indicator is described here.



Trade Weighted USD

USD-6-1-2018 The Trade Weighted $ value is strengthening.



TIAA Real Estate Account

Fig-10.-6-1-2018The  1-year rolling return for the end of last month is 4.81%.   A sell signal is not imminent.

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