Monthly Update – February 1, 2018


Fig-8.-2-1-2019The unemployment rate recession model (article link), has been updated with the January UER of 4.0%. The model does not signal a recession, however if unemployment rises to 4.1% in the comming months a recession will be signaled.

Here is the link to the full update.

The Dynamic Linearly Detrended Enhanced Aggregate Spread:

DAGS-2-1-2019The updated level of this indicator, -218bps, above last months -229bps, 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.-2-1-2019The Coppock indicator for the S&P500 exited  the market on 1/29/2019 and is in cash.   This indicator is described here.




Fig-9a.-2-1-2019Fig 9a depicts the CAPE-Cycle-ID and the year-on-year rate-of-change of the Shiller CAPE;  the level moved from +2 to 0 end of Jan-2019. This indicator is described here.

To avoid the bear market, exit stocks when the spread between the 5-month and 25-month moving averages of S&P-real becomes negative and simultaneously the CAPE-Cycle-ID score is 0 or -2.  (read more)


Estimated  Forward 10-Year Returns

Fig-9.b-Forward-Returns-2-1-2019 The estimated forward 10‐year annualized real return are estimated at 6.3% with a
95% confidence interval : 4.9% to 7.7%



iM-GT Timer

Fig-10.-2-1-2019The iM-GT Timer, based on Google Search Trends volume switched to cash on 11/1/2018.  This indicator is described here.



Trade Weighted USD

USD-2-1-2019 The Trade Weighted $ value remains near its past value.




TIAA Real Estate Account

Fig-11.-2-1-2019The  1-year rolling return for the end of last month is 4.79%.   A sell signal is not imminent.

Read more …



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