Courtesy of Doug Short.
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
The BCI at 175.7 is down from last week’s downward revised 176.1. The BCIg, the smoothed annualized growth of BCI, at 19.0 is unchanged from last week’s downward revised level. These downward revisions are attributed to the Census Board revised figures for ‘New One Family Houses Sold’, which is one of the input data series to BCI. However, BCI does not indicate a possible recession in the near future.
Figure 1 plots BCIp, BCI, BCIg and the S&P500 together with the thresholds (red lines) that need to be crossed to be able to call a recession. Figure 2 plots the history of BCI, BCIg, and the LOG(S&P500) since July 1967, i.e. the last 44 years which include seven recessions, each which the BCI managed to indicate timely.
The off-peak indicator BCIp is at 96.5, and at this level the BCIw graphic with the tracks to recession is not applicable.
Apart from the weekly Business Cycle Index, updates of a number of weekly and monthly financial macro models are also available on the website.
Anton Vrba and Georg Vrba
Anton Vrba is an electrical engineer. He pursued a career in R&D, manufacturing and construction project management. He developed the iMarketSignals’ proprietary Business Cycle Index (BCI) and the authors’ website. His other interests are mathematics and physics. He is a lateral thinker and has many ideas that challenge the established and accepted explanations.
Georg Vrba is a professional engineer who has been a consulting engineer for many years. In his opinion, mathematical models provide better guidance to market direction than financial “experts.” He has developed financial models for the stock market, the bond market, yield curve, gold, silver and recession prediction, all published in Advisor Perspectives. The models are updated weekly at http://imarketsignals.com/.