Posts Tagged ‘Economic Cycle Research Institute’

ECRI WLI “Flattens Out” at -9.8% – ECRI says “Gage is Fine”

ECRI WLI "Flattens Out" at -9.8% – ECRI says "Gage is Fine"

Courtesy of Mish

Lakshman Achuthan and Anirvan Banerji, Co-founders, Economic Cycle Research Institute (ECRI), continue to pour out statements about the ECRI WLI that are worth taking a close look at, if not outright challenging them.

Please consider Know How to Read WLI.

Sir, “Out on a limb, the ECRI weekly leading indicator … suggests a double-dip recession is imminent,” according to James Mackintosh (The Short View, August 4). This is a popular misconception pushed by pessimistic pundits.

Let’s review what the Weekly Leading index (WLI) has done this year. After rising to a two-and-a-quarter-year high by end-April, it plunged for all of two months – before flattening out and finally edging up to a six-week high by end-July. That’s hardly a recession signal.

Imagine flying in an aircraft that hits a huge air pocket and plunges 5,000ft in 10 seconds. That would leave you quite shaken up, but it doesn’t mean the aircraft’s about to crash – unless it keeps falling. That’s pretty much what’s happened with the WLI. Unless it turns down again and then keeps falling, it wouldn’t make sense to predict an imminent recession.

Many self-proclaimed experts have been back-fitting our data, looking at the WLI the wrong way, and screaming that the end is near. This is like people saying they don’t remember an aircraft dropping so fast and not crashing, while blaming the instrument makers for not trusting their own altimeter. Well, we do trust it. Bottom line, the gauge is just fine – as long as you know how to read it.

When there really is danger of an imminent recession, it will be signalled by a cyclical downturn in the WLI itself rather than its growth rate. But that hasn’t happened yet.

ECRI WLI

click on chart for sharper image

When there is "danger" of an imminent recession by the ECRI’s calls, history suggests we will have been in a recession for months. Nonetheless, one must be careful of "reading" indicators, especially when no one knows for sure what the hell it even consists of.

Instead, I would like to point out that two weeks of flattening after an enormous plunge to -10.8 is hardly worth calling "flattening". Let’s see where the index goes from here before we talk about "flattening" after that unprecedented nosedive.…
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ECRI Falls Deeper into the Abyss

ECRI Falls Deeper into the Abyss

Courtesy of Bondsquawk 

The Economic Cycle Research Institute released its Weekly Leading Indices for the week ending July 23. While the Weekly Leading Index ticked up to 121.1 from a downward revised prior period reading of 120.6, the Weekly Growth Rate Index fell further by two-tenths of a percent to -10.7 percent.  This latest reading marks the 12th decline in a row and 8th straight week in negative territory, dating back to the first week in June.

For our new Bondsquawk readers, check out this to understand the significance of this leading economic indicator. 


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ECRI TURNS NEGATIVE

ECRI TURNS NEGATIVE

Courtesy of The Pragmatic Capitalist

Via Barrons:

The Economic Cycle Research Institute today offered up its view of last week’s “weekly leading indicators,” a closely watched private mailing, today showed a dip in the indicator for the week ended last Friday to 123.2, a decline of 3.5%, in contrast to the 0.3% rise the preceding week.

The Institute’s Lakshman Achuthan, however, remarked that “While the plunge in WLI growth to a one-year low assures a significant slowing in U.S. economic growth in the coming months, the recent weakness has not lasted long enough to signal a new recession threat.”

The ECRI notice follows better-than-expected consumer confidence data this morning from the University of Michigan, but also a smaller-than-expected gain in business inventories in April, this morning’s weak retail sales data for May and, of course, last Friday’s disappointing jobs number.

ECRI2 ECRI TURNS NEGATIVE 


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Get Ready for a Double Dip

Get Ready for a Double Dip

Courtesy of John Nyaradi’s Wall Street Sector Selector 

In my view, it’s becoming increasingly likely that we’re rapidly heading towards a double dip recession.  It won’t be tomorrow or this week or even next month, but many warning flags point towards significant deterioration in the U.S. and global economy going forward and so I think that by the end of the year or early 2011, we could very well be facing a new leg down in the world’s economic situation. 

We’ll take a look at some of the factors at work but first let’s take a look at the past week and where we stand at Wall Street Sector Selector. 

Looking at My Screens 

Obviously the volatility that has come back into the markets in recent weeks was in play last week as the Dow experienced its third worst drop of the year on Friday, fast on the heels of Wednesday’s rocket ride up. 

This week’s action took our Standard, 2X and Option Master Portfolios to 100% cash as we took profits and cut losses during the week. 

Currently our portfolios look like this year to date: 

Sector Selector Standard:                  +7.5%

Sector Selector 2X:                              -17.8%

Sector Selector Option Master:      +47.1% 

This week’s positions were closed for the following gains/losses: 

VXX:                    +50.3%

EFZ:                     +2.8%

YXI:                      -8.5%

PSQ:                    -5.3%

EEV:                    +5.9%

SKF:                    -12.9%

December S&P Put Option:   +29.7%   

We remain in the “Red Flag Flying” mode, expecting lower prices ahead.  However, almost incredibly, our indicators are moving towards a new “buy” signal that we might see confirmed within the next days or weeks. 

A quite likely scenario is a relief, short term rally through August-September, followed by further declines into 4th Quarter and next year. 

Whatever happens, we will continue working both the “long” and “short” side of this market that remains unbelievably volatile and challenging. 

The View from 35,000 Feet 

This week’s action was driven by conflicting forces but ended largely negative, with the S&P 500 unable to break through its 200 Day Moving Average.  As we’ve said before, this average is widely viewed as the demarcation line between bull and bear markets, and until or if the major indexes are able to sustain positive momentum above this line, we can consider that we are in a bear market, at least for the short term. 

The big catalyst for Friday’s sell off, of…
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We Face Extraordinary Danger and Extraordinary Opportunity

We Face Extraordinary Danger and Extraordinary Opportunity

Courtesy of John Nyaradi’s Wall Street Sector Selector 

Black Cat Looking at Goldfish in Bowl

As I look across the global landscape today, I see extraordinary danger and extraordinary opportunity. 

Danger comes from the deteriorating economic environment at home and abroad and extraordinary opportunity comes from the enormous volatility and opportunities to “short” the market followed by a once in a generation opportunity to “buy dollars for dimes” once a bottom to this market has been reached.

Over the next five years I believe we will see more bankruptcies, both individual and sovereign, than we’ve seen in our history and we’ll also see more millionaires and billionaires created than ever before.

As individuals we will each make one of two choices.  We can assume the “deer in the headlights” posture and stash our money under the mattress, or we can educate ourselves, take prudently managed risk and work to take advantage of the enormous opportunities that will present themselves. 

Looking at My Screens 

This week we saw enormous volatility in every asset class as global forces washed over the markets of the world and investors/traders tried to position themselves on the only side of the market that counts, “the right side.” 

The downtrend that started in April is still firmly in place, notwithstanding Thursday’s rally from oversold levels and we remain in the “Red Flag Flying” mode expecting lower prices ahead. 

Taking a look at the chart of the S&P 500 we see:

chart courtesy of StockCharts.com 

In the chart above, we can see that the S&P remains just below its 200 Day Moving Average which will provide significant resistance while the MACD remains on a sell signal but momentum is turning up.  Above the blue 50 Day Moving Average is rolling over and the 200 Day red line is flattening which is also a bearish indicator. 

So for the time being, at least, we remain in a bearish configuration, expecting lower prices ahead. 

By the way, if you share our view and expectations of lower prices, this week’s mega rally on Thursday presented some extraordinary buying opportunities on the “short” side with relatively low risk at the moment.  I’ll be describing these in detail to my subscribers in our Position/Stop Loss Update this weekend. 

Members note that this week’s Position/Stop Loss Update will be sent on Monday afternoon due to markets being…
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Kimble Charting Solutions

Doc Copper Suggesting Economic Growth Peaks Here?

Courtesy of Chris Kimble

The broader commodities market is enjoying a multi-month rally that has seen momentum carry over into early 2021.

One area of commodities that’s seen a big lift is the metals space. We hear a lot about gold and silver, but how about copper?

One look at today’s chart and it’s clear that Doc Copper is on fire.

The long-term “monthly” chart highlights Copper’s multi-month thrust higher. It also shows Copper futures prices hitting a significant band of triple resistance this month. Line (1) has been tested several tim...



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Phil's Favorites

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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Mapping The Market

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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Biotech/COVID-19

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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Zero Hedge

UC San Diego Installs COVID Test Kit Vending Machines 

Courtesy of ZeroHedge

With daily COVID-19 infections getting worse over the last couple of months in Southern California, one university has decided to introduce coronavirus testing vending machines, reported Reuters

Students at the University of California's San Diego campus were greeted with eleven vending machines over the winter semester packed with do-it-yourself COVID-19 tests. 

School officials told Reuters the vending machines are the first of their kind to be insta...



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Politics

The Confederate battle flag, which rioters flew inside the US Capitol, has long been a symbol of white insurrection

 

The Confederate battle flag, which rioters flew inside the US Capitol, has long been a symbol of white insurrection

A historic first: the Confederate battle flag inside the U.S. Capitol. Saul Loeb/AFP via Getty Images

Courtesy of Jordan Brasher, Columbus State University

Confederate soldiers never reached the Capitol during the Civil War. But the Confederate battle flag was flown by rioters in the U.S. Capitol building for the first time ever on Jan. 6.

The flag’s prominence in the Capitol riot comes a...



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ValueWalk

Can You Rid Yourself Of 2020's Financial Stress As We Head Into 2021?

By Jacob Wolinsky. Originally published at ValueWalk.

2020 has been a tough year for nearly everyone, and that may be especially true for retirees and those nearing retirement who suddenly are worried about whether their careful planning and years of saving could be upended by events beyond their control.

Q3 2020 hedge fund letters, conferences and more

After all, retirement is supposed to be a pleasurable and satisfying time when you kick back and enjoy the fruits of all those decades of labor. That’s difficult to do if you’re jittery about a volati...



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Chart School

Best Wyckoff Accumulation for 2020

Courtesy of Read the Ticker

Yes folks there has to be a winner. Price and volume in the right place. Very nice eye candy!


Introduction ...

Ethereum was posted on RTT Wyckoff Campaign blog for monitory and trade entry. To watch the RTT Wyckoff Campaign blog is part of the RTT Plus service. After all you only need one to two great accumulations in a year and returns will be fantastic.






Charts in the video ...


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PnF ...

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Digital Currencies

Bitcoin: why the price has exploded - and where it goes from here

 

Bitcoin: why the price has exploded – and where it goes from here

B is for blast-off (but also bubble). 3DJustincase

Courtesy of Andrew Urquhart, University of Reading

Bitcoin achieved a remarkable rise in 2020 in spite of many things that would normally make investors wary, including US-China tensions, Brexit and, of course, an international pandemic. From a year-low on the daily charts of US$4,748 (£3,490) in the middle of March as pandemic fears took hold, bitcoin rose to ju...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

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Feb. 26, 1pm EST

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Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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