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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Phil's Favorites

Utilities are starting to invest in big batteries instead of building new power plants

 

Utilities are starting to invest in big batteries instead of building new power plants

This is what a 5-megawatt, lithium-ion energy storage system looks like. Pacific Northwest National Laboratory

Coutesy of Jeremiah Johnson, North Carolina State University and Joseph F. DeCarolis, North Carolina State University

Due to their decreasing costs, ...



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Zero Hedge

Elon Musk Takes Out $50 Million in New Loans, Mortgaging Five Homes

Courtesy of Zero Hedge

We were one of the very first to speculate that Elon Musk had mortgaged 5 of his homes in late January, when we highlighted research by an internet sleuth on Musk's personal financial situation. According to public records cited by Tesla skeptic EVent Horizon and laid out in a timeline on Sutori in late January, Elon Musk looked as though he had leveraged some of his personal real estate.

A follow up report from Bloomberg ha...



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ValueWalk

KHC To Be Bought Out By Berkshire: Here Is Why Its A Possibility

By Jacob Wolinsky. Originally published at ValueWalk.

Whitney Tilson’s email to investors discussing buyer beware of consumer staples sellers; Stamps.com Inc. (NASDAQ:STMP) and The Kraft Heinz Company (NASDAQ:KHC) blowups; Will Buffett buy KHC?; Is the #3G model flawed?; Asia Wealth Summit; Theranos.

I’m sending out today’s email early because there’s so much juicy/timely stuff…

Q4 hedge fund letters, conference, scoops etc...



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Kimble Charting Solutions

Giant Topping Pattern Could Be Forming, Says Joe Friday

Courtesy of Chris Kimble.

The first fact of the day; The long-term trend for tech remains up and the decline into the lows on Christmas Eve DID NOT break this trend!

This chart looks at NDX 100 ETF (QQQ) on a weekly basis over the past 14-years. For the past decade, since the lows in late 2009, QQQ has remained inside of rising channel (1). As you can see the decline into the end of the year lows, did nothing more than test support, which held and a strong rally has followed!

Over the past few months, QQQ could be forming a “Head & Shoulders&...



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Insider Scoop

Salesforce.com's Q4 Report Should Trigger Higher Valuation, Says Bullish Oppenheimer

Courtesy of Benzinga.

Related CRM Oppenheimer Praises HubSpot's Execution, Downgrades On Valuation Benzinga's Top Upgrade...

http://www.insidercow.com/ more from Insider

Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Thursday, 02 August 2018, 07:48:20 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: $600 BN interest payments for US gov, print baby print



Date Found: Sunday, 05 August 2018, 09:22:26 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: Hire FED interest rates always brings double trouble



Date Found: Monday, 06 August ...

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Digital Currencies

Cryptos Are Surging: Bitcoin, Ethereum Hit One-Month Highs As Institutions Dip Toes

Courtesy of Zero Hedge

Cryptocurrencies are surging while the US equity markets take the day off. Ethereum is up over 18% from Friday's 'close' and the rest of the crypto space is a sea of green. While no immediate catalyst (headline or technical level) is clear, increasing chatter over institutional investors dipping their toes in the space have prompted an extension of the positive trend.

A sea of green...

Source: Coin360

Ethereum is leading the charge follow...



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Biotech

Cancer: new DNA sequencing technique analyses tumours cell by cell to fight disease

Reminder: We are available to chat with Members, comments are found below each post.

 

Cancer: new DNA sequencing technique analyses tumours cell by cell to fight disease

Illustration of acute lymphoblastic leukaemia, showing lymphoblasts in blood. Kateryna Kon/Shutterstock

Courtesy of Alba Rodriguez-Meira, University of Oxford and Adam Mead, University of Oxford

...

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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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