SPY-UI model update for April 2017

The unemployment report was released on Friday, April 9 2017. Here is the update for the SPY-UI model. There is so much noise out there on this report that its important to just ignore the noise and focus on the trend.

Note: you don’t need fancy paid tools to track this model. You can use easy free tools like Stockcharts.com for example. I’ll do that below.

Most ink on these reports is spilled over the headline total non-farm payrolls number. This is a very noisy number with a margin for error of about 100K jobs. It’s much better to focus on the unemployment rate which is less noisy and tends to trend. Which is what we want. The unemployment rate for March was reported at 4.5% down from the previous month. Here is a chart of the UER vs its 12 month SMA.

That’s all we need for the SPY-UI model this month. As long as the UER is below it’s 12 month SMA there is no further analysis or action necessary.

But just for kicks we’ll look at the SPY vs it’s 200 day (or 10 month) SMA. The chart below is a monthly chart of the SPY and its 10 month SMA (weekly or monthly charts help hide much of the noise). The trend is still up. The 10 month SMA is about 5.4% below the closing price on Friday. I also drew a cross hairs on when the real breakout in stocks took place last year. It wasn’t on the election as most people seem to think. I took place in July 2016.

That’s it for this month. SPY-UI is still fully invested in SPY. Next jobs report is the first Friday in May, which is May 2nd. No potential changes to the model until then.

Full Disclaimer - Nothing on this site should ever be considered advice, research or the invitation to buy or sell securities. These are my personal opinions only.