Tag Archives: economy

Building an investing system with the top economic indicators

Update: I updated the charts and some of the performance results on March 28, 2017. I found and corrected an error in the performance calculations. Conclusions remain the same. It’s finally time to start turning all the economic indicator stuff I’ve been posting on into something useful for investors. In this post I’ll introduce the SPY-COMP indicator and how it works as tool for entering and exiting investments. The mechanics of the SPY-COMP system are similar to the SPY-UI system I’ve posted on previously. The only difference is that the new system uses a composite of the top 6 economic … Continue reading

Posted in Economic Indicators, Economy | Tagged , , , , , | 24 Comments

Mapping the top economic indicators – mar 2017

In today’s post we’ll update the top 6 economic indicators as of mid March 2017. Each of the 6 indicators is updated with February data. Last month’s update is here. For background on the top 6 see here. The table below shows the current heatmap for the top 6 indicators. Just like last month all of the indicators are green. Here’s a brief update on each. Unemployment rate – Feb was another strong month for employment. UER is back down to 4.7%. Below it’s 12 month SMA. No signs of weakness in this indicator. Real retail sales – Feb’s year … Continue reading

Posted in Economic Indicators, Economy | Tagged , , , , , | 4 Comments

SPY-UI indicator update for March 2017

On Friday, March 10, the unemployment rate (UER) for Feb 2017 was released by the BLS.  The UER improved to 4.7%. In this post I’ll update the SPY-UI indicator for March. I’ll also provide some new charts with historical data that will be useful in the future. The first thing we’ll look at is the latest UER with respect to its 12 month SMA. The chart below plots both of those along with the US recession boundaries and the SP500 monthly drawdowns. The chart goes back to 1948. For this month the UER at 4.7% is still below its 12 … Continue reading

Posted in Economic Indicators, Economy | Tagged , , , | 7 Comments

Mapping the pros: composite economic indicators – mar 2017

In my last post I introduced a heat map of the top individual economic indicators and how the heat maps are a very simple yet useful way at looking at the overall state of the economy. In this post I’ll do the same thing but this time with composite economic indicators. What is a composite economic indicator and how is it different than an individual indicator? Individual economic indicators typically provide information about one particular aspect of the economy, say housing, and consists of one data series or a composite of related sub-series. A composite economic indicator, as we’re using the term here, tries to … Continue reading

Posted in Economic Indicators, Economy | Tagged , , | 3 Comments

Mapping the top economic indicators – feb 2017

Now that we have a good set of top economic reads on the state of the economy and a list of the top 6 individual economic indicators, we can tackle using these indicators to get a gauge on where we are in the economic cycle. In this post we’ll present a simple heat map of the top 6 economic indicators, look at what the heat map looked like in previous recessionary periods, and finally compare it to what the heat map is saying today. This will become a regular monthly post, published on or just after the third Friday of … Continue reading

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The top 6 indicators on the state of the economy

A quick post on a new page I have added to the blog. In the top menu you will see a page called ‘Top 6 Economic Indicators“. On this page you will find FRED graphs of 6 economic indicators, updated automatically when new data is available. I’ll tell you a bit more about these indicators below and why they were chosen. First, there are a lot of economic indicators these days. There are individual indicators (we track 66 of them), like the unemployment rate, for very measuring very specific aspects of the economy, and composite indicators (made up of many individual … Continue reading

Posted in Economic Indicators, Economy | Tagged , , | 6 Comments

Income investments & that vertical drop-off thing that’s coming…

You’d have to have been living in a cave, or dry camping in the wilds for 6 weeks like I was until a few weeks ago, to not have been bombarded by the 2 words that I allude to in the title of this post. I’ll try and spare you and only say them a few times in the post. Needless to say the ‘fiscal cliff’ fears have taken a bit of a toll on income investments, in particular equity income investments that have performed well so far this year. I thought it wold be useful to take a look … Continue reading

Posted in Dividends | Tagged , , , | 2 Comments

Pray for higher interest rates

OK. I know. I’m schizophrenic.  In my last post I’m telling you why I think interest rates will stay low longer than people expect. Now, I’m going to explain how rates could go higher and why I’m hoping they do. One of the things that makes investing a challenge is that you’re dealing with the future. As Yogi Bera so eloquently put, “It’s hard to make predictions, especially about the future”. The future, having many possible outcomes, is about dealing with probabilities. Most investors can’t deal with this. We’re emotionally wired with many biases that prevent us from effectively dealing … Continue reading

Posted in Bonds | Tagged , , | 3 Comments

September income investor dashboard

Here is the updated income investor dashboard for September. Prices are as of the market close on Friday September 2nd. August overall had one general theme; stocks bad, bonds good. See the dashboard below. August was one of the worst months on record for stocks. Markets are trading mainly on macro level news, European bank and sovereign concerns, US economic slowdown or recession concerns, etc. Stock indexes were down big for the month with international and emerging markets getting hit the hardest. I’ve heard it said that the US market is the winner in the ugly contest or something like … Continue reading

Posted in Portfolio, Stocks | Tagged , , | 2 Comments

Update on contrarian indicators – sit tight for now

Today I wanted to update my top 3 contrarian indicators. The market selloff continues and looking at contrarian indicators can give an investor an edge in determining the right time to buy. I introduced these indicators in this post; money flows; investors sentiment, and margin debt. Lets see what they’re telling us. First up, money flows. Money continues to pour out of equity mutual funds. The latest data from ICI is below. The $30B outflow out of equity funds in the week ending Aug 10th was the worst since Q1 2009. On a monthly basis you can see the comparison … Continue reading

Posted in Economy, Stocks | Tagged , , , | 5 Comments