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March 16, 2022
If you want to be ahead of the markets, even in volatile times, you need the right data to give you the information necessary. Today, we’re publishing a Status Board; an overview of key economic or market data in a unique “signal” format for you.
I’ll explain the data, signals and triggers below.
How To Use This Information
This is how we stay ahead of the market; as it stands, and as I’ve expressed in the last few weeks, despite the hollerin’ over inflation and despite my worries over the yield curve, there does not now exist any data suggesting an economic slowdown.
Can that change? Sure, but taken together, the Status Board will show you when it’s time to be worried.
The Traders Reserve Status Board
The Yield Curve remains my top indicator. Note that it is red, it is in the danger zone of inversion, but it has not inverted and has risen from 21 basis points to 31 basis points in one week.
As to jobs, a quick explanation as to the separation of Weekly Jobless Claims and Monthly Jobs: Jobless Claims is more of a leading indicator over the Monthly Jobs report but the two need to be aligned for recession worries to exist. (In the strange times we currently live in, you can have Jobless Claims rise while Job Additions also rise).
If these are green, it means they are in the safe zone.
New Home Sales I track based on a rolling 12-month average; that average is currently 755K new homes. For this to be a concern, we need to see below average new home sales over several months.
Copper and Crude Oil are commodity-based leading indicators and as such, would need to make lower lows on their weekly and monthly charts to be in the red zone.
They’re not – both commodities are higher than they were in mid-February and higher than they were in March 2021. Thus, the green color.
Dow Theory is one last item I track. While the DJT (transportation index) did make lower lows and lower highs in November – December 2021, it has since broken that trend.
The DOW (Industrials) never confirmed the first half of Dow Theory (The DJT chart). Thus, markets are still considered bullish. And that’s why it’s green.
While other categories exist to be tracked, I find them less leading indicator and more confirming indicator. When it matters, we’ll point them out to you.
What you have in your hands right now is a simple Status Board to monitor on a weekly or monthly basis so you can make the best decisions possible in your investing or trading.
What you can see, however, is why we keep telling you that data to date – and it can change – does not suggest a material slowdown in the U.S. economy. There’s no evidence of it at this point. Only the yield curve is in a danger zone.
We’ll update the Board once per month, typically in the middle of the month.
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