No Recessio yet ... but ... Economy is starting to lose Momentum!

[une_mon]

Hi guys, I just decided to share some of my macro indicators with you. I hope to receive some constructive feed-backs (hopefully better than those I received in the P/L 2013 forum ... that made me decide to quit elitetrader).

U.S. economy is IMO still in Expansion Mode ..... .... however ... it has been losing momentum over the course of the past 6 months. If the trend continues moving forward (an I am not saying it will) a recession in possible towards the end of 2013 / start 2014.

I also decided to regularly publish the indicators on my twitter account: @unemon1

Have a nice day


attached is my Monthly trading Strategy. The rule is: better safe than sorry (as in 00-03 and 07-09).

 

[une_mon]

Business Activity index on the decline (for the first time since mid 2012). Risk of a (at least) 5-10 correction increasing in coming months). Considering buying some insurance by selling OTM call and buying OTM puts.

 

[une_mon]

I really thought it was set to go back below the 1.00 threshold this time! ... However it did not. PMI isn't significant di per se. Always consider it in a framework with other indicators. A move below 1.00 is however sure not something to cheer about!

 

[une_mon]

A recession in the next 3-4 months is not yet in sight (for now). This indicator is a combination of leading Indicators all available at the FRED Data website.

One might argue about its scientific validity ... I am not claiming any!

however it did help me out during the last downturn ... this is why I always keep an eye on it!

The threshold line is arbitrary! below 1 means "contraction" above 1 means "expansion" of the leading indicators. when it is below 0.9-0.8 it usually follows also a contraction of the real economy.