5 replies to this topic

[qqqqtrdr]

      My Long Term ( 6 month ) forecast is showing US equities have more downside risk.... Looking at economic statistics, here is what I see.....

 

Car Sales = Trend ( Neutral ) - Strong market

Used Car Prices = Trend ( Neutral ) - Strong market

Consumer Debt = Trend ( Neutral ) but consistent ( Total Debt / Number of Families )

Home Sales Prices = Trend ( Down ) - Weaker

Home Sales Number = Trend ( Down ) - Weaker

GDP = Trend ( 2.8% ) Down from last quarter ( 1 point )

Energy = Trend ( Lower due to over supply )

US Technology = Trend ( Down due to Trade Restriction, Taxing of technology in Europe, China investing in their own )

     - No new consumer must have ( TV 4K - most people have, mobile phones - most people don't need to upgrade, computer laptops people replacing )

     - Memory technology prices dropping

     - AI technology ( 2 years out to spur more buying )

     - Severs 2 years out as well to take on more capacity for AI data

Profits mixed depending on market....

 

Overall low unemployment is helping higher wage growth which should spur spending by consumers...   Although home sales are now low, and mortgage debt is really high, I believe that average Americans are reaching a point where they feel they cannot take on more debt. It is too early to tell, but we must continue to look at trends....   If Home prices and Sales continue to decline and we start to see weakness in Autos it will be easy to see a more of substantial decline...   Europe GDP Numbers are sub 1.5 percent annual growth and weakening as well..., and numbers from China are also weak, and they could be having negative GDP Growth even though they show 1.5% growth in what they report.   Numbers are down substantially from growth rate that was seen from 2016 to 2017.

 

The Auto Sales did show weakness earlier at the end of the Summer but rebounded, but in China Auto Sales are contracting by 14% year over year. 

 

qqqqtrdr.

 

 

[Rogerdodger]

For fun, I have tried to replicate Terry Laundry's "Ringing Cycle" theory in which he would identify a deep low and it's next deep low to produce a predictable next cycle low. (In the same way that a struck bell reverberates in a predictable cycle until the next big strike changes the cycles.)

It may just be a "Pseudo Cycle" as many seem to be. ;-)

 

If there is anything to it, Santa might be in for tough sledding this fall/winter.

UCO /gasoline prices might be an indicator of potential trouble ahead.

 

 

Edited by Rogerdodger, 11 November 2018 - 12:59 PM.

[Rogerdodger]

And then there's this: 

Strong Selling Pressure Sparked by Global Economic Slowdown

[qqqqtrdr]

At the moment GDP of Europe and China have been dropping.  China is lowering interest rates...  Dollar is at a 17 month high, but not high on a 10 cycle.    With GDP below 3% unless we start seeing inflation, I think we will keep interest rates steady...   If start dropping more overseas I think it will take the US with it...  End of December sounds good time for a low...

 

Barry

[Dex]

At the moment GDP of Europe and China have been dropping.  China is lowering interest rates...  Dollar is at a 17 month high, but not high on a 10 cycle.    With GDP below 3% unless we start seeing inflation, I think we will keep interest rates steady...   If start dropping more overseas I think it will take the US with it...  End of December sounds good time for a low...

 

Barry

 

This has been going on for awhile in emerging markets and other places outside the USA.  

[qqqqtrdr]

Valuations in Europe and elsewhere are much lower than the US....    I do think it might be better to invest there than in US equities...    I was told at the beginning of the year to invest in Europe and Emerging, but held off due to their poor performance over S&P, but they all seem to be doing just as bad now.

 

qqqqtrdr