3 replies to this topic

[DaVinny]

Not sure if someone did this analysis before already, but the last 2 times initial jobless claims plunged to the high-200k cyclical low, it would mark the beginning of the end of the bull run in US stocks. First, in April 2000 then SPX peaked shortly after. Then in 2006, we made lows in January though in that case took another year before stocks finally peaked. One could explain that the leverage cycle (subprime housing bubble) helped delay the inevitable.

And this time around, the amber light is on after initial jobless claims dropped to cyclical lows of 266k last Oct , and have been steadily higher since then. Obviously we have global CB intervention which is similar to the leverage cycle back in 2006-2007, but this bull run is living on borrowed time.




The signal to go LT short is when initial claims begin to stay above the 6-month moving average for sustained period of time. Not ripe just yet as we are still consolidating around the MA. Good thing is we get the number every week making this a more efficient indicator.

Edited by DaVinny, 19 January 2015 - 09:29 PM.

[gismeu]

nice!!! gis

[dasein]

thanks - nice research finding a nice correlation - that even makes sense - will be watching it! have you been able to take it back further in time? tia.

Edited by dasein, 20 January 2015 - 10:21 AM.

[DaVinny]

thx guys, i haven't looked farther back, but will do some digging and come back