RE: Does a New Uptrend in the Unemployment Rate Mean That a Bear Market Has Started?
(2020-04-12, 11:13 PM)isatrader Wrote: Quick Links
■ 40 Year Unemployment Rate compared to the S&P 500 (3:55)
This week I wanted to have deeper dive into some longer term charts, and one area that especially caught my eye was the Unemployment Rate compared to the S&P 500 over time as the Unemployment rate has spiked recently. So, I've marked up long term chart, which shows what has happened during the past four times that it has started trending higher in the past 40 years. What it shows is that in 3 out 4 of the periods when the unemployment rate trended higher. That the stock market didn't bottom for around 18 months, but then recovered back into Stage 2 while the unemployment rate continued higher for a while before topping out and starting to trend lower again. So although only a small amount of data points. It does show a 75% chance of a more major Stage 4 decline from here.
This is only one data point though, as in the Stage Analysis method we use the Weight of Evidence technique to combine what all the various market breadth charts are telling us. But I do think it's an interesting addition to our Weight of Evidence to keep an eye on.
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isatrader, Fasinating work around the Unemployment Figures, enjoyed that insert. Will be watching that with interest going forward.
RUTrading
"The more mechanical I've made my system and the less subject to judgments and emotions, the more profitable it has become." Stan Weinstein
"The more mechanical I've made my system and the less subject to judgments and emotions, the more profitable it has become." Stan Weinstein