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Friday, June 29, 2012

Initial jobless claims

I thought this was a pretty interesting chart.  Notice the scale on the 4 week MA is inverted so lower numbers are at the top to make it in sync with SPX.

In 2007 we can see the claims MA turned down before the final market high.  In the spring of 2008 the MA did not confirm the bounce in the market.  It also did not confirm the bounce in Aug.  The MA lagged SPX a bit in early 2009, but it did turn up to support the rally within a few weeks.  We can see a dip in 2010 during the big sell off in SPX, but it turned back up in Sept. when the market started to rally again.  The dip in the MA during that time was pretty small in looking at the overall chart.  Last fall there was hardly a blip in the MA as SPX fell 20%.  It clearly broke out to new highs well ahead of the market recovery to new highs.  Lets zoom in to the last year so we can see what is happening now a little more clearly.

This scale is back to normal, so up is bad on this graph.  We can see we have made a higher low and higher high to indicate an uptrend may have started.  This chart seems to be confirming the weakness we have seen in other economic data recently.  This indicator has not done enough to reverse the trend it has been in since 2009, but it is clearly moving the other direction for now.  We will need to keep an eye on this over the next couple of months to see how it progresses.


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