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  • Rare Sell Signal Flashes Warning On S&P [View article]
    Sorry for the duplicate reply, but wanted to make sure you got this response.

    Mentioned this on one of the comments above, but again... this IS part of one of many indicators invented by Tom DeMark, but this IS NOT the primary way he uses it. It is something I have used for a few years now because I have found that it's proven quite reliable over decades as a sign of intermediate term pauses or reversals. And the last time I wrote about this was 2 years ago, prior to the last 20%+ decline. Only time will tell whether it was reliable this time as well.
    Apr 18 03:49 PM | 1 Like Like |Link to Comment
  • Rare Sell Signal Flashes Warning On S&P [View article]
    Mentioned this on one of the comments above, but again... this IS part of one of many indicators invented by Tom DeMark, but this IS NOT the primary way he uses it. It is something I have used for a few years now because it's proven quite reliable over decades as a sign of intermediate term pauses or reversals. And the last time I wrote about this was 2 years ago, prior to the last 20%+ decline. Only time will tell whether it was reliable this time as well.
    Apr 18 03:42 PM | Likes Like |Link to Comment
  • Rare Sell Signal Flashes Warning On S&P [View article]
    This is why I love getting comments. I hadn't noticed that, so thanks very much for the observation. Probably not a coincidence... worth noting also that a) these sets of 3 signals also all took about 4 years from the time the bull markets started in earnest ('95-'99, '03-'07 if you start after the last retest of the low, and '09-'13). And of course both of the prior two bear markets began with the S&P within a couple percent of where we are now.

    And actually, you don't have to start in '95, you could start counting 1981. We got a major bear market off of that signal. Then correction/consolidation in '83 and '85 and a bear market in '87. Then a failure in '88 and brief consolidation in '91 and in '93 we got not a bear market but 2 years of 'dead money.'
    Apr 18 03:37 PM | Likes Like |Link to Comment
  • Rare Sell Signal Flashes Warning On S&P [View article]
    Well, 2 comments here. 1) I agree that in a large, long term bull cycle, sell signals will be less reliable. But we're still in a (secular) bearish market cycle, even according to your work (much of which I agree with), so I think we're ok in calling this a valid warning. 2) Of the nearly 50 years covered in the charts above, 9 signals occurred during the '82-'00 major bull cycle. In that period, these sells signaled the only major bear market of the period, and 2 of the 3 biggest corrections in the period. A further 3 more marked the beginning of periods of consolidation, one of which lasted nearly 2 years. And as mentioned, even with the 3 failures the market did--eventually--give back most gains before rocketing higher.

    No signal or indicator is perfect. But even in a secular bull market (which is not the case now), I think we'd be better armed keeping an eye on this.
    Apr 18 03:27 PM | Likes Like |Link to Comment
  • Rare Sell Signal Flashes Warning On S&P [View article]
    I hear you on avoiding going with 'guru' behavior. If nothing else, we should always do our own work, and come to our own conclusions, if we're investing money. But if someone presents data which may in some circumstances be helpful, I will always be open to considering it.

    In the case of the S&P monthly demark 9 sell, this is not even the primary way that demark indicators are used, but history has proved it useful, so I keep it on the radar.
    Apr 18 03:14 PM | 1 Like Like |Link to Comment
  • Could There Be A Silver Lining To Declining Labor Force Participation? [View article]
    Either that, or with economies not growing and income stagnating, some people have less motivation to stay in the labor pool. And with incomes growing, people have more of an incentive to enter. Much better argument for any causality to flow in the other direction, if there is one at all.
    Apr 10 02:56 PM | Likes Like |Link to Comment
  • 'Real' Unemployment Rate Rises To 10% [View article]
    You should check the link to my prior article about this (http://seekingalpha.co...). It doesn't completely answer your question, but there's a good chart there which looks at what the UE rate would be, holding participation rate constant at various levels. To directly answer your question, we really haven't seen this before, at least not in the past 50 or 60 years. The participation rate had generally been rising from the early 60s through 2000. This is the first time we've seen it drop so much. Some of this is related to demographics and the aging population, some of it is due to changing attitudes and gender roles, some of it is due to strictly economic factors. In the past, we'd seen participation declines understate the rise in unemployment (so in 2000-2004, 'Real' unemployment rose from 4% to nearly 8%, vs the 6% seen in official UE). But in the recovery from 2003-2007, for example, the participation was mostly flat, so the recovery in the official rate and real rate were about the same. This time there's been no 'real' recovery at all.
    Apr 10 10:42 AM | 1 Like Like |Link to Comment
  • 'Real' Unemployment Rate Rises To 10% [View article]
    This 10.0% is conservative, I agree. As cited, I'm only holding participation constant at 65% as of October'09, which was when the official UE rate peaked. But participation had already been declining from a peak of 66.4% in '06/07, and the absolute peak was 67.3% in Spring'00. I go into more detail in a prior article about 'Real' Unemployment (http://seekingalpha.co...), with charts comparing what UE rates would be if participation were held at different levels. Using the '07 peak participation rate, the UE rate would be 11.9%, and using the peak from 2000 it would be 13.1%. But using the participation rate from Oct'09 makes it more apples-to-apples when comparing the stagnation in the true unemployment picture with the 'recovery' story that the official rate is telling.
    Apr 9 01:00 PM | Likes Like |Link to Comment
  • What Analysts Aren't Saying About Friday's Employment Report [View article]
    Hi Bjarne,

    Just wanted to point you to the follow up article I wrote yesterday (inspired by your question). http://seekingalpha.co...

    Malik
    Mar 21 08:18 PM | Likes Like |Link to Comment
  • Is Unemployment Really Still At 9.8%? [View article]
    True: Teen (16-19) unemployment rate is very bad. It's now at a multi-year high of 25.1%. While obviously much better than the near 50% for youth unemployment in some European countries, it does not bode well for where this nation is headed, particularly given that the youth participation rate has been nosediving over the last 10-15 years (16-19 participation rate has dropped from over 50% in 2000 to around 30% now). The Feb'13 rate for 20-24 year olds is 13.1%, which is much better, but in Jan'13, it actually reached 14.2%, another multi-year high.
    Mar 21 06:18 PM | Likes Like |Link to Comment
  • What Analysts Aren't Saying About Friday's Employment Report [View article]
    Based on the peak participation of 67.3% from 2000, we'd be at almost 13% (12.9%) unemployment now. But if we just look back to the most recent peak in '06-07, it translates to 11.7% unemployment.

    I may do a follow-up tomorrow morning with charts comparing all three scenarios (UE as measured, and based on previous two peak participation rates).
    Mar 13 12:28 PM | 2 Likes Like |Link to Comment
  • Visualization About Violent Market Drops 1928-2010; Gold and the K-Cycle Revisited [View article]
    Great charts... re: your friend HB's comments, however... March 23, 2009, dow rose 500pts. And whether you call it a bull mkt or the mother of all bear market rallies... bottom line, in that case, path of least resistance was higher.
    May 13 04:11 PM | Likes Like |Link to Comment
  • Industrial Capacity Utilization: Bearish Foreshadowing? [View article]
    where did you get the correlation/r-squared numbers... those look waaay too high for those two time series.
    Jun 18 12:40 PM | Likes Like |Link to Comment
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