User:Vtaylor/Financial stories/Indicators - leading, trailing and misleading

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Indicators - leading, trailing and misleading

  • Indicators of economic decline such as car sales [1]
  • spans (which are inquiries for bunkers – the fuel oil for ships ) are an excellent insight into the insiders view of energy prices. [2]
  • Jobless claims up, help-wanted advertising down
  • Economic Cycle Research Institute (ECRI), an independent forecasting group - weekly leading index (WLI) [3]
  • GDP is calculated by subtracting imports from GNP, which in essence is gross end user sales of goods and services. The article [4] mentions $100 and $50 carburetors (sic). But the real problem is more like $100 and $5. When the carburetors are bought from overseas, they still sell for pretty much the same price so GNP is unaffected. The cost of the imports is so low that GDP hardly declines as a result of the subtraction. But the carburetor makers are laid off, so the work force shrinks. Since measured output (GDP) is essentially unchanged, productivity rises. ... But the fall in domestic value-added associated with the job losses is simply not being measured. So GDP is heavily overstated.[5]
  • Bear Trend
    April 23, 2012 - Unless something truly weird happens, the 20 day EMA of the HYG/TLT ratio will cross the 50 day EMA downwards today. This indicator tracks the relative performance of “high-yield” (HYG, the debt formerly known as “junk”) corporate bonds and Treasury bonds (TLT). When perceived credit risk is rising, which is bearish for stocks, HYG falls and TLT rises. I use the ratio rather than the difference to remove the effect of changes in interest rates, which of course affect both classes of bonds, and then the moving averages to filter out noise. The resulting crossovers confirm intermediate-term stock market trend changes. The previous bear crossover was at the beginning of May, 2011, followed by a bullish crossover (falling credit risk, bullish for stocks) in the first week of January, 2012. This marks the end of the rally and confirms the new bear trend as far as I am concerned. [6]