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Unemployment

Initial Claims vs. SPX - Close to a CrossCross = very negative, and typically occurs during a fed rate cutting cycle. These often top-tick markets, and this has been a very reliable indicator across all the bull and bear markets for quite some time. Note - I use ICSA because despite it being noisy, it's actually a cleaner data series when you just smooth it with a moving average (I use EMA). It's not subject to as much potential bias or data issues as some of the other unemployment metrics are.
FRED:ICSA
by GTStockmaster
1
Initial Claims UpdateToday's read (not accounted for in this chart) is starting to make this a bit worrying. ICSA rising again week over week, threatening to break momentum. ICSA is a noisy indicator, but if you simply add smoothing with a moving average calculation, it becomes a better version of the unemployment rate. I say it's better because it's not subject to data issues such as workforce participation rate or other such issues that may skew the data a bit. Beyond that, ICSA leads the unrate from a data perspective, so it's a bit more of an advanced indicator. For this indicator, I like to use the 52 week (1 year) EMA and the 26 week (1/2 year) EMA to smooth things out. This HAS crossed in the past 10 years temporarily during some big unemployment swings from hurricanes. So it's important to understand those as just temporary false signals, and not anything real going on with the economy. Right now however, we clearly have no hurricanes going on, and we're getting very close to a cross, which is a pretty damn good sell signal.
FRED:ICSA
by GTStockmaster
Unemployment Rate VS Dow JonesUnemployment Rates have hit the lowest value since 1970. Each time the UnRATE has reached a bottom and bounced up, we have experienced a stock market decline, in some cases a recession. This also lines up with 7-10 years economic cycles. We are on our tenth year since our last stock market correction. What seems very interesting is the fact that Crypto looks to have hit its bottom and is looking to start its next 3 year bull run. Stock market crashes last around 2-4 years (usually). This looks for crypto and the stock market to be inverse the next few years. Fidelity is launching its crypto trading platform for institutional clients sometime this month. Will this provide a bridge for institutions to transfer their money out of the stock market into crypto? It seems that way. If this is the case then we are about to experience a very large transfer of wealth. What will 85% of people feel when the stock market is declining and Crypto is going up? They will feel FOMO. They will also be looking for a safe haven for their cash, maybe its going to be digital gold this time...
DJ:DJI
by traderview2
6
Dow Jones Correlation with Unemployment Rate-Offical CalculationThis chart shows the correlation of the Dow Jones over time with the "official" Unemployment Rate here in the U.S. Its interesting at least to see how well the Unemployment rate dictates the tops and bottoms in the Dow Jones practically to a "T". Please comment and let me know what you think of this idea... Also, I have inverted the unemployment rate and applied the Heiken Ashi indicator to it for easier viewing and flow.
FRED:UNRATEEducation
by jasonroy40
5
Initial Claims updateNo MA cross included here, just an update on current Initial claims direction. We're still ticking upward more, haven't yet received confirmation, but starting to look like we'll get some momentum in the unemployment rate. Once that gets going, it's game over for the economy. We're getting more and more updates of corporate layoffs recently, but wait on data to confirm. FWIW, initial claims is a great series to watch, and is better than the straight unemployment rate because it's... Higher frequency Not affected by the volume of people out of the workforce Not affected by average hourly work week differences from month to month
FRED:ICSAShort
by GTStockmaster
Unemployment / Initial claims momentum for recession watchingUnemployment data is clearly one of if not the most important data sets when it comes to predicting a recession. With unemployment at very long term lows, when does this break, and what happens when it does? For me, I watch exponential moving average crossovers in unemployment data. Initial claims works if you smooth it out (it's a high frequency data series). The key takeaway with unemployment is that it tends to trend strongly. Once a direction is established, it will usually keep heading in that direction. Right now, the shorter-term moving average here is curling upward rather fast as we've heard about a series of big layoffs (GM) and potential weakness in the economy. Is this the start of something bigger? We'll have to wait and see of course, I watch for a cross and then sustained upward movement. When an economy gets tight due to inflation, higher interest rates, higher wage costs, and lower demand for big ticket items (as seen in autos, homes, etc) companies eventually are forced to lay people off. As you can probably see, this easily becomes a feedback loop in the economy. When laying off people reaches a high enough point, that affects the demand portion of the consumer economy, which then starts to affect companies bottom and top lines. This then forces more layoffs, defaulting in the credit cycle, etc etc. Basically, once unemployment picks up momentum, it almost always leads to a recession.
FRED:ICSA
by GTStockmaster
‘US Dollar index’, a buy ahead of Non-Farm Payroll numbersTrade Set up – Given the underlying trend, and at this very juncture, we feel it is hard to be short the USD. That said, with traders likely to defend the YTD high at 96.98, we feel waiting for a daily close through this resistance level makes sense as it would be sending a fairly powerful signal that the bullish trend is set to continue. On this development we would target 98.00, or the 61.80% retracement of the last major high, with stops below 96.30 looking to tighten stops as price moves higher. Why we like this trade – Price found strong support at the 200-exponential moving average, and used this as a platform to make a renewed assault above 96.00, and clearly the bulls are in control. We can take a look at the oscillators and see no immediate signs of a loss of momentum here, but one would expect momentum to wane into 96.98. Fundamentally, we see downside risks to the USD if we take our timeframe out a week into next week’s US midterms. However, with a $24B liquidity drain from the Fed’s SoMA portfolio tomorrow (which has historically been a USD positive), and the prospect of a 3%-handle in the wage data, as a feature in the US payrolls report we see the USD supported in the short-term. A close through the YTD high can only be seen as a bullish sign and we would trade this closing break accordingly. Disclaimer Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation
TVC:DXYLong
by Pepperstone
We Got the US Dollar Break! Now What? As discussed in my previous US Dollar -0.22% Outlook idea, we would need a catalyst to send us through the major resistance area of ~95.70 the 61.8% Fibonacci retracement . Yesterday was a quite a news day for the greenback and we got the push needed during the New York session and Fed speeches to send us through the resistance zone we've been trying to breach since August. However, it was short lived. We have since seen the dollar take a nose dive as the Federal Reserve's Jerome Powell hinted at slowing down the pace in interest rate hikes for the greenback. Tomorrow is no less exciting. With Non Farm Payroll and Unemployment events in the morning, we will see extreme movements, so as always, be vigilant. I will not be in the market and I advise you to do the same unless your trading plan involves high impact news events. I will be waiting for it all to play out. Remember, when you try and predict the market, it is just the same as gambling. We want to react to the market - let it show you where it wants to go, because it always does. What I will be watching for: The yellow zone we are toying with right now at 95.70 is the key area at play. I will be looking for a reaction to this area in two ways. I am looking for price action to confirm the 95.70 zone has now become support and will be looking to take longs up to the 96.00 zone. I am watching for the retest of 96.00, which will create a double top in a S/R zone. I will continue to hold until price action suggests buyers are exhausting, if buyers are not exhausted I will hold to the supply zone of 96.30+. When the buyers do show signs of exhaustion, then I will be looking to short the market down to the key area in the orange zone of 95.00, which has major Fibonacci confluence of 50% and 38.2%. Beyond that, we have a fresh demand zone in blue, at 94.50. If we can get the push down, I will be looking for price action to confirm long positions from there. Alternatively, we may see no further push north, and may snap below the trendline , reverting back to this 95.70 zone becoming resistance. if this happens, I will do the same as mentioned above. Look for a double top retest of the broken zone, observe price action for an entry reason, and take the market short.
TVC:DXY
by evansurfs
US Dollar OutlookComing into NFP this Friday, it's always important to see where the US Dollar is sitting. As you can see, we have tried for the third time to breach the 61.8% Fibonacci retracement and major supply zone of ~95.70 and have failed. The US Dollar will need a catalyst to break the zone and we may get that this Friday when Non Farm Payroll and Unemployment reports are released. If that's the case, I will be looking for long positions up to the 78.6% Fibonacci retracement and major supply zone of 96.30. On the other hand, if the reports released are negative, we may be heading into a decline to retest the lows of the 93.80 - 93.90 major demand zone. On the way down there are a series of minor resistance zones that have played as support in the past as well, though no real demand until we reach 94.50. Happy trading!
TVC:DXY
by evansurfs
ARE WE HEADING TO ECONOMIC CRISIS?I don't particularly enjoy breaking the bad news but we are at record low levels for insured unemployment which is kind of scary for cycle followers. What we have seen for the last 50 years, a dip in unemployment usually followed by an economic downturn and we see a sudden jump on unemployment numbers. There are many underlying factors to this, which I will not mention here - but fundamentally it is because people start to become too loose and take their current situation for granted and start to overspent which is also encouraged by the media, government & banks! What shall we do? Assume it will happen and start planning ahead! and KEEP IT REAL!
FRED:CCSA
by Keep-it-Real
1
Cup-&-Handle in the TBT- Interest Rates Going Higher, Tax Probs?Hold tight for this ride, there's a variety of reasons why bond prices will stagnate or fall. Interest rates should rise and be higher than they are now; "should" certainly isn't a reason for something to happen, but there are scant monetary policy maneuverings available for the Fed to keep interest rates low and by extension, prop the stock market up much longer. The TBT - ProShares' 2x Short 20+ Year Treasury Bond ETF - is an exchange-traded fund that seeks to double the inverse of the U.S. Treasury Bond index on the daily. When bonds do poorly from falling prices and/or higher yields, TBT rises and seeks to double the fall of long-term treasuries. There's a lot of reasons treasury bonds don't look so hot in the foreseeable future. Let's first be honest about the state of the economy - it's not doing as well as the Fed and economic experts might lead us to believe. 1. Data continues to show GDP is not as strong as predicted. GDP estimates are coming out crazy high. It's alarming to watch as the real numbers are revised lower and lower. 2. Input costs of all types are rising. Trade concerns and commodity shortages are leading to higher input costs in sectors across the board. 3. Unemployment numbers don't reflect reality. The unemployment numbers themselves might be valid, but the way they are calculated today is misleading. Experts claim that unemployment for college degree holders is below 2%. If the assessment is based on simply whether or not degree holders have a job, that might be true - but the numbers are false with regard to the reality of America's employment situation; an engineering graduate who is cooking pizzas for $8.50 an hour might have a job, but their pay grade is a fraction of what it would be if they could find employment in their field. Record-low unemployment numbers are no good when it means law school graduates are working as office receptionists and scientists are waiting tables, etc., and that's a more prevalent situation than what experts might lead us to believe. 4. The tax cuts aren't - and won't - help the middle- and working class as intended. The stated goals of Trump's tax cuts were to repatriate offshore money and bring corporate tax rates to competitive levels with countries like China. Those goals may be becoming realized, but the end result is not beneficial for the little guys. We've heard feel-good stories of employers tossing out $1,000 bonuses to employees, etc., but the reality is companies are using the favorable tax situation for stock buyback and M&A (merger and acquisitions) - and as a whole that benefits people at the top much more than professionals in the middle or workers at the bottom. So, the overarching situation is this: tax cuts aren't helping the everyday worker as much as experts might expect, and workers may be finding employment but they are underemployed and underpaid. Bottom line? Lower tax receipts with unfettered government spending will mean the U.S. Treasury will need to issue bonds. Bond prices will flounder and yields will rise - just as the Fed will presumably need to start printing money (QE 4?) - begging a couple questions: How are bondholders going to get paid? How is the strength of the dollar going to be maintained? Simply put, there are fundamental reasons for the price of the TBT ETF to climb higher. Similarly, there are technical reasons for the TBT to rise too - a cup-and-handle has printed in TBT's chart. This indicates higher prices in the future. A TBT trade is a little more involved than most, but could pay off with big returns on investment as the story plays out. Please like, follow, and share, and maybe we can have fun and do great things together. Thanks again! See it on the site: holsturr.com/category/markets/charts/ ** For speculative and research purposes - good luck! **
AMEX:TBTLong
by holsturr
DXY/ GBP$/ $JPY/ EUR$ - HAS THE USD RALLY KILLED INFLATION?Why has the relationship between inflation and unemployment reversed in recent times? (Phillips curve) - 1. 1980s vs 2017 - Expansion in govt and consumer credit, economic boom, demographics 2. unemployment manipulation/ part time, participation rate 4pts lower 63 vs 67. 3. Servicing debt rather than consuming more goods/ services - wage v debt differential 4. Consumer/ producer economy, importing and financialisation. 5. No trickle down of QE 6. USD rallying killing inflation (vs UK/ GBP) WATCH THE EXPLATION/ ANALYSIS BELOW -
TVC:DXY
by QuantumLogicTrading
When Continuing Claims for Unemployment Bottoms, S&P500 RalliesThe market is always worrying about various data series and the impact on the stock market. Today, this one was inspired by a Tweet by someone I follow on Twitter that I respect. The point of this chart is to show you the batting average of "What Happens When The Unemployment Claims Bottoms Out"? Technically, we don't know this is the bottom yet, but you can see here that if the forecast is for the next 6 months (a useful time horizon) then the odds of an up market are not just 50% but up to 75% chance. See for yourself and note that the market is more than just one statistic, particularly the Unemployment Claims. The market can be impacted by many variables, but certainly people working and not sitting around collecting insurance, would be a good sign for the economy overall. Either way - my lesson for today is "Don't just take what anyone says for granted." Go research it for yourself here at Tradingview.com Cheers, Tim West May 11, 2017 10:52AM EST
FX:SPX500Education
by timwest
2
EURUSD Trading HALTED in lieu of Non Farm Payrolls?Since price topped off at 1.09 the bears have been relentless in their pursuit of driving the price back down to previous lows. In the first week of April the EURUSD retraced over 40% with almost no resistance and just in the last 72 hours price has taken another 15% dive. Currently, price is consolidating between 1.07 and 1.065 or in Fibb terms .50 and .618. As we approach tomorrow mornings (Friday @ 8:30am EST) news release of Non Farm Payrolls , it seems that the major players have either reduced position sizes and/or exited their positions completely. These actions/precautions appear to be creating the dreaded barb wire consolidation that we see being produced since March 31st. What should you do? This type of movement is not terrible for scalpers as price has created VERY significant support and resistance at both 1.065 and 1.07. Due to the nature of this pattern I would suggest sitting it out until after the news releases and inevitable breakout that will occur, but if you HAD to enter for the sake of having an open position I would place orders to sell in the 1.068 area and orders to BUY in the 1.065 area, with profit target being set at the opposing price side of the range. You like breakouts - great, I do too and I'm anticipating a big one! We may see the classic NFP release where price moves hard in one direction then totally reverses direction leaving a BIG UGLY wick candle and half your account behind. So, in order to avoid that last part I said, wait for price to move and CLOSE past either 1.07 to BUY or 1.064 to SELL. Good Luck!
by MrTakeProfit