Six weeks before Bernanke mused aloud about the Fed reversing QE and yields responded by rising, BCD Research argued empirically that the Fed would tighten policy by the 4th quarter 2013 and that the Unemployment Rate would reach 6.5% by the 4th quarter – both occurred on schedule. Click here to view this report.
Five months after the 2011 Summer market rebound a sufficient number of Market Peak Indicators surfaced to turn negative concerning the outlook for equities. Specifically, the S&P 500 was expected to peak in February 2012 and it peaked in March 2012, but at a higher level then initially expected. The higher mean-absolute-deviation focused on 1350, which was 2.9% short of the March 2012 monthly average peak level of 1389. Click here to view this one page report.
When there’s no recession only two Market Trough Indicators are needed to re-enter the markets on weakness and this proved to be the right strategy. Twenty-six trading days later the S&P 500 reached a bottom on October 3rd. Click here for full report.
Slow growth in Europe exposed the excessive leverage and triggered the Euro Crisis. This crisis surfaced coincident with the U.S. Budget Control Act, which explains the summer market correction. The Japanization of the U.S., occurring since early 2000, explains the U.S. slow growth and this has exposed the need to de-leverage, which will explain the growth for several more years. Click here to view full report.
During early August 2011, about the time the 50 day moving average moved below the 200 day moving average, or the “death cross” appeared in the S&P 500, market sentiment was deteriorating daily; however, the market fundamentals were starting to improve, as cited in the attached report. Recession discussion was rampant, but this was not the conclusion based on the data at the time and this proved to be a correct viewpoint. Read the attached for an objective perspective in early August 2011. Click here for full report.