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(2/11/17)
One thing to keep an eye on in the months ahead is the 4 week
moving average of Initial Jobless Claims which has dropped to levels not seen
since the early 1970's.
Meanwhile you may wonder why anyone would care about Jobless
Claims. If we overlay the S&P 500 with the 4 Week Average of Initial
Jobless Claims there has been a rather strong inverse relationship between the
two going back to the late 1960's. Notice when Jobless Claims have fallen
(points A to B) the S&P 500 has risen (points C to D).
Meanwhile when Initial Jobless Claims have risen (points E to F)
generally there has been weakness in the S&P 500 (points G to
H). Overall we are starting the 9th consecutive year where Jobless
Claims have decreased so an upside reversal is inevitable at some point.
The question is when does it start and will it have the same consequences as
before?
Amateur Investors
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