GTT

Both the signal graphs have been updated to Feb. 1, and neither is signalling a recession,
so GTT suggests it is still reasonable to ignore momentum timing signals.

rrjjgg

11 Likes

I just started a new GTT thread by accident, so, for a reference for those unfamiliar with
this method, see , https://discussion.fool.com/gtt-timing-32523262.aspx? which started the previous long thread based on the ideas referred to there.

4 Likes

For those new, the FRED data is updated around the middle of the month. The latest data is for the previous month. So the lag is generally 1 1/2 months to 2 1/2 months. Every once in a while there will be more than one update in a month.

The latest update for Advance Real Retail and Food Services Sales (RRSFS) is
2022-02-16 7:40 AM CST
Date Range: 1992-01-01 to 2022-01-01


Note that there is considerable lag. Here it is March 16 and the latest data is Feb 16, for Jan 1. That’s 2 1/2 months old data. I expect that the next update will come in the next day or two, or maybe today.

With respect to the GTT rules, the S&P500 is signalling to sell, but the FRED data is saying to ignore that. Perhaps by the time (if) the FRED data indicates a possible recession the S&P signal will be in the black.

4 Likes

SIGNAL CHANGE!

This week the ‘FRED’ graph was posted a day early and was below 0 on 3/1/22 indicating the use of
your usual timing methods, should you be a momentum based timer.

https://fred.stlouisfed.org/graph/?g=3asR

When the graph comes up click on the ‘max’ button to see the updated graph.

It is clear that the
last two extreme values were very extreme, both the low and high points, suggesting the current
reading is a type of reversion to the mean after these extremes, so it may not signal a recession.
As you can see from the graph false signals occur once in awhile.

I just checked and the second graph is available. It is still positive, but may be on the way down. Time will tell.

https://fred.stlouisfed.org/graph/?g=3atC

The unemployment graph is also still low, giving no hint of a recession.

https://fred.stlouisfed.org/series/UNRATE#0

rrjjgg

7 Likes

The Fred graph is almost at zero and improved from the last post, but still negative,
indicating the use of
your usual timing methods, should you be a momentum based timer.

I would not be surprised
if it goes above zero next month.

Neither the other graph nor the unemployment graph
is suggesting a recession anytime soon.

https://fred.stlouisfed.org/graph/?g=3asR

rrjjgg

9 Likes

GTT-Neither the other graph nor the unemployment graph
is suggesting a recession anytime soon.

The market performance would suggest that something is rotten, unstable and unknown about the near future. GTT is just lagging behind the curve.

**Sector                  Last % Change      Market Cap  1-Year % Change**
5/18/2022               AS OF 09:36 AM ET  5/17/2022   5/17/2022
 
 
Communication Services             -0.91%    $4.89T            -20.00%
Consumer Discretionary             -2.97%    $6.84T            -12.69%
Financials                         -0.96%    $7.76T             -9.89%
Industrials                        -0.96%    $5.01T             -9.26%
Materials                          -0.98%    $2.58T             -3.68%
Information Technology             -1.25%    $13.16T             1.52%
Real Estate                        -0.40%    $1.61T              3.09%
Health Care                        -0.55%    $7.56T              6.41%
Consumer Staples                   -1.87%    $4.46T              9.43%
Utilities                           0.13%    $1.69T              9.76%
Energy                             -0.16%    $3.81T             58.36%
 
S&P 500 ® Index                    -1.18%      --               -2.04%

GD_

6 Likes

The Fred graph is still negative,
indicating the use of
your usual timing methods, should you be a momentum based timer.

Neither the other graph nor the unemployment graph
is suggesting a recession anytime soon.

https://fred.stlouisfed.org/graph/?g=3asR

rrjjgg

4 Likes

Neither the other graph nor the unemployment graph
is suggesting a recession anytime soon.

Hehe.

I’ve seen a few mentions of “soft landing” in the media recently, so I think a recession is baked in now, the only debates now are how soon, and how bad. :frowning:

I wonder if any hedge funds scan the media for that term?

SA

2 Likes

GTT is useful only to control unnecessary trading when using certain timing signals. While it suggests a possible recession in the future, I don’t think just one signal is all that predictive. When both
signal, the possibility of a recession increases.

That said about the GTT method, I do agree that a recession may be coming in the near future.
I can’t remember the reference, but I recently saw a graph that claimed to show inflation spikes and when the next recession was . It had maybe 15 examples and all but one had a recession quickly following (within a few months).

rrjjgg

3 Likes

The Fred graph is still negative,
indicating the use of
your usual timing methods, should you be a momentum based timer.

Neither the other graph nor the unemployment graph
is suggesting a recession anytime soon.

https://fred.stlouisfed.org/graph/?g=3asR

rrjjgg

9 Likes

Neither the other graph nor the unemployment graph is suggesting a recession anytime soon…

It rather surprises me that such models use that indicator.
And I’m not complaining. Whatever works, right?

It might be a good indicator, but one of the most reliable indicators gives warning much sooner, and with a vaguely predictable amount of time.
https://fred.stlouisfed.org/series/T10Y3M

In fact I’m astonished that the 10y-3m yield curve inversion seems to have predicted the Covid market plunge. Mysterious.

Current reading is +.056, meaning one more short term interest rate rise of 75bp would probably push it negative.
Which in turn would portend a statistically likely recession starting around a year later, plus or minus 4-5 months.

Jim

18 Likes

Jim,

I’m following the two graphs suggested as a minimal set of signals by the originating paper and Ray (unemployment).

Part of the reason yours isn’t used might be the credit spread graph you reference only includes four recessions, while the retail sales graph has twelve recessions. A bit more stat to bolster its use?

You also note the credit spread warnings were very early, so the signal might be very accurate, but slow enough to not help in deciding when to ignore momentum timing signals.

It’s interesting to note that Lohill’s BCC signals cycle between two and three bull signals most of
2021 and that period had no change in GTT. Lohill’s signals change to two bears 4/28/22 and became three bears, BCC=0, about a month later, while the
GTT signal changed to following momentum timing signals on 4/15/22, just in time to catch the bearish
change in the BCC signals. So GTT seemed to help this time.

rrjjgg

3 Likes

The Fred graph is still slightly negative,
indicating the use of
your usual timing methods, should you be a momentum based timer.

https://fred.stlouisfed.org/graph/?g=3asR

The $SPX is barely under its 200 day MA, so it will
interesting to see what happens during the upcoming Inferior Five days.
It may give a suggestion whether we’re just in a correction or really
coming out of the bear market.

rrjjgg

1 Like

Both of the signal graphs are positive on 8/1/22, so GTT suggests ignoring momentum
signals.

Yes, this is certainly hard to do when BCC=0 and almost all the other signals posted here are
screaming ‘BEAR’!

(From ‘Psychology Today’: ‘Cognitive dissonance is a term for the state of discomfort felt when two or more modes of thought contradict each other. The clashing cognitions may include ideas…’ ) :->

https://fred.stlouisfed.org/graph/?g=3asR

https://fred.stlouisfed.org/graph/?g=3atC

https://fred.stlouisfed.org/series/UNRATE#0

I thank Ray for correcting my last post.

https://discussion.fool.com/gtt-update-summary-35155551.aspx

I did not
carefully check a date on a graph to see it had not been updated.
Updating usually occurs on the 15th of each month, not so last time.

Your very cognitively discomforted

rrjjgg

3 Likes

Updating usually occurs on the 15th of each month,…

Not quite. I have a job that runs every day, downloads the RRS and IND data files (data, not graph) and also keeps track of the “Last Updated” field. It also saves the file, with the date embedded in the filename. It has the data since early 2016.

Anyway… here is the distribution of the day numbers of the updates:


Advance Real Retail and Food Services Sales
Series ID:  RRSFS

  Count Day of month
      1 01 
      1 02 
      1 05 
      1 10 
      2 11 
      5 12 
      7 13 
     19 14 
     26 15 
     21 16 
      8 17 
      3 18 
      2 19 
      1 23 
      1 26 

Industrial Production: Total Index
Series ID:  INDPRO

  Count Day of month
      1 01 
      9 14 
     28 15 
     18 16 
     20 17 
      4 18 
      1 27 
      3 28 
      1 31 

The dates late in the month are usually the second release in a month, with revised value(s). The dates early in the month are usually preliminary, and will be revised/updated later in the month.

If you want to look at the data only once per month, you should wait until the 18’th of the month or later.

8 Likes

The 18th it is then. I had noticed variations in the dates earlier, but got in the habit of using
the 15th, provided I saw the date change.
Thanks.

rrjjgg

Both graphs are above 0, but the Advanced Retail sales is
only a hair above at 0.0039,
Advance Real Retail and Food Services Sales | FRED | St. Louis Fed.
While tech layoffs are in the news, the unemployment graph is still healthy.
If the above graph is used strictly, momentum signals can continue to be ignored using the GTT idea. I’m thinking using
BCC signals or other momentum signals might not be a bad idea, especially if sales data weakens even a bit during the next few weeks.

rrjjgg

2 Likes

Both graphs are above 0, but the Advanced Retail sales is still barely above 0
Advance Real Retail and Food Services Sales | FRED | St. Louis Fed .
While tech layoffs are again in the news, the unemployment graph is still healthy. Momentum signals can continue to be ignored using the GTT idea.

5 Likes