The probability of having a recession in the USA is:
Last update: 23rd of February 2020
Economic recession is a part of the business cycle. We observe it when there is a general decline in economic activity. From a trader's perspective, it is a moment in time when wealth creation and distribution occurs.
Simply put every recession brings a lot of opportunities for a trader to make outsized gains. Those gains can come from two main channels:
- Bear Market - if you are looking for a 20% decline in the stock market, a recession could bring such a one to you. Big and fast declines with many short squeezes provide the perfect environment for short-term traders.
- Next Economic Expansion - better than the bear market itself. The new economic expansion is where to look for swing or long-term opportunities.
A wise man once said to me:"All those companies who survive the recession will come out of it twice stronger"
.
The problem is that to forecast a recession is not an easy job. It is widely considered impossible.
|
This proprietary indicator is an attempt to do that - to forecast the next recession in the USA. It comprises different measures in a specific order which will signal if a recession is coming. The time horizon of this indicator is 6-12 months (still working on lowering this diapason). It has three levels:
|
 |
RECESSION INDICATOR'S Q&A
(Please read them carefully)
Q: How often it would be updated?
A: Weekly
Q: Why only for the USA?
A: The USA is the biggest economy in the world. It is fair to assume that if we are going to face a severe world economic crisis, a recession in the USA will be present as well.
Q: If we see it above 70% value can we place trades immediately?
A: NO! This indicator should NOT be used as an indication to open long or short positions. It doesn't provide investment advice. Also, have in mind that it was not tested in a real recession environment. Please read the Risk Disclaimer