No. of Recommendations: 7
If looking at a 1 year S&P/Nasdaq chart it looks as if we might be exactly at that point right now, in the middle of a "rounded top" as he called it.
It is at times like this when they say are "shaking out the weak hands."
Never take counsel of your fears.
The thing about "rounded tops" is that you don't know until afterwards if it was the top or just normal price action. What "observe rounded top" means is that there is plenty of time to get out; no need to be on a hair trigger.
The 2016 Growth and Trend paper goes into this.
"...differentiate between situations where recession likely, and situations where recession is unlikely.
...
directs the [timing] strategy to turn itself off during periods when those signals are unanimously disconfirming recession, i.e., periods where they are all confirming a positive fundamental economic backdrop."
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for the U.S. economy, the strongest historical recession indicator is Real Retail Sales Growth. Another accurate recession indicator is Industrial Production Growth.
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Real retail sales growth and industrial production growth represent two diverse, independently reliable indicators of the health of the two fundamental segments of the overall economy: consumption and production.
At present, both these FRED indicators are positive YOY, thereby disconfirming recession, therefore saying that we should stay in the market.
