Total Industrial Production IndexPonder the following, something nobody would be expecting:
What if the United States gets an "Industrial Revolution 2.0" under Trump's watch?
A close above that breakout line would be a VERY IMPORTANT signal, not to be taken lightly.
Is this even possible? If so, how probable?
INDPRO trade ideas
Industrial Production, and how it can help us time larger cyclesIn this video I use Industrial Production, and more specifically, its Rate Of Change to show how we can approximate Booms and Busts in the "Business Cycle".
I also go over previous cycles, and what to look for in our current cycle.
As always, good luck, have fun, and practice solid risk management.
Lag for StatsHow about an indicator that shows the days from the last data point of a statistical chart, such as PMI or any government state, to the current date. Showing the lag before the release of data. Just seems to me that in these difficult days that government may be fudging the numbers. Also holding back on the release of stats for public consumption. Maybe they release it to some, but hold back to providers like TV. I do not know. But I would like to be able to see if they do. Anyone out there want to take up the challenge to make such an indicator? Which may warn us when there is bad economic news on the horizon.
DATA VIEW (NOT A FORECAST): US INDUSTRIAL PRODUCTION GROWTH FINEIndustrial Production Index has been trending within its relevant ascending range since 2011 and has restored all the losses of the 2008-2009 financial crisis back in mid-summer 2013.
Thus overall the Industrial production in the US is developing at a good pace, in line with the lateral uptrend in S&P 500.
Indicators-Economic Data, Don't Knock IT Until You Have Tried ItWhen looking at the Industrial production Index (one of the best forecasters of future recessions) you noticed every top over 50 years, has been marked by a significant angle divergent. @nmike a long time ago introduced me to RSI (50) and how to properly use the indicator. He just recently revisited this topic and I started looking through economic data. What I found was exception results.
To use RSI (50) to scan charts for divergences or support you often compare RSI to price. When you see price (in the case economic data) going up and RSI going down, that is what we call divergence. When you have Price up and RSI down, that usually calls for a top and future pullback. Using RSI with Industrial Production we can call a recession before a recession is underway. Being able to see a large divergence between Economic Data and RSI, we can also assume a major market correction is under way.
Industrial Production -- Rolling 12 Month Percent Change StrongIn the top pane is this month's latest Industrial Production Index, compared against the SPY, both on a Monthly timeframe. Plotted in the second pane is the rolling 12 month percent change in industrial production.
The IPI is an indicator prepared by the Federal Reserve Board using data from the Bureau of Labor and Statistics to measure the total output from several key industrial production industries: Manufacturing, Mining, Electricity, and Gas specifically.
The reason why I found this chart interesting is twofold. One, although I would not use it as a rote timing indicator, the tendency for the past several decades is that high industrial production is reflected by positive market returns on a long-term timeframe.
Two, and more topically, a popular meme in the financial media is that industrial production in America is weak, and this shows that not only is the absolute level of output making a new high, but the rate of change YoY is also accelerating over prior months.
The most recent YoY value of 6.077% is the highest reading since February 2011.