{"id":273,"date":"2012-05-11T16:25:31","date_gmt":"2012-05-11T16:25:31","guid":{"rendered":"http:\/\/www.mathewbinkley.org\/?p=273"},"modified":"2012-06-13T22:51:08","modified_gmt":"2012-06-13T22:51:08","slug":"signs-and-portents","status":"publish","type":"post","link":"https:\/\/www.mathewbinkley.org\/?p=273","title":{"rendered":"Signs and Portents"},"content":{"rendered":"

Note:\u00a0 I actually wrote this May 11, but neglected to publish it because I was thinking about adding a few more things and eventually got side-tracked by some research I was doing on Cheatham County.\u00a0\u00a0 Unfortunately, my predictions seem to be panning out.\u00a0\u00a0 If only I understood women as well…<\/p>\n

Since I began writing this, CNN came out with their “Fear and Greed index”<\/a>, which does what I was trying to do, only much better, so give them a look.<\/p>\n

—<\/p>\n

My dad has been hectoring me to predict the mood of the market so he can rebalance his retirement portfolio.\u00a0 After doing some research, I’m not an optimist about the next 6 months.<\/p>\n

Bad sign #1:\u00a0 Personal income growth is slowing<\/h3>\n

\"\"<\/a>The ECRI reports<\/a> that the growth rate in personal income (the blue line) has slowed to 0%.\u00a0 The income growth rate is very strongly to economic conditions.\u00a0\u00a0 You can see that a sharp downturn in the growth rate often presages a recession.<\/p>\n

Bad sign #2:\u00a0 Stock sales by insiders near decade peak<\/h3>\n

\"\"<\/a><\/p>\n

CNN reports<\/a> that stock sales by insiders (CEO’s and directors at companies) are the highest in 10 years.\u00a0\u00a0 While CEO’s are still publicly forecasting good times, their stock sales tell a different story.\u00a0\u00a0 Why sell your stock today, if you honestly believed your company’s stock was going to be worth more in 6 months?<\/p>\n

Bad sign #3:\u00a0 Price of oil drops 10% in a week<\/h3>\n

\"\"<\/a><\/p>\n

The price of oil may be going down because the market believes the chance of armed conflict with Iran is diminishing.\u00a0 That would be good, because lower gas prices would help stimulate the economy.<\/p>\n

Unfortunately, what I’ve read is that the price dropped because of decreased demand due to slowing economies in China, India, and Europe<\/a>.<\/p>\n

(Probably) Bad sign #4:\u00a0 The VIX index is rising<\/h3>\n

\"\"<\/a>The VIX index measures volatility in the market.\u00a0\u00a0 Peaks in the VIX are usually correlated with market drops.\u00a0 You can see it reached “bottom” in 2012, and is showing a slight uptrend towards the end.\u00a0\u00a0 That is signaling increased uncertainty about the immediate future.<\/p>\n","protected":false},"excerpt":{"rendered":"

Note:\u00a0 I actually wrote this May 11, but neglected to publish it because I was thinking about adding a few more things and eventually got side-tracked by some research I was doing on Cheatham County.\u00a0\u00a0 Unfortunately, my predictions seem to … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-273","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.mathewbinkley.org\/index.php?rest_route=\/wp\/v2\/posts\/273","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mathewbinkley.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mathewbinkley.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mathewbinkley.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mathewbinkley.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=273"}],"version-history":[{"count":13,"href":"https:\/\/www.mathewbinkley.org\/index.php?rest_route=\/wp\/v2\/posts\/273\/revisions"}],"predecessor-version":[{"id":336,"href":"https:\/\/www.mathewbinkley.org\/index.php?rest_route=\/wp\/v2\/posts\/273\/revisions\/336"}],"wp:attachment":[{"href":"https:\/\/www.mathewbinkley.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=273"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mathewbinkley.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=273"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mathewbinkley.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=273"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}