Black Friday is upon us! Heralded as a day for consumer bargains (including our very own sale with -60% OFF at the Academy - a shameless plug, I know), could this holiday season kick-start the US business cycle? Our Checklist has just returned positive, indicating expansion in the coming months, ending a period of cautionary signals.
In this week’s Trading Club video analysis I provided a fresh update of our Checklists for the new month ahead. Frankly, in the past couple of months we have seen some pretty negative signals across several key asset classes, with slight improvement highlighted last month. As we look ahead to December the business cycle Checklist - perhaps our biggest area of concern in recent weeks - has registered +2.5 having been negative previously. This is a big deal, particularly as we enter 2020 and a new decade for investing, and suggests that recession fears are behind us and we should now be looking forward to the new year with optimism.
As you can see below, if the Black Friday sales and holiday season sees the consumer spend confidently, then one of the only two negative scores on our record could potentially reverse positive too (the other being manufacturing, represented by the ISM Manufacturing PMI, which may also show improvement in next week’s release).
Here you can see the resilience of US corporate earnings and the S&P 500 as proxies for the business cycle expansion which looks set to continue. Equity bulls will be expecting more all-time highs in the coming months if this holds.
Yet as always, its never so easy when trading markets. With equities overbought on a daily and intraday basis, it would take a brave person to buy the new highs here. Could we be due a short-term correction, that might provide an even better opportunity to get long?
When we’re faced with such questions, as we often are, we without fail refer to our process and see what our Checklist tells us. As this is a free blog and our scores have only just been released to our premium Trading Club members, I can’t reveal the total score but can share with you an impression of the mixed scores that make up our final tally.
If you are curious to know our definitive score and outlook for US equities as well as numerous other currencies and commodities markets, there has never been a better time to join us at the Academy as a student or member of our Trading Club with 60% OFF in our Black Friday Sale! Watch this short video to see what you get as a member of the Academy! Seize this deal fast as this won't last!
I hope you found this analysis helpful and see how as markets drivers become increasingly dynamic, it has never been more important to trade with the odds on your side with a proven process.
If you would like to join us for our full analysis including new insights each week, or learn from the ground up with online tuition from Lex in our Million Dollar Traders online course, then use your Black Friday discount today and take your financial knowledge to the next level right away!
Have a great BLACK weekend!
James Helliwell | Chief Investment Strategist