{"id":169778,"date":"2020-05-01T07:11:27","date_gmt":"2020-05-01T11:11:27","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=169778"},"modified":"2020-05-01T07:09:06","modified_gmt":"2020-05-01T11:09:06","slug":"q1-gdp-data-will-likely-mask-true-global-economic-future-part-ii","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/05\/q1-gdp-data-will-likely-mask-true-global-economic-future-part-ii\/","title":{"rendered":"Q1 GDP Data Will Likely Mask True Global Economic Future, Part II"},"content":{"rendered":"
May 1, 2020<\/div>
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By TheTechnicalTraders<\/u><\/a>\u00a0<\/strong><\/p>\n

– This portion of our continued research into the Covid-19 virus event, one of the greatest disruptions to the global economy over the past 50+ years, concludes in this article.\u00a0 In Part I of this article<\/strong><\/a>, we highlighted how price factors and economic data continue to suggest the US and the global stock market will likely attempt to retest recent lows or fall further, as the extent of the virus event continues to play out.\u00a0 In this second portion, we\u2019ll highlight some of this data and present the opposite aspect of the technical\/data-driven research we\u2019ve been providing to you.<\/p>\n

Recently, something very important has happened in the US stock market \u2013 a breakout of sorts.\u00a0 The weakness we expected to see last week prior to the new $500 billion in new stimulus appeared to end this past week.\u00a0 Not only have the markets opened a bit higher this week, but they have continued to push higher over the past 3+ days.\u00a0 From a technical standpoint, as long as the support channels and current trends do not falter, the US stock market may continue to push higher before breaking this uptrend.<\/p>\n

Before we continue, be sure to\u00a0opt-in to our free market trend signals<\/strong>\u00a0<\/em>
\nbefore closing this page, so you don\u2019t miss our next special report!<\/em><\/p>\n

NASDAQ 100 Daily Chart<\/h3>\n

This NASDAQ 100 Daily chart highlights the upside price trend that originated a bottom just as the US Fed initiated a massive stimulus program.\u00a0 Weakness in the market, from a technical perspective, is still the overall trend because of the move away from the February highs.\u00a0 At this point, even if the markets continue to rally, we would need to see a substantially higher price move to establish a new bullish trend.\u00a0 Yet, as long as price stays above the RSI price channel and the relatively low price channel on this chart, the upside potential is higher than the downside price trend we have been predicting.<\/p>\n

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SPY Daily Chart<\/h3>\n

This SPY Daily chart highlights the same type of setup.\u00a0 We can easily see the minor rotation in price last week which prompted us to issue a warning that price may be turning lower near key Fibonacci levels.\u00a0 Yet, early this week stock prices pushed higher \u2013 even as far weaker global economic data was published.\u00a0 As long as this upward trend holds, price should continue to move higher.\u00a0 If it breaks below these price channels we\u2019ve highlighted on this chart \u2013 look out below.<\/p>

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At this point, it appears the market is more about a battle between the US Fed and the global central bankers dumping capital into the market to prevent a greater price collapse vs. the data that is starting to support a global economic collapse that may be bigger than the 2008-09 credit crisis.\u00a0 Currently, it appears global traders and investors are banking on the central bank\u2019s capacity to pour capital into the markets to suppress risks that appear to be growing.<\/p>\n

The next series of charts highlight the US economic data as we are just entering a reporting period that reflects the contraction in the US and global economies.\u00a0 Pay attention to this data and the scope of the collapse compared to the 2008-09 crisis event.<\/p>\n

Redbook Retail Sales Index (WoW)<\/h3>\n

This first chart is the Redbook Retail sales index (WoW) data.\u00a0 The collapse this week and last is far greater than the lowest levels in 2008~09.<\/p>\n

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https:\/\/www.investing.com\/economic-calendar\/redbook-911<\/figcaption><\/figure>\n<\/div>\n

Richmond Manufacturing Index<\/h3>\n

This next chart is the Richmond Manufacturing Index \u2013 again, the newest data is near twice as deep as the 2008-09 credit crisis levels at their deepest levels. Remember, we are just starting to see the data from the Covid-19 virus event.<\/p>\n

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https:\/\/www.investing.com\/economic-calendar\/richmond-manufacturing-shipments-1510<\/figcaption><\/figure>\n<\/div>\n

US Quarterly GDP Data<\/h3>\n

This next chart is the US Quarterly GDP data.\u00a0 The -4.8% level is deep, but still a bit away from the -6.3% level that happened in the 2008-09 credit crisis.\u00a0 Yet, we believe the Q2 GDP data could offer a number below -8~10%.<\/p>\n

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https:\/\/www.investing.com\/economic-calendar\/gdp-375<\/figcaption><\/figure>\n<\/div>\n

Pending Home Sales Chart<\/h3>\n

This Pending Home Sales chart confirms a very broad contraction in home buying activity.\u00a0 In the midst of the 2008-09 crisis, this data printed a -29.9% data point in July 2010 \u2013 well after the bottom in the markets had completed.\u00a0 We believe the next few months will present even deeper sales data.<\/p>\n

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https:\/\/www.investing.com\/economic-calendar\/pending-home-sales-232<\/figcaption><\/figure>\n<\/div>\n

Real consumer spending<\/h3>\n

Real consumer spending has collapsed.\u00a0 Consumer engagement makes up a large portion of all global GDP numbers.\u00a0 As long as consumers stay away from normal activities, the global GDP levels will continue to contract.<\/p>\n

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https:\/\/www.investing.com\/economic-calendar\/real-consumer-spending-914<\/figcaption><\/figure>\n<\/div>\n

Concluding Thoughts:<\/strong><\/h3>\n

From a technical standpoint, at this point, as long as price continues to track within the upward sloping price trend, the bullish trend may continue for a bit longer.\u00a0 Once price breaks below this channel though, look out below.<\/p>\n

Our longer-term price modeling systems continue to suggest price is still in a Bearish price trend and this move is a bullish price recovery in a bearish price trend.\u00a0 Time will tell if the markets have enough resilience to push higher even further.\u00a0 We believe the data is pointing to a very real potential for a new bearish price trend to emerge.<\/p>\n

As a technical analyst and trader since 1997, I have been through a few bull\/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is an incredible year for traders and investors.\u00a0 Don\u2019t miss all the incredible trends and trade setups.<\/p>\n

Subscribers of my\u00a0Active Swing Trading Newsletter<\/strong><\/a>\u00a0had our trading accounts close at a new high watermark. We not only exited the equities market as it started to roll over in February, but we profited from the sell-off in a very controlled way with TLT bonds for a 20% gain.\u00a0This week we closed out SPY ETF trade taking advantage of this bounce and entered a new trade with our account is at another all-time high value.<\/p>\n

Ride my coattails as I navigate these financial markets and build wealth while others watch most of their retirement funds drop 35-65% during the next financial crisis.<\/p>\n

Just think of this for a minute. While most of us have active trading accounts, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during the next bear market, you could lose 25-50% or more of your net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade\/position.<\/p>\n

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my\u00a0Passive Long-Term Investing Signals<\/a><\/strong>\u00a0which we issued a new signal for subscribers.<\/p>\n

Chris Vermeulen
\nChief Market Strategies
\nTheTechnicalTraders.com<\/u><\/a><\/strong><\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

By TheTechnicalTraders\u00a0 – This portion of our continued research into the Covid-19 virus event, one of the greatest disruptions to the global economy over the past 50+ years, concludes in this article.\u00a0 In Part I of this article, we highlighted how price factors and economic data continue to suggest the US and the global stock […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-169778","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/169778","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=169778"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/169778\/revisions"}],"predecessor-version":[{"id":169809,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/169778\/revisions\/169809"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=169778"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=169778"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=169778"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}