"Industry recession signs"

This was the report title I saw today at CNBC. The latest economic data is about the trucking orders in Oct, which is down 46% year over year. And the reporter was asking whether this was another sign adding to the growing concern of a recession. So why is this important for the economy? Well, you may not ask this question if you understand in the US, 70% of goods are moving around via trucks. When transportation companies' order of trucks plunges in such a scale, there is no other reason but the demand for goods transportation is plunging as well. Will this be a good sign for the economy? This is really a leading indicator that the economy is significantly slowing down and we may very likely on the path to a recession next year.


I think the stock market, famous for predicting future directions, seems to have warned us for months. Since July when the market broke out, which was cheered by most people as a sign for next leg up, the momentum indicator (MACD) is telling a different story. For all the months since then, it is consistently moving down, a negative divergence questioning the strength of the uptrend. Now S&P is sitting on the 200 day moving average, a spot where logically a rebound should be expected. In the normal time, it is quite possible as we are entering a bullish season often with year end rally, but with the very muddy election ongoing, I'm not sure if it can stay above the 200 DMA following the election just 2 trading days left (see more thought tomorrow on this). If it break out to the downside, then 2040/2000 will be its next stop. Eventually I think much more downside is ahead of us moving into next year, especially if a recession is indeed striking.






Folks, we are not at a time that will be responding well to higher interest rates and higher tax with more regulations. All our wealth is definitely at risk. Don't be complacent!!





By the way, I just saw a blog in a very easy-to-understand language talking about the differences between Trump and Clinton and the potential impact on US$, interest rates, and economy as well as the true reason why Wall Street including Buffett is so afraid of Trump's presidency. Highly recommend to take a look.