Charting Stocks

News Flash! Recession Started a Year Ago Says NBER

It must be exciting to be an economist at NBER (National Bureau of Economic Research) who just recently announced that the US has been in a recession for a year. I wish I could find a job which entails telling people what happened in the stock market last year .

The NBER now claims that the recession began in December 2007 which was right around the time that all technical indicators were blinking red with sell signals. The chart above shows the S&P 500 along with two of my favorite technical indicators – RSI (above the price) and MACD (below the price). Both the RSI and MACD gave sell signals a bit earlier than the trend break in the S&P 500 which occurred in December 2007 (The same time that NBER now tells us that a recession started).

Market Technicians (chartists) didn’t need to wait a year to see that. Unlike the NBER, we don’t have the luxury of looking back a year to make market decisions.

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