Does SPX vs PMI divergence signal upcoming recession?
No, not really. Only 3 of 7 divergences signaled recessions in the last 50 years. Besides, some recessions did not have any divergence.
So data doesn't support the recession is coming thesis.
Red flag -> Divergence with recession following
Green flag -> Divergence w/o recession
? -> No divergence signal before recession
(This post is in response to some comments I received)
So data doesn't support the recession is coming thesis.
Red flag -> Divergence with recession following
Green flag -> Divergence w/o recession
? -> No divergence signal before recession
(This post is in response to some comments I received)
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