Applying Trend and Technical Tools to NFP

Fascinating set of charts via Martin Pring at Real Money, applying trend following and technical analysis to NFPs.

"Technicians assume that markets move in trends and that once a trend begins, it remains in force until enough indicators prove that it has reversed.

Trends, of course, can range from intraday trends to secular trends extending over several decades. Obviously it’s not possible to apply intraday analysis to economic data, because most of this information is published on a monthly basis.

To monitor these cycles in nonfarm payrolls, I decided to divide each monthly data point by a 12-month moving average. The great thing about a 12-month average is that it eliminates any seasonal biases. The result is the indicator plotted at the bottom of the first chart."

Here are 4 of Pring’s charts on the issue. They are rather instructive.

091107_pring01

Larger chart:091107_pring01.gif

091107_pring02

Larger chart: 091107_pring02.gif

091107_pring03

Larger chart:  091107_pring03.gif

091107_pring04

Larger chart: 091107_pring04.gif

Very interesting approach . . .

Source:
Trading Nonfarm Payroll Charts
Martin Pring
RealMoney) 9/11/07
http://www.thestreet.com/p/rmoney/technicalanalysis/10378989.html

Category: Economy, Employment, Technical Analysis, Trading

Bull and Bear

Category: Markets, Psychology

Off to Forex Trading Show

Category: Trading

Greenspan’s Legacy

Category: Credit, Derivatives, Federal Reserve, Investing, Real Estate

Open Thread II: What happens when the Fed cuts?

Category: Commodities, Economy, Federal Reserve, Psychology

The Fine Line Between Investment Grade and Junk

Category: Credit, Derivatives, Federal Reserve, Financial Press, Hedge Funds, Psychology, Real Estate

Real Estate Inventory Still Building

Category: Credit, Data Analysis, Psychology, Real Estate

Goldilocks is Now “Officially Dead”

Category: Economy, Markets, Psychology

Open Thread: Falling Dollar, Rising Gold, Oil, Inflation

Category: Commodities, Energy, Federal Reserve, Inflation

The Widening Gap Between the Rich and the Super-Rich

Category: Psychology, Taxes and Policy, Television