Applying Trend and Technical Tools to NFP

Saturday, September 15, 2007 | 09:33 AM

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.


Larger chart:091107_pring01.gif


Larger chart: 091107_pring02.gif


Larger chart:  091107_pring03.gif


Larger chart: 091107_pring04.gif

Very interesting approach . . .

Trading Nonfarm Payroll Charts
Martin Pring
RealMoney) 9/11/07

Saturday, September 15, 2007 | 09:33 AM | Permalink | Comments (7) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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The economy continues to struggle. The Retail Sales y/y % change declined.
I have posted charts about Industrial Production approaching a critical level. I plotted it against Real Durable Goods Consumption, which leads IP at turning points.

Posted by: will rahal | Sep 15, 2007 9:47:23 AM

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