Politicians love to rub this in your face.
Unemployment figures are at a record low right now in the US.
That is good news, but…
Here’s the shocking truth those politicians do NOT want you to know.
Let me explain. Take a look at this chart:
The above chart shows the unemployment numbers from 1994 to 2018. I have circled in RED when unemployment was at a major low, and in GREEN when unemployment was at a major high (HINT: notice the years!).
Now take a look at this chart of the Stock Market (the S&P 500) and notice the corresponding RED and GREEN points on the chart:
You will see an undeniable and self-evident truth:
When every major stock market crash has started, the unemployment numbers have always been very low.
Both the years 2000 and 2007 saw record LOW unemployment numbers – and each of those years saw the beginning of a terrible stock market crash.
By the way, notice that the HIGHEST levels of unemployment were reached in the years 2003 and 2009 – exactly when the stock markets bottomed and started a BULL market!
This should come as no surprise to anyone.
Trying to predict the future of the stock market by looking at unemployment figures is a bit like driving by only looking at your rear-view mirror – it is worthless and dangerous.
And yet this is precisely the cunning game many politicians play with us.
They say: “Look at these amazingly low unemployment numbers! The economy is doing great! The stock markets can only go up!”.
Now, don’t get me wrong.
It is a GOOD thing that unemployment numbers are low. We should be happy that people can find jobs.
All I am saying is that economic figures like unemployment numbers are NOT GOOD predictors about the future of the stock market.
Right now in 2018, we are seeing record low numbers of unemployment in the US.
This does NOT mean that the stock markets are about to crash.
In fact, it is perfectly possible for the unemployment numbers to stay low and keep falling before the stock market finally reverses direction and crashes.
And that could be months or possibly years from now!
You can see that we cannot use economic numbers like unemployment to make predictions about the future of the stock market – despite what the politicians in Washington DC want you to think!
And as I’ve explained this month, as long as the stock markets remain ABOVE their February and April lows, the odds still favour a bull market, and not a bear market.
We will continue to use the charts to make better and more reliable predictions.
For more up-to-date analysis of the markets, join us on www.leadingtrader.com.