CPI x SPX x Inflation

Here is a chart that shows the correlation between the market (SP500) Inflation and Jobless numbers. Jobless numbers is the golden indicator of economic strength though there are many others I look at, and many more economists look at. For our purposes, Jobless numbers show the strength of the economy. We want a LOW number. We can see jobless numbers have been on a slow decline since the pandemic with a slight curve up over the last 2-3 months. Just like with stocks, we want to use our moving averages (One of our TOP indicators) to see if we have broken a trend. We can see with the Jobless numbers, the 50 day moving average is below the 200 day. This typically means bearish but keep in mind low = good with jobless numbers. So we actually WANT the 50 below the 200. The easiest way to remember is the 50 days relationship to the 200 determines the short term trend. If its above, the etf/stat is heading up. IF its below its heading below. Simple. Using this logic, the jobless numbers are in bullish territory. Inflation is a metric we want to see head lower. Its quite apparent its on a rampage. This is bearish for the market outlook as eventually, if left uncontrolled, this will impact businesses bottom lines and show in earnings.. The market is heading down as we can see. So in summary, the economy is strong but inflation is rampant. The strongest relationship we can see is between inflation and the market. We know this is the number one market mover right now.