What Happened The Last Four Times That US Macroeconomic 'Surprises' Hit A Three-Month Low?

Tyler Durden's picture

The last week or two has seen Citi's economic 'surprise' indicator (ECO) take a decided turn for the worse. At Friday's close, the index that tracks not just absolute performance of the major macro prints but their relative performance to expectations, had hit a three-month low. Since the top in the S&P 500 in late 2007, the 3-month rate-of-change has shifted significantly negative four times - and each of these times has been followed by a significant downturn (or change of trend) in the S&P 500. As of Friday's close, the ECO index's rate-of-change shifted negative (its most negative in 5 months) and has signaled a quite intriguingly divergent lower high (from Q4 2011' previous peak) compared to the S&P 500's higher high. Is the short-term drop in ECO due to 'cliff' indecision? Or will earnings season be the market's catalyst to realize the changing macro landscape?


Late 2009 saw a period of very unusual absolute stagnation in macro data (while QE1's liquidty lifted stocks) but once the rate-of-change pushed consistently negative, the top was in for stocks in mid 2010.

The blue dotted-line indicates the lower high that macro data has shown during this latest cycle (as opposed to higher high in equities)


Chart: Bloomberg

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zorba THE GREEK's picture

Charts, charts, charts. It doesn't take a chart to see that equities are overpriced.

People have less money to spend and in a 70% consumer driven economy, that

means lower sales and lower stock prices.

Michaelwiseguy's picture

Alex Jones on that limey Brits show Piers Morgan CNN tomorrow night. I hope he rips him a new asshole.

Wear something sharp Alex, like a white Armani shirt and black jacket. Screw the tie.

Obadiah's picture

that cunt piers will just try to pimp him and alex knows

yogibear's picture

But Bernanke, the Federal Reserve and Wall Street has to keep elevating the prices to trigger the muppet's animal spirits.

Typical muppets start buying and Wall Street is dumping, until this occurs just keep elevating the prices.

Vampyroteuthis infernalis's picture

Let the broken markets crash already. This is beyond a farce!

boogerbently's picture

Charts, if they worked, no money would have been lost during the last recession.

They document past performance, not future performance.

MeelionDollerBogus's picture

Charts do work but few actually make their own, hence the problem.

If all you can do is let a basic chart feature produce squiggly lines & colorize it, what’s the point? You have to know what it means. Math is a powerful thing but if you just randomly select numbers & arithmetic operations, what did you expect to accomplish? You must act with purpose & that includes planning, planning includes charts & fundamental analysis.

Mine chart future performance,

goldpricemodel 2013 projection - goldpricemodel 2013 roc 52-week - 2012 apr 17 gold ROC trends | 52week ROC gold to 2400/oz

as before, 2012 11 05 277week ROC -goldpricemodel - 2012 09 18 277week roc 01 | goldpricemodel - http://stks.co/nAfJ - 2012 06 18 277week roc 02 goldpricemodel 2011 Jan to 2012 Dec 28

and even older, 2010 jul 03, also gold price model of 2010 Jun 29.


ball-and-chain's picture

The DOW will eventually climb to 30,000.

I shit you not.

Fraud in the system is that rampant.

Records will be shattered.


Snakeeyes's picture

Less money to spend, and Democrats talking even MORE taxes to fund their spending lust.

We are on a runaway train.


H E D G E H O G's picture

chart looks like the jaws of a zombie great white shark, and it'll probably feel like it too when it strikes, no?

HD's picture

All I ever hear is Ben is spending 85 billion a month so Primary Dealers have money to burn and nothing else to buy but equities.

S&P never goes down more than a couple percentage points. Short of collapse, what allows the market to correct 15 or 20% overriding the algos and Fed manipulations?

All responses welcome.



in4mayshun's picture

No more corrections. The bankers are in confiscation mode, as in collecting all the suckers money. They will continue this facade market as long as possible until it collapses. And you can bet their money will be in PM's and commodities when the reset button gets pushed.

Go Tribe's picture

Just tell me if this is good for gold and silver or not.

MeelionDollerBogus's picture

Only one thing is bad for currency-priced, currency-goal of sale, valuation of gold (silver, platinum, palladium): higher interest  rates (real in the market) and a real recovery of real-estate (e.g. see 3+ years of increasing home ownership without debt bubble, incomes to support). See it? No. Then stop worrying & BTFD

goldpricemodel 2013 projection

http://jessescrossroadscafe.blogspot.ca/2009_11_01_archive.html : http://3.bp.blogspot.com/_H2DePAZe2gA/Sw1D2pAN0_I/AAAAAAAAKkI/_LikN5B5CU...

also: http://www.zealllc.com/2012/realgold11.htm : http://www.zealllc.com/c2012/Zeal112312A.gif

drwillia1's picture

Trial period ends today. Please come in and take a look at the 2013 roadmap.


TheSilverJournal's picture

The markets, or at least the metals, will probably go up, not down, when the bad news starts to roll out. The bad news means more QE. So, once again, good news is bad news and bad news is good news.

Karlus's picture

Depends. Any fund holding GLD is likely to sell to cover equity margins.

Also depends on how quickly the decline in equities hits....

Might be smart to sit it out for a bit until we see big selloff. Remember, Au was 1630 just the other day...

tooriskytoinvest's picture

Taxes Going Up, Recovery Hitting A Pothole, Credit Downgrade Imminent,  NOW WE ARE HEADING TOWARD TO ANOTHER GREAT BOND MARKET MASSACRE And Investors Could Suffer More Than $1 Trillion In Losses, This Time Stocks Could Follow.


AccreditedEYE's picture

and to whoever just "-1-ed" me, BTFD You Idiot.

Karlus's picture

Dont stress the red. Its just the resident socialist weighing in. Look up in the chain, he hit everyone


Trust me, you will collect a lot more around here using Krugman talking points.

buzzsaw99's picture

-1 We don't talk about our junk ever.

AccreditedEYE's picture

Been so long since i posted Buzzy that i forgot...

tenpanhandle's picture

now that "BTFD" is rote, on to the next chant... "BTPB" (Buy the plunge baby).

Never One Roach's picture

I'm very pessimistic about 2013.


Otherwise, everything is fine.

Atomizer's picture

What happens when 9 million globalized china slaves are cut off from water supply? Shit doesn’t get shipped to US. Shiver me timbers Baltic index...



Ruh roh San Shinzo Abe

Ruanzongze: Shinzo Abe's strategy of "encircling China"



Atomizer's picture





Environment Pollution in China on Sunday, 06 January, 2013 at 07:13 (07:13 AM) UTC. 

Base data

EDIS Number: ED-20130106-37743-CHN 

Event type: Environment Pollution 

Date/Time: Sunday, 06 January, 2013 at 07:13 (07:13 AM) UTC 

Last update: --- 

Cause of event: 

Damage level: Moderate  

Geographic information

Continent: Asia 

Country: China 

County / State: Province of Hebei 


City: Handan 

Coordinate: N 36° 37.536, E 114° 32.345 

Number of affected people / Humanities loss

Foreign people: Affected is unknown. 

Dead person(s): --- 

Injured person(s): --- 

Missing person(s): --- 

Evacuated person(s): --- 

Affected person(s): 9 000 000 

Joe moneybags's picture

I have no idea what the Chart charts, and what signals it is possibly offering.  Why post such an ambiguous collection of data?

luna_man's picture



Nice chart, MY MAIN MAN!...


How else will they able to buy the"F'n Dip"!

JohnGaltsChild's picture

Now I get it.......................no, I don't.


one_fell_swoop's picture


awakening's picture

Web traffic fodder at best; like anything that touches on the 'divide and conquer' issues (young v old, guns v no guns, tax payers v welfare, etc...), it gets boring and repetitive very quickly.

But 'what right do you have to complain?' I hear, well constructive criticism (note that I called out why this article is rubbish, not that it just is) from the intended audience of a website is what ensures it sticks around and remain fresh and relevant. Keeping ones mouth shut OTOH (saying nothing and redirecting web traffic elsewhere being the same thing) would be more destructive in comparison and may perhaps even prevent having a best hits of 2013 page to rival the one from 2012 (unless people want ZH turning into the likes of Bloomberg, DailyMail, Yahoo News or other 'entertainment news' websites) - http://www.zerohedge.com/news/2012-12-30/2012-greatest-hits-presenting-m...

q99x2's picture

FED only got total control of the markets at the end of 2011. BTFD

SmoothCoolSmoke's picture

Alls I know is...... next BTFD opportunity is the Debt Ceiling. T-Pubs are already being told by their Masters to fold . The .1% does not want a 300 pt SP drop ala summer 2011.  In fact, there may not even be a dip to buy. 

lakecity55's picture

I hope, really hope, Alex brings a Louisville Slugger along.


smiler03's picture

This must be about the 28th ZH technical analysis that puts the S&P at 800 in a months time.


I'm still waiting.