These metrics look at stock market performance, often seen as a reflection of investor sentiment and, by extension, economic health.

Market highs are typically associated with optimism, increased investment, and a strong economic outlook, whereas market lows are linked to pessimism, reduced investment, and a poor economic outlook.

However, stock market conditions can also be influenced by factors not directly related to the economy, like geopolitical events.

While markets themselves are volatile, sustained trends in either direction can have an impact on both corporate and consumer behaviour.

In particular, market lows can discourage business investments and consumer spending, thereby feeding into a recessionary cycle.

Recession signal: 

This is time based, in the context of the yield curve inverting.

Based on the average of previous recessions, the stock market low is 18 months after the yield inversion starts. Disregarding outliers, there is a main grouping of previous recessions that lead to a market low of between 15 and 22 months after the inversion.

Almost every time, the market low is after the yield curve is no longer inverted, and has reverted back to normal.

The bottom of the market is always after the recession begins. 100% of the time.

In terms of price action, recessions tend to wipe out on average at least the last 2 years worth of previous market lows. So take a look back two years ago and see where the lowest point was. A recession likely takes us to below that.

How low beyond that point.. we’re not sure.

Track this yourself

You can find the S&P500 here:https://www.tradingview.com/chart/v7ZG3yMA/?symbol=SP%3ASPX