Depression Watch (Feb.23-Feb.19.2009)

{Dow}
(Thurs) =               7,182.08      88.81 (-)
(Wed) =                7,270.89      80.05 (-)  
(Tues) =                7,350.94      236.16 (+)     
(Mon) =                7,114.78      250.89 (-)
last week's range [7366, 7556] ; the difference = 190
last week's range (change) = [51, 298]
[Nov. 20 bear-market low of 7,552.29]

{VIX}
(Thurs)     =               44.66 (-)
(Wed)    =                  44.67  (-)
(Tues)  =                   45.49 (-)
(Mon)    =                  52.62 (+)
Normal   =                30 [3 +/-] {Best Fit Curve: Trig. function}
last week's wk-avg =  48.375
last week's range [47, 49]

{Oil}
(Thurs)     =             $44.46  (+) ;  
(Wed)       =             $42.31   (+) ;             
(Tues)    =               $39.85    (+) ;
(Mon)    =                $38.25   (-) ;     
last week's range [35, 39]

{Dollar Index}

(Thurs)     =              87.81 (null)  
(Wed)       =              87.81 (+)           
(Tues)    =               86.83 (-)
(Mon)    =               87.26 (+)
last week's range [87, 88]

{Baltic Dry Index}

(Thurs) =              1950            10 (-)
(Wed) =                  1960.00      50 (-)
(Tues) =                 2010.00      74 (-)
(Mon) =                  2084.00      15 (+)
last week's range [1846, 2099]

{NI225 - Japan}

(Thurs) =            7457.93      3.29 (-)
(Wed) =              7461.22      192.66 (+)
(Tues) =             7268.56      107.60 (-)
(Mon) =              7376.16      40.22 (-)
last week's range [7416, 7750]

{HK:HSI - Hong Kong}

(Thurs) =            12,894.94      110.14 (-)
(Wed) =             13005.08      206.561 (+)
(Tues) =             12789.60   385.50  (-)
(Mon) =              13175.10   475.93 (+)
last week's range [12699, 13456]

{BLS}

Unemployment =  7.6% (Jan.09)

*Red means out of range, below the lower bound
*Bold means out of range, above the upper bound

{Last Week}

Our current model is working well, significant moves outside the appropriate ranges are being identified. Understanding the use of ranges helps us filter out all the noise coming from the media, and focus solely on the numbers. It needs to be understood, that we are modeling a dynamic system and there is no prediction - there is only an approximation. The goal is the achieve the closest approximation.

We found that the DOW provided the closest approximation to the economy, and that while the VIX improved our understanding, it wasn't (and isn't) as sufficient as the range identification. As such, we removed the S&P 500 from our model (leaving the VIX). Next, we found that the Asian markets did have an effect on the DOW, so two markets were selected to track against the DOW. These are the Hong Kong : Hang Seng index and the Nikki. These markets have been added to the Dollar Index and the Baltic Dry Index.

{This Week}

A major change at DECB Economics is being made to add new features.

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