What’s the best leading indicator for the economy? That’s easy: The stock market.
Even so, other variables can also serve as leading economic indicators.
And, as you can see in the chart below, there are times when a measure such as the Conference Board U.S. Leading Economic Index can be valuable indeed… like right now.
Similar readings to today in the Conference Board LEI slightly preceded or accompanied all eight recessions since the 1960s but say little about its ultimate severity. Many economists today say they expect a recession, but most don’t see it lasting the full year and don’t think it will be so bad. But based on what? After all, these same economists didn’t even SEE a recession coming at the beginning of last year.
At EWI, we look at all these factors through the lens of the Elliott Wave Principle, which provides the backbone of our analysis.
The chart above was included in our December Elliott Wave Financial Forecast. To read the commentary – and the rest of the issue – check out our Financial Forecast Service.
If you’d like to learn more about the Wave Principle before diving into a service, our free digital copy of Elliott Wave Principle: Key to Market Behavior is a great place to start.