Wednesday, October 14, 2015

A Worrying Signal......ANOTHER PESKY FACT!

A Worrying Signal

Understanding this diffusion index is straightforward. When the reading is positive, investors have little to worry about and should treat "dips" as a buying opportunity. When the reading is negative a US recession is a possibility. Should the reading fall below – 5 then it is time to get worried – on each occasion since 1981 that the indicator recorded such a level a US recession followed in fairly short order. Today this indicator reads – 5 which points to a contraction in the US, and more generally the OECD.

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