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The last time the leading index fell for five straight months was in early 2001, at the beginning of the last economic recession.
Of the 10 leading indicators most often watched, five fell in February. These included jobless claims, building permits, delivery times, consumer expectations, and stock prices.
Four indicators including the real money supply, interest rate spreads, orders for capital goods, and orders for consumer goods, rose. The factory workweek was unchanged.
It is likely that the Fed's efforts to stimulate the economy boosted the money supply. The question is whether such efforts will add sufficient fuel to the economy to keep us out of recession, or whether those efforts will further devalue the dollar and stifle growth through price inflation.
There are a lot of question marks out there, which is what is causing the turmoil and volatility within the markets. Should we get long in expectation of the next rally, but risk further capital erosion? Is the safety of cash a better play, even with the risk of seeing our capital eroded by the falling dollar and dismally low interest rate? Plus, we might be missing the next run...
That is the mental puzzle many investors are currently playing out in their own minds. The good news is that there are ways to grow your capital right now, and you can do it without undue capital risk or reliance upon individual stocks.
I announced this a few days ago, but considering the up and down sessions we have seen this week I thought I would again invite you to download this ETF report, if you have not already done so.
It's about 57 pages long, but well worth the read. It should give you some pretty good ideas about how you might manage things going forward, no matter what the market does....
Trade well!
Christopher Smith
TheOptionClub.com
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