ClusterGains

People have been wanting to know the future since the beginning of time.  Concerning the stock market, there is an argument about whether the economy leads the market or otherwise that stocks lead the economy.  During the last two recessions, I have noticed that fundamental leading economic indicators actually turned up before the stock market did.

The periodic Conference Board reports involving leading economic indicators seem to be very accurate in predicting the near term direction of the general stock market.  If you will click on the Conference Board link above, you will be taken to an economic indicators page where you can click on various links to see how we are doing.  Then, on the U.S. indicators page, there is another link to a chart that visually shows what is happening in the economy.

For example, if you look on the 2009 chart, you will see that the LEI line started to turn up at the start of March while the stock market bottom actually occurred about ten days later in March.  So, I contend that watching the leading economic indicators will actually give you an edge on when to buy stocks or when to sit on the sidelines.