Comments on: Real-Time Information

By: James Dailey

James Dailey — Tue, 30 Jun 2009 03:07:56 +0000

Thanks – great analysis. I would simply say that ECRI is not solely the WLI. They have publicly stated that it was the recent sequence of the long leading index (which does not include stock prices) bottoming followed by the WLI bottoming which is followed by a stock market bottom, that is the high probability sequence for forecasting a recovery. They also rely upon moves being pronounced, persistent and pervasive in order to try and reduce the odds of false signals. No-one has a crystal ball, but I think ECRI’s methodology is the closest I’ve found to be deterministic and non-linear in forecasting economic cycles.

By: reality

reality — Sat, 27 Jun 2009 12:55:19 +0000

James, I offer the following analysis for your consideration:

“In summary, ECRI WLI movements probably coincide with or slightly trail stock market behavior, offering no significant trading intelligence over the short or intermediate terms.”

http://cxoadvisory.com/blog/internal/blog4-09-09/

By: James Dailey

James Dailey — Fri, 26 Jun 2009 12:59:39 +0000

While no single indicator is every omnipotent, ECRI has expressed that their long leading index and WLI bottomed last fall and are now at 2-3 year highs. This implies the economy will be recovery during the 2nd half of this year. Importantly, their leading indicator for the global industrial sector is very robust to the upside. They are also careful to point out that a cyclical recovery is not mutually exclusive with the long term structural problems of debt in the economy which will take many years to play out. Given their track record, I’d be careful going against their forecast.

Of course financial markets do not equate to the economy, so this is not a market forecast!