Although the S&P 500 has managed to break through its short term obstacle, setting up a Bear Market Rally, the fundamental picture darkened just a bit more over the weekend.

The Economic Cycle Research Institute (ECRI) is now calling for a recession. While there is a chance that they are wrong, the ECRI has a pretty impressive track record both for calling the major turns in the economy and for not issuing false alarms. For those of us without a full membership, we need to rely on articles from the New York Times. But, the ECRI calls are generally ahead of the pack so even hearing about them a few days late puts one ahead of market concensus.

ECRI Weekly Leading Indicator

Source: ECRI

As you trade the Bear Market Rally, be ready to head for the exits as soon at momentum starts to fade.

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