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Here is a pair of new charts I'll be adding to my weekly update on the ECRI Weekly Leading Index. These charts overlay the WLI and the market as represented by the S&P 500. The first shows the correlation since 1997 and the second is a close-up of the correlation since 2006.
Some Observations
The ECRI WLI growth metric has tended to lead the market, but the correlation is, like with the broader economy, imperfect. The gradual WLI decline in 2007 preceded the market top in October of that year, and it began its upturn well in advance of the bottom in March 2009. Likewise the WLI reversal from its high in October 2009 came over six months before the interim market high this past April.
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