THE NUMBERS DON'T ADD UP

Something I learned long ago was the Economy and the Stock Market are two very separate entities. Normally they correlate and we have an expanding economy and as stocks prices climb an expanding stock market capitalization and everyone is happy

I always try to be on the right side of the market by noticing if both the economy and stock market are expanding at the same time.  When one is expanding and the other is contracting I get worried.  When both are contracting I panic and sit out the next few dances.

On August 20  The Conference Board released their monthly  report on their Leading and Coincident Economic Indicators:  Conference Board LEI Press Release

In that report they said the Leading Economic Indicators DECLINED by 0.2%,

My proxy for the Stock Market is the Value Line Arithmetic Index, an unweighted index of the 1700 stocks followed by the Value Line Investment Survey which in aggregate contains over 95% of the entire US public companies' capitalization.

Look at this chart:

Look at these Barchart Technical indicators:

• 96% Barchart technical sell signals
• Trend Spotter sell signals
• Below its 20, 50 and 100 day moving averages
• Weighted Alpha Negative 10.07
• 12.65% off its 52 week high
• Relative Strength Index 31.41%
• 50-100 Day MACD Oscillator Sell signal

My interpretation of these numbers is the Economy is contracting and the Capitalization of the Stock Market is contracting.

I don't know about you but I'm comfortable with my cash position and will sit on the sideline till these two indicators reverse.