Here’s what the Chicago Fed National Activity Index (CFNAI) 3mo rolling avg looks like in a trailing time series….
Mr Dudley (NY Fed Prez), someone’s going to need to spike the punch bowl again by July-Aug. This forecast is based on the Greedometers, not the CFNAI. That said, we should expect a rolling 12mo sum of the 3mo avg of CFNAI to drop to -2.7 or lower by July-Aug.
Note: before things melted down last time it looked like this:
- Jul 2007 new all-time SPX & Dow highs
- Oct 2007 re-test those highs. Greedometer readings far lower than July 2007.(DING!)
- Dec 2007 economy enters recession. BEA (Commerce Department) first posts a public note we’re in recession at the end of October 2008 –after the global financial crisis and after the SPX had been nearly cut in half from 1560 to 800.
- Dec 2007: Rolling 12mo sum of the 3mo avg CFNAI drops to -2.12.
- Dec 2007: Wall St sees higher markets in 2008. link to Barrons article Dec 2007.