CHART OF THE DAY: Here's The 'V' That Impaled The Shorts, And It's Growing

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This was today’s most important data point to pay attention to — the Conference Board’s Leading Economic Index (LEI). 

It rose 0.3% in January, after rising 1.2% and 1.1% in December and November respectively. This is shown by the red line below.

The LEI has been rising for 10 straight months, and had a critical inflection point right before the gigantic market rally of 2009. It also correctly began to dip before the U.S. entered recession in December 2007. Simply put, you made a lot of money listening to it recently, and historically it’s one of the few reliable forward indicators that exist.

While today’s January release was slightly weaker than the 0.5% rise expected by many analysts, it nonetheless continued the LEI’s important uptrend. We also shouldn’t forget that the LEI is currently higher than at any time in many years — which means that we can count on growth to hold up at least through the first half of 2010 just based on where the economy is now.

Economist Ken Goldstein @ The Conference Board: “The cumulative change in the U.S. LEI over the past six months has been a strong 9.8 per cent, annualized. This signals continued economic recovery at least through the spring.”

It’s even so high right now that the index could drop a bit in the future, which seems inevitable given the spike, but still augur future economic growth. Anyone short ignores this ‘V’ at their peril:

chart of the day, The Conference Board Leading Economic Index (LEI)

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