Is This The Key To Predicting Future S&P Movements?

As I have pointed out two separate times now, the coincident to lagging ratio has proved to be an incredible leading indicator.  To reiterate; “when the expansion is nearing its final stages both sets of indicators will be rising, but the increase for the coincident will be slower than the lagging hence the ratio will fall.”

As of 8/31 data, this ratio has now fallen for FIVE months in a row.  As the chart shows, a pretty high correlation (~93%) exists between this ratio and stock prices.

chart

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