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A "Last Gasp" Growth Rate Spike
in the US Economic Rebound is
Further Confirmed and is More Bearish
Timing for the Stock Market
by Bob Bronson
Bronson Capital
Markets Research
February 3, 2004
The first
chart below illustrates
the three-month moving average and
November peak in the CFNA Index,
which is more of a coincident business cycle indicator. Last
Thursday's reported
December data is back below
the September level
of economic expansion, following which we opined it
was confirming the
“last gasp” growth rate spike in
third quarter
GDP, and thus the beginning of the
end in the US economic rebound.
This
probable growth rate peaking of the economic rebound is also
reflected by the ISM
index peak (second
chart below),
which has just been updated with ISM's just reported
revised
data for the past four years. The revised three point
(300 basis points) drop from
the mid-66's to the mid-63's has gone unnoticed by the financial media
in their reports
today, but the 16% decline in the rate of expansion (from the 50
neutral level) in
the manufacturing sector further confirms our bearish analysis for
the stock market.
We re-emphasize the "last gasp" growth rate spikes timing parallel with January 1973 ISM Index, which presaged the C down leg of that ABC zigzag BAAC Supercycle Bear Market.
See http://www.financialsense.com/editorials/bronson/103103.html
© 2004 Bob Bronson
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Bob Bronson
Bronson Capital Markets Research
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February 3, 2004