Brian Kelly

S&P 500: Perception vs. Reality

Thanks for your comment.

In my effort to simplify, I fear I may have made it more complicated. The charts do show the diffusion index. What I was attempting to show was not absolute price increases/decreases, but the fact that the diffusion indexes track S&P earnings very closely.

The implication being, that the negative numbers for the diffusion indexes could forecast declining margins.

Hope that helps!

On Feb 18 03:46 PM AJB7 wrote:

> I thank Brian Kelly for drawing our attention to out of the way data
> that appear to have special forcasting properties. Unfortunately
> in this case looking at the source data (www.newyorkfed.org/sur...)

>
> I cannot find any of the corresponding data series that match this
> chart. First, the title of the chart is slightly misleading it seems
> to me since the Fed data are only showing whether the prices paid
> or received are decreasing, increasing or have no change. They are
> not strictly recording the price itself. Thus a respondent may report
> prices received are declining and prices paid are increasing, but
> this does not mean that the prices received are actually below those
> paid. Also, the only series on prices that shows negative values
> are the diffusion indices, but these do not match those shown in
> the chart. So something is seriously amiss here. Nice chart, but
> please clarify what data you are actually reporting.