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Kirk Lindstrom has an engineering degree from the University of California, Berkeley. Following 20 years of research and development as a scientist and engineer at Hewlett Packard, Kirk turned his attention to investments where he edits "Kirk Lindstrom's Investment Letter," that... More
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  • ECRI WLI & WLI Growth Higher for Second Straight Week 1 comment
    Aug 13, 2010 10:54 AM | about stocks: SPY, DIA
    Posted earlier today as ECRI's WLI and Growth Move Higher at Kirk's Market Thoughts.

    ECRI's WLI and WLI Growth Rate Both Up

    The Economic Cycle Research Institute, ECRI - a New York-based independent forecasting group, released their latest readings for their proprietary Weekly Leading Index (WLI) this morning. (More about ECRI)
    For the week ending August 6, 2010
    • WLI  stood at 122.4, up from the prior week's revised (lower) reading of 121.7.  The lowest readings for WLI this year was 120.6 for the week ending July 2 and 16.
    • WLI growth moved higher for the second week in a row to minus 9.8 percent from minus 10.3 percent a week ago.  
    Chart of WLI and WLI growth vs GDP Growth
      Click to view full size chart
     
    Since ECRI releases their WLI numbers for the prior week and the stock market is known in real time, you can often get a clue for next week's WLI from the weekly change in the stock market. 

    Chart of WLI vs S&P500
      Click to view full size chart
    More S&P500 Charts and SPY Charts

    Chart of WLI vs DJIA
      Click to view full size chart
    More DJIA Charts

    Notes: 
    1. The WLI for the week ending 8/13/10 will be released on 8/20/10.
    2. Occasionally the WLI level and growth rate can move in different directions, because the latter is derived from a four-week moving average.
    Before you claim understanding of ECRI's WLI, make sure you read the article  "ECRI Weekly Leading Indicators Widely Misunderstood."
    "Bottom line, neither the “experts” predicting that the sky is falling based on the WLI, nor the other “experts” indulging in misinformed WLI-bashing in an effort to discredit the super-bears, have a real clue to what the WLI is all about...  A slowdown in U.S. economic growth is imminent, but a new recession is not." 
    Disclosure:  I am long SPY (charts and quote) in my personal account and in the "Explore Portfolio" in  "Kirk Lindstrom's Investment Letter."


    Disclosure: Long SPY
    Themes: ECRI, economy Stocks: SPY, DIA
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Comments (1)
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  • Hmmmm, think one can smell the "bull burgers" cooking away and shriveling in size on the BBQ this week. If left on the grill they could shrink another 5,10, 15% or so in the next few weeks and if the heat is turned up (margin calls), they might even begin to look like burnt toast.
    13 Aug 2010, 06:29 PM Reply Like
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