Tucson, AZ, May 05, 2010 --(PR.com
)-- The Schannep Timing Indicator & www.TheDowTheory.com Newsletter announced the significant increase in consumer confidence has a positive implication for the stock market in its recent monthly Stock Market Letter, according to Editor Jack Schannep.
Consumer confidence is important because 2/3rds of the American economy is impacted by the consumer. The Conference Board’s monthly index measuring the economic outlook of 5,000 households is considered a predictor of future spending, and hence economic growth. "Its actual record in that regard is suspect, at best, but what is of more interest to investors is its relationship to the stock market" (Schannep). Since the Index was created in 1967, it has fluctuated between 25 and 145, with 1985=100, seasonally adjusted.
The recent figure of 57.9 is 32.6 points above the historic low of 25.3 recorded in February of 2009. Every time in the past when there has been that much increase, the index has gone on to an average peak of 119.2, with the lowest peak level having been 87.2. That would imply that Consumer confidence will continue to rise throughout the remainder of this year and probably into 2011, no doubt buoyed by increasing employment as the economic expansion continues.
The important implication for the stock market is that investors can be comfortable that the bull market will continue advancing since consumer confidence is still at a relatively low level with more room to rise before reaching its average peak level. The average length of bull markets has been 33 months and thus far this one is only 14 months old. When consumer confidence finally reaches a top, the bull market in stocks will shortly be ending in anticipation of the next recession, which has always followed. This and other historic stock market and economic data is available in the free section of the Newsletter’s website at www.TheDowTheory.com.
About Schannep Timing Indicator & TheDowTheory.com Newsletter
Jack Schannep’s Market Letter started in 1977 written for brokers and colleagues at Morgan Stanley. It first became available to subscribers on the Internet in 1998 and now has subscribers in most of the United States and 17 foreign counties. It has the best record over the recent 3 years for investment results of the 70 stock timing Newsletters monitored by Hulbert Financial Digest. Schannep is rated Number One by CXOAdvisory.com for accuracy of forecasts for U.S. Stock Market. For more information, visit www.thedowtheory.com.