Tuesday, May 10, 2011

Another useless piece of data

Investor Business Daily (IBP/TIPP) Economic Optimism Index
Like the PMIs, a reading over 50 indicates a positive outlook while a reading below 50 signals a negative outlook. There's no chart on this one per its description on Bloomberg, but you can see above that for the overall index the current one is the 2nd worst reading since August 2010, better only than last month's data. And the index was above 50 for 2 brief months (Jan-Feb) and now it is like FLO RIDA's track again: "Low, low, low"

With the red underline are the 'worse' than current readings. Two for 'Economic Outlook' (the previous 2), out of 10.

*Disclaimer: charts and data are presented as I receive/see them. Sources are usually not checked for validation and my own calculations are of 'back of the envelope'-type. I am aware that some math that I do myself might be wrong and/or misleading to some extent. In financial markets the rate of change of economic data is often more important than the actual level and the perception of 'what is priced in' is more important than 'what is actually going to happen'. This is actually the way people pick entry and exit points. So... yes, sometimes you might say 'This guy is an idiot, this is way wrong!' with a high conviction, being right. Not to worry. Markets are made of expectations and the clash of conviction between its participants. Portfolio managers know that being an idiot is sometimes profitable and being smart is often a bad choice. It is all reality, sometimes good, sometimes bad. By the way: corrections to my analysis and intelligent debate is welcome. theintriguedtrader AT gmail do com

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