While it’s not the only economic indicator out there worth watching (heck, it’s not even an economic indicator), I’ve become a big fan of following the Conference Board’s consumer confidence figure. It’s hardly a scientific piece of data – it’s just an opinion poll taken by consumers. Yet, I’ve found the data to be stunningly correlated with the direction of the market. That’s why I’m finally getting around to showing it to you today… the trend is on the rise.

That ‘trend’, of course, has taken a few months to develop. Despite what the talking heads on TV say when the data is announced each month, the month-to-month data means very little. To do you any good, you at least need a few months of confidence data to get a true feel.

In any case, I’ve compared the S&P 500 to the consumer confidence reading for the last several years. When the confidence trend started to rise, I marked it with a blue up arrow. When confidence started to fall, I marked it with a red down arrow. It’s amazing how well those turns in confidence caught the market’s major turns as well.

Now I know what you’re thinking….. no big deal – it’s just a coincidental indicator. And, you’re right – that’s all it is. Where this consumer confidence analysis stands out is that it works as a coincidental indicator far more reliable and consistently than most other so-called coincidental indicators.

Bottom line? We have to be bullish based on the current trend, and the chart’s history. That’s not a daily or even weekly call though, as the trends this data foretells is measured in months or years. Here’s a full-screen version of the chart

Consumer Confidence

.

By the way, this is just one of several important charts I’ll be going over in today’s webinar. See the details below, or in Thursday evening’s e-mail.