New durable goods numbers were released this morning and it shows a record 18.2% decrease in DG. This is in part due to the record surge in July with regard to air-craft orders that caused a spike in Durable Goods on the last report. The adjusted core DG sets at around +.7% this reporting period, when excluding air-craft orders last month.
One very important factor is the correlation between Durable Goods and the S&P 500 and the point where Durable Goods fails to track the almost linear increase in the S&P 500. This is what I call the Durable Goods and S&P 500 Death Cross.
Pay close attention to the points where Durable Goods fail to track the S&P 500. Every single time this has occurred over the last 20 years we have had a major market correction. Seeing that QE is set to taper off for good next month, or so it seems, that leaves only the fragile "
Considerable Time" language from the FED with regard to the increase in interest rates as a means to keep shoveling in that free money.
We believe this is a major indicator for the next, soon to come, market correction.