Selecting And Interpreting Leading Indicators by Roger Pilloton
Adjusting for the weaknesses of leading indicators so that you are able to select, interpret, and check their reliability.
Leading indicators play a major role in economic and stock market forecasts. For example, the index of
leading indicators calculated by the U.S. Department of Commerce is widely published every month. It is
closely studied by economic professionals. It influences, directly or indirectly, the actions of millions in
many fields, including politics, business and finance. It is closely watched because the peaks and valleys
of its curve often precede those of the U.S. economy by several months. The index, theoretically,
forecasts the starts and ends of recessions.