Email of the day (1)
Comment of the Day

October 27 2011

Commentary by Eoin Treacy

Email of the day (1)

on the trucking activity in the USA:
"The Ceridian-UCLA Pulse of Commerce Index measures fuel usage by truckers in the US, deriving the data from credit card purchases of diesel fuel by truckers. This index has consistently been excellent in forecasting both downturns and upturns in the US Economy (see attached pdf for details) and is currently rolling over, and doing so during the pre-Christmas inventory build-up season. This index is computed much more real-time than most data collection methods. Unless the trend turns up soon, this would suggest the US Economy is continuing to worsen. Additional data may be found at

"The most recent LA and San Diego ports data also confirm the trends seen by the Ceridian-UCLA PCI.

"This data strongly suggests another recession (as if the old one ever ended in reality) or at least bloody slow US economy is ahead."

Eoin Treacy's view Thank you for highlighting this index which I'm sure will be of interest to subscribers. The US economy remains a concern for many investors and the perception of growth potential remains low, particularly when high unemployment and consumer deleveraging are considered. However economic statistics have been surprising to the upside of late and markets had been discounting an apocalypse so there is potential for a continuation of the current rally.

The S&P 500 Index has staged an impressive rally over the last almost four weeks following the failed downside break earlier this month. It pushed above the 200-day MA this week and today move back up into the overhead trading range. Following such a swift rally a pause and consolidation cannot be ruled out but provided it can hold the majority of its recent advance, the upside can probably continue to be given the benefit of the doubt,

The Dow Transports Index retested its 2008 peak from April, failed to hold a new high in July, broke the progression of higher reaction lows in August and fell to test last year's low near 4000. It has also rallied impressively this month and pushed back above the 200-day MA today. It is a little overbought in the very short-term, suggesting a pause and consolidation cannot be ruled out. A sustained move back above 5000 would lend additional credibility to a recovery hypothesis.

Back to top