"I continue to value your output highly....even if I sometimes do not like what I read! I note that your tone has turned distinctly cautious.

"I would be most interested to hear your views on the ECRI leading indicators which I understand are taken seriously in the highest places, including the US Fed.

I paste below a Reuters news report dated yesterday, May 21st:

"(Reuters) - A measure of future U.S. economic growth fell to a 35-week low in the latest week, indicating a slowing of the recovery, a research group said on Friday.

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index slumped to 127.3 for the week ended May 14 from 132.0 the previous week.

That was the lowest level since Sept. 11, 2009, when it stood at 127.0.

The index's annualized growth rate fell to a 43-week low of 9.0 percent from
12.2 percent a week ago. That's the lowest level since July 17, 2009, when it stood at 8 percent.

"With WLI growth sinking further to a 43-week low, U.S. economic growth is set to start easing in fairly short order," said Lakshman Achuthan, managing director of ECRI."

"What is your take on it?"

David Fuller's view The stock market is one of those leading indicators, and I take the evidence seriously. Wall Street and many other leading stock markets enjoyed a 10 week rally into mid-April, recreating overextensions relative to the trend mean represented by the 200-day MAs. We were looking for a reaction but it quickly turned into a significant correction, due to a triple waterfall of new factors to worry investors, plus China's draining of liquidity which was already known. (See also Friday's stock market review and comments above.)