Something to keep in mind when reading this. Everything is correlated, either positively or negatively.
The “Sound Advice Risk Indicator”, an index derived from the ratio of the median price of a house and stock prices, is shouting a warning, according to this piece at MarketWatch:
This indicator, the brainchild of Gray Cardiff, editor of the Sound Advice newsletter, is derived from the ratio of the S&P 500 SPX, +0.21% to the median price of a new U.S. house. For the first time since the late 1990s, and for only the sixth time since 1895, this indicator has risen above the 2.0 level that represents a major sell signal for equities. (See accompanying chart.)
The five times are 1907, 1929, 1938, 2000, and today, each of them marking a recession.
Does it mean anything? Beats me. Things change. I do know that the values of the stocks that have been pushing the various indices up can’t be justified on the basis of their earning.
Throw a whole bunch o numbers in the pot, stir them and…..
OTOH, it is these kinds of interesting coincidences (what these usually end up being) that make life more interesting.
Steve