Study: Heavy Truck Sales is sending a bullish sign for the stock market


As you probably already now, Heavy Truck Sales recently made a new high for this economic expansion.
Heavy Truck Sales is a leading indicator for the U.S. stock market and economy because large ticket items are usually leading indicators. Heavy Truck Sales tends to trend downwards before an equities bear market or economic recession begins.


I think that Heavy Truck Sales will continue to trend higher in this economic expansion. But let’s assume the worst case scenario. Let’s assume that Heavy Truck Sales have peaked for this economic expansion.
Here’s what happens next to the S&P 500 (U.S. stock market) when Heavy Truck Sales peaks in each economic expansion.

Let’s look at these historical cases in detail.
April 2006
After Heavy Truck Sales peaked, the stock market rallied for another 1.5 years until it began a bear market.

November 1999
After Heavy Truck Sales peaked, the stock market rallied for another 9 months until it began a bear market in earnest.

November 1988
After Heavy Truck Sales peaked, the stock market rallied for more than 1.5 years before it began a “big correction”.

August 1980
After Heavy Truck Sales peaked, the stock market rallied for another 3 months before it began a “big correction”.

December 1978
After Heavy Truck Sales peaked, the stock market rallied for more than 1 year before it began a “big correction”.

March 1973
After Heavy Truck Sales peaked, the stock market was already in a bear market.

Conclusion

I believe that Heavy Truck Sales – a leading indicator for the stock market and economy – will continue to trend higher.
But even in the worst case scenario (Heavy Truck Sales has already peaked), the stock market will probably continue to trend higher. Th stock market usually begins a “big correction” or bear market at least a few months after Heavy Truck Sales has peaked.
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