US economic indicators deteriorate, Dow Theory triggers sell signal

Reuters reports yesterday's market action:

Global stocks and the dollar fell sharply on Wednesday while the yen and government bonds soared as concerns for the health of the U.S. economy stirred another massive wave of risk averse investing.

Near-record oil prices also fanned fears that energy costs could crimp consumer spending.

There are good reasons to be concerned about the US economy. From Bloomberg yesterday:

The Conference Board's index of leading economic indicators fell 0.5 percent in October after a 0.1 percent increase that was smaller than previously estimated, the New York-based group said today...

Rising fuel costs and the housing slump spurred a drop in the Reuters/University of Michigan final sentiment index to 76.1 in November, the lowest level since October 2005, following Hurricane Katrina. The index was at 80.9 in October.

And from Reuters:

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 139.2 in the week ended November 16 from a downwardly revised 139.9 in the prior week, initially reported as 140.0...

The growth rate fell to minus 1.2 percent from minus 0.9 percent. This marks a 63-week low for the growth rate.

All is not lost for the stock market. Mark Hulbert suggested in an article recently that diminished corporate insiders' selling could provide some support.

And yet, after yesterday's market close just a few hours later, Hulbert had another article up pointing out that the Dow Theory has now triggered a sell signal.