Can we see into the future?

I found (actually my intern found it and showed it to me) an interesting article a minute ago, it is a chart of the S&P 500 and the NAHB housing index charted together. The S&P 500 is known to lag the housing market by about 12 months, with a near 80% correlation (which is pretty strong).

We all know what the housing market is doing and what it is likely to do in the near and mid-term future. This chart suggests that the market is going to tank within the next year, as the housing market is doing now. With the current data coming out showing this is likely the case, it seems that this correlation is only going to get stronger in the near future. Add that to the Feds interest rate hike campaign that lasted so long, we could easily see a recession looming on the horizon if the Feds over did it.


http://www.safehaven.com/article-5772.htm