A frosty Christmas Eve
when the stars were shining
Fared I forth alone
where westward falls the hill,
And from many a village
in the water’d valley
Distant music reach’d me
peals of bells aringing:
The constellated sounds
ran sprinkling on earth’s floor
As the dark vault above
with stars was spangled o’er.
Then sped my thoughts to keep
that first Christmas of all
When the shepherds watching
by their folds ere the dawn
Heard music in the fields
and marveling could not tell
Whether it were angels
or the bright stars singing.
–Robert Bridges, “Noël: Christmas Eve 1913”

Interpreting the endless stream of macro data points in search of context for analyzing the business cycle confuses and confounds more than a few investors, and even some economists. The Capital Spectator Trend Index (CS-ETI) is one attempt at a solution, or a least a partial solution. The regular updates in recent months on CS-ETI, in fact, have done a decent job of telling us how the economy is faring based on a broad read of the numbers. But there are several ways of interpreting the data, and CS-ETI is only one approach. How can we stress test its signals? One answer is reviewing the same data through a different statistical lens. Enter The Capital Spectator Economic Momentum Index (CS-EMI), a companion to CS-ETI.

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