I've received a few emails recently about the Pub Power equity buy signal, so here's the update. As I've said all along, the Pub Power equity signal is a catchy, data-mined, equity buy signal (with a decent explanation) that was first detailed / created by EconomPic back in September '09.
It is the relative strength of 'food establishment and drinking places' sales vs. grocery sales (as expressed in year over year terms). The relevance? Well, the data seems to suggest that "Pub Power" = Strength in the Dow, one year forward.The thought was that the relative strength (i.e. demand) of restaurants relative to cooking at home shows the following characteristics:
- Consumer confidence
- Spending power
But, what is the signal is telling us now?
Nothing much. The U.S. equity markets are right around fair value, but seem to indicate continued choppiness over the next 12 months. Sounds about right to me...