The chart below shows the European Consumer Confidence Index (blue) and the European Index of Major Purchases (red), an index that I constructed myself using data related to major purchases in the European Sentiment Index report.
I previously analyzed the European Consumer Confidence Index (ECC) here, and concluded that a turn to the downside in the index is usually a signal of a top in the stock market and a slowing economy. I also said the the event which would invalidate this scenario was the index making a new high, in which case, according to previous similar contexts, the economic recovery would continue..
That is exactly what happened in November, with a reading above the previous high in August (green circle). Reinforcing the indication of a continuing recovery is the European Index of Major Purchases which has been strong recently (black circle).
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