The stubborn capacity utilization manifests strength of economy – Dow 15000?
Paula Zubeda
Oct. 17, 2006

The capacity utilization correlates very closely with the economic strength and accelerating bull markets in the Wall Street. This time we are seeing nothing different. In the middle of gloom and doom, stock may be headed for a Dow 15000. The capacity utilization figure due from Fed around 9.15AM shows the strength in the US economy. Fed watches this number. It correlates closely to expected stock prices in a bull market.

If you take just this figure, the analytic models say that the bull market is alive and is headed for Dow 15000. It shows critical gauge of the slack available in the economy. The fact that it is below 85 and above 80 is a very healthy sign for the bull market.

Capacity utilization rate quite accurately correlates the assumption for production growth in the economy. The growth possibility seems like is solid based on the capacity utilization.

Till it reaches 85, the Fed has no reason to raise rates. And if that pause happens in the middle of a capacity utilization above 80%, it is super-bullish.

The stubborn capacity utilization manifests strength of economy – Dow 15000?
Paula Zubeda
Till it reaches 85, the Fed has no reason to raise rates. And if that pause happens in the middle of a capacity utilization above 80%, it is super-bullish.
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