One way to gauge the momentum of the economy is to track how economic indicators compare to their consensus forecasts. When the actual reports come in below expectations, it implies the economy is slower than the consensus has factored, while reports that come in higher than expected imply the economy is stronger than people generally expect.
Currently, we track a series of 35 economic indicators. Each day, we add up the number of indicators coming in ahead of expectations, inline with, or below forecasts. We then add each day's net number to a running 50-day total to come up with an A/D line for economic indicators. In the chart below, we compare the A/D line of economic indicators to the yield on the 10-year Treasury. As the chart shows, over the last year, moves in the economic indicator A/D line have been telegraphed by moves in the bond market.