Does anyone else remember a time when there were so many false positives for the economy and financial markets as in recent weeks and months? That is, false so far. The ECRI Weekly Leading Index has been screaming recession for about a month now and all we’ve seen in other economic data is slowing growth (though the jury is certainly still out on the U.S. economy). And stocks have recovered nicely from their recent swoon despite the much-discussed July 8th “Death Cross” warning (i.e., when the 50- and 200-day moving averages cross) as we are reminded in this item at The Dynamic Hedge blog.

Of course, the growing talk about the Fed cranking up the printing press should be factored into the performance of equity markets since that time. It seems the specter of QE II has compelled more than a few trading algorithms to bid prices higher, a development that could quickly reverse gear if the central bank fails to come through with any soothing words that begin with a “B” (preferably a “T”) when they conclude their policy meeting tomorrow.