I also track the 4 week average for this data and while it has not turned negative, almost any reading next week will confirm this drop as well.
I've mentioned this data set often as a good indicator that shows if we are coming in or out of a recession, however I've also discussed that much of the data in the leading indicators index can be pushed around by floods of liquidity (as we've experienced in amounts that blow the mind!).
I can only imagine that the WLI and also the FCI will be hampered and show contractions as the Fed attempts to draw down the juice in the system. I've also commented that this won't be possible in the long run as the markets have only been able to fake a recovery because of the extraordinary measures taken by our central bank, US Treasury, and the Administration.
If this trend continues the notion of higher interest rates could certainly be delayed and the double dip I'm suggested my be coming. I don't want to over-react as I still think we've got a month or two left of momentum higher, but the stage is being set for an April / early May top in the market.
Notice as well that the top of this recent WLI move is still at a similar level as the January 2000 level which ushered in the tech blow up. I personally hope that we don't have similar results in the market, but I wouldn't bet against it.
Goatmug
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