http://www.propwise.sg/predicting-th...y-price-index/
"While my company relies on several indicators to assess the Singapore property market, I often use the Ascendant Assets Indicator (AAI) to tell me how the overall market is performing. The basic premises of the AAI index are (1) a lead-lag relationship exists between the stock and property market and (2) we are able to tell how the economy is performing by analysing the correlation between the stock and property market.
To illustrate, let us look at Figure 1. The correlation between stocks and properties is observed to be high, i.e. when the AAI (the blue line) is more than 50% (represented by the dotted line). These phases of strong correlation occur when both stock and property prices are moving in tandem upwards (during bullish economic conditions) or downwards (during bearish economic conditions).
Phases of weak correlation (blue line below the dotted line) occur when stock prices diverge from property prices. This happens because stocks, which are more liquid, react faster to changing market conditions. As a result, yellow phases indicate that the economy is turning point.
Deciphering the market trends
If you were to look at Figure 2, you will notice that past yellow volatile zones (highlighted in red) coincided with the decline of the URA PPPI (pink line). Based on this recurring trend, I was able to tell that economic conditions were gradually becoming more uncertain and that a decline in the URA PPPI was just around the corner."
So looking at this we are in the next phase to be pink. Can only be down trend from here?
I guess the guy can be 50% right 50% wrong