The Shortcut to Market Logic: 5 Indicators Every Investor Should Really Watch

Agris Gruzdas
Oct 10
3 min read

If you’ve been around markets long enough, you start to notice a strange thing — people love complexity. The more confusing, the better. It sells.

You can open YouTube, Bloomberg, or whatever trading forum, and you’ll see a hundred self-proclaimed gurus explaining how to “decode” the market using some obscure ratio between the moon phase and the 10-year yield curve.

Meanwhile, the real economy quietly moves on, leaving most of these theories behind.

So, let’s keep it simple.

There are 5 types of indicators every investor should actually care about.

No rocket science.

No secret sauce.

Just shortcuts — the kind that help you understand what’s happening before it hits the headlines.

1. The Main Trio: Manufacturing, Services, and Consumers

These three are like the heart rate, blood pressure, and oxygen levels of the economy.

Ignore them, and you’re trading blind.

• Manufacturing PMI – measures how busy producers are. Above 50 means growth; below 50 means trouble.

• Services PMI – shows the mood of the biggest part of the economy. If services slow, the whole machine slows.

• Consumer Sentiment – because at the end of the day, people are the economy. Confident consumers spend; scared consumers save — and the market cools faster than your coffee in a Latvian winter.

And please — don’t listen to the news.

Clickbait media loves to scream “CRISIS!” or “BOOM!” depending on the day.

Go to the prime source — ISM reports or University of Michigan data. Boring, but brutally honest.

2. The FED and the Domino Effect

Now let’s add a second layer — Leading and Lagging Indicators.

As I like to call them: the cause and the consequence.

Leading indicators show where we’re headed:

• FED rate decisions (“Don’t fight the FED!” — not a joke, but a survival rule).

• Building permits and home sales — people build when they believe in tomorrow.

Lagging indicators confirm what’s already happened:

• Unemployment rate and non-farm payrolls.

When job losses appear, the slowdown is already underway.

A smart investor knows the difference between a signal and an echo.

3. Confirmatory and Common-Sense Indicators

Now, let’s step away from formulas — because not everything that matters comes from a spreadsheet.

Common Sense Still Matters

Remember the Suez Canal blockage in 2021? Or the Houthis' attacks in the Red Sea? Those weren’t in any macroeconomic model, yet they sent global markets into a frenzy and pushed up oil and shipping costs.

Common sense suggests that when shipping stops, prices tend to rise.

When oil rises, inflation follows.

When inflation rises, the FED steps in again.

That’s how one ship stuck in a canal can change global interest rates.

So yes, sometimes you need to look out the window and ask,

“What’s actually happening in the real world?”

Confirm What You Think You Know

Then we have the Confirmatory Indicators — the ones that make sure you’re not fooling yourself.

Inflation, oil prices, consumer spending, and the strength of the U.S. dollar show whether the story you believe matches reality.

If inflation is high and corporate earnings are falling, that “bullish optimism” you saw on TV suddenly doesn’t look so bullish anymore.

A good trader never relies on one signal.

He checks, cross-checks, and waits for confirmation.

That’s the difference between making educated decisions and gambling on gut feeling.

4. Putting It All Together

When you combine these five sets of indicators — Main, Leading, Lagging, Confirmatory, and Common-Sense — the market starts to look less like chaos and more like a chessboard.

For example: