The Pending Home Sales Index for November and the Chicago PMI for December provide more evidence of economic recovery. On Friday, the National Association of Realtors released its Pending Home Sales report for November .  The Pending Home Sales Index rose – as expected – by 1.7 percent to its highest level since April of 2010.  The index is based on sales which have not yet been closed, although contract signings have taken place. From the report: The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 1.7 percent to 106.4 in November from a downwardly revised 104.6 in October and is 9.8 percent above November 2011 when it was 96.9.  The data reflect contracts but not closings. The index is at the highest level since April 2010 when it hit 111.3 as buyers were rushing to beat the deadline for the home buyer tax credit.  With the exception of several months affected by tax stimulus, the last time there was a higher reading was in February 2007 when the index reached 107.9. *   *   * On a year-over-year basis, pending home sales have risen for 19 consecutive months. The Chicago Purchasing Managers Index is also known as the ISM-Chicago Business Survey, the MNI Chicago Report and the Chicago Business Barometer.  On Friday, the ISM Chicago released the Chicago Business Barometer for December .  The PMI rose from 50.4 in November to 51.6 (a reading above 50 indicates expansion).  Economists had been expecting a more modest increase to 51.0.  Although new orders increased from 45.3 to 54.0, employment dropped to a three-year low of 45.9, compared with 55.2 in November.   Major Bullish and Bearish Factors for 2013 From the report: The Chicago Purchasing Managers reported the Chicago Business Barometer was up for a third month, lumbering along since September’s 3 year low.  The Business Barometer was guided higher almost exclusively by a sizable advance in New Orders.  In spite of the rise in the Chicago Business Barometer, five of the seven business activity indexes declined in December, most significantly in the Employment Index. The major ETFs expected to respond to the Pending Home Sales report for November and the Chicago Business Barometer are: iShares Dow Jones US Real Estate Index Fund (NYSEARCA:IYR)  -0.62%  Learn More About iShares ETFs Industrial Select Sector SPDR ETF (NYSEARCA:XLI)  -1.09% Materials Select Sector SPDR ETF (NYSEARCA:XLB)  -1.31% iShares Dow Jones US Industrial Sector Index Fund (NYSEARCA:IYJ)  -1.13% iShares Russell 2000 Index ETF (NYSEARCA:IWM)  -0.69% XLP, KRU: Big ETF Outflows Bottom line: Both the Pending Home Sales Report for November and the Chicago Business Barometer for December provided more evidence of economic recovery.  Nevertheless, the fact that five of the seven business activity indices from the Chicago Business Barometer declined in December – especially the employment index – demonstrates the sluggish pace of the recovery. Sign up for Wall Street Sector Selector’s FREE Stock Market Timing Indicator!    Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector’s Disclaimer , Terms of Service , and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.