Fake Economic News

Fake News

We are talking about Fake in terms of what is driving the strong US 2nd Qtr GDP numbers, it appears that a significant portion can be credited to front running by China on US purchases prior to the expected tariffs, not real sustainable growth.

The Big Trade

In any case, the one trade that has really worked this year is the flattening yield curve trade, long the long rate bonds, short the short rate notes, over a 25 % move so far. So what is the premise of this trade, 1) the FED is normalizing short rates and 2) long rates are mired in an unworkable economic agenda funded by the US government.

Gold and Commodities

Gold and commodities are taking a bit of a hit these days, short term support in Gold did not hold in $ 1245 area, probably because the FED shows no signs a stopping the rate normalization, but keep in mind, Gold ownership to us is based on FEAR and our long term chart target in the $ 3000 area and we see only increasing fear down the road. Gold support now is in the $ 1205 area, an area where the weekly charts suggest a long term head and shoulders bottom.

Fracture Chart

Seems to be in a kind of holding pattern over the past couple of weeks as we sit on the precipice.

 

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