The Trump Economy has Peaked
Unless you are day trader or you are getting out of your long positions, today’s new highs in the S&P are meaningless.
Various Fed indicators are starting to show the effects of a one-sided tax influenced spurt. I look for this weeks GDP number to come in under the widely mentioned 4.0 + level, probably more in an area between the Atlanta and NY Fed current forecasts, or maybe in the 3.1 to 3.4 level.
New Market Highs
Today’s market action of new stock market highs is happening against a backdrop seeing the F-3 Macro Fracture Chart under pressure. It broke down on Friday, taking out the April 2nd lows and today’s rebound is holding below the trend line. What we are seeing is probably the last Fed interest rate increase this year in September. This move toward normalization will be put on hold as a dramatic down move in the economy and stock prices will be in effect this fall. Gold and the dollar should be watched as the risk and fear gauges amp up.
As we have pointed out before, if one has market positions that mimic the F-3 fracture chart basis, you make money when the chart goes down. Since Jan 26, 2018 you have done well, and keep in mind that this equation and chart weighs stocks 3:1 compared to other components. The chart direction and you portfolio profits will therefore accelerate when stocks tumble.
. See chart here as of 10:00 AM CDT