We’ve been selling into strength, less than two weeks before the election.
GDP doubled to a seasonally adjusted annual rate of 2.9%, essentially surpassing the previous rate of 1.4%. This is recorded as the largest expansion since the third quarter of 2014, right before the election?
Someone should tell consumers, as discretionary spending was half the previous 4.3 percent rate. Somehow, GDP product doubled?
Consumer spending accounts for more than two-thirds of U.S. economic activity.
If consumer spending increased a modest 2.1 percent, how does GDP double? That’s some fancy math.
Well, the chart tells a different story, with one supporting element remaining, the 200ma. If we lose this key average, the reverse Kirby takes over, with the Brexit lows as the obvious target at 73.90. There are intermediate levels at 76.00 ~ 76.50 that could experience some activity.
Until we see buyers, we will remain in “wait and see” mode.
It’s Fry-day so we are rehashing thoughts for the past few months. Sell into strength. Pretty simple.