-- Published: Monday, 27 March 2017 | Print | Disqus
By Graham Summers
As we have repeatedly warned since mid-December, the “Trump trade” was based on hype.
This is not to say that President Trump will not succeed in generating economic growth… it IS to say that whatever growth is coming will do so in 2018 as opposed to the GDP growth of 5% that the market seemed to believe would be hitting in early 2017.
With that in mind, consider the following charts.
Freeport McMoRan (FCX) is a copper producer. As such this company is extremely tied to economic growth.
With that in mind consider that of the incredible 61% rally FCX staged post election night 2016, the vast majority of it 54% hit in November. Since that time, the chart went effectively nowhere with the exception of eking out a minor new high in January. And it has now unwound almost ALL of its election rally.
As one of the largest courier businesses in the world, Fed Ex (FDX) is another economic bellwether in that its business is closely tied to economic growth.
Here again the story is the same: MOST of the chart’s gains came in November and since mid-December the chart has gone nowhere. FDX now has one last remaining line of support before the entire election rally move is unwound.
Machine manufacturing giant Caterpillar (CAT) is perhaps the single best economic bellwether on the market. And here again the story is the same: a massive rally in November, followed by four months of “going nowhere fast.” And once again, there is just a single line of support before the chart comes crashing down.
Put simply, three of the most economically sensitive charts on the market are ALL warning that the Trump trade is in serious trouble. You can ignore them if you want… but smart traders are already positioning themselves for what’s coming.
Chief Market Strategist
Phoenix Capital Research
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-- Published: Monday, 27 March 2017 | E-Mail | Print | Source: GoldSeek.com