The economic reports released on Monday showed an increase in personal spending — although the increase was less than expected — combined with a decrease in personal income. The obvious conclusion is that patriotic Americans, following the example set buy their government, spent money they didn’t have in an effort to boost the economy.
At this stage economic reports have less and less influence on the market given the more-or-less constant expansion of the money supply by the Fed.
The USD lost ground again yesterday in anticipation of today’s Fed announcement of more money printing. If the QE2 plan is larger than expected this market will continue moving up, even as the USD loses more and more purchasing power. However that isn’t our problem; we just have to figure out how to trade it.
Today promises to be exciting. Be cautious.
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ESZ0 Intraday – 60-minute bars
