Friday Gold spiked and equities dropped as markets feared the expansion of the Middle East conflict. Yet markets showed signs of resilience. There could be a few more days lower, but it’s more likely it will rebound as fear settle if there is no other curve ball or aggravation.
This conflict could bring investors to reallocate in Bonds in Q4 as a imaginary safety play. If enough money jump in, it could create a shorts squeeze and a Bond Santa rally is probable at this point. War is not good for business except for war businesses and banksters. There is still too much debt though and this would be a short term play. Bonds if not a safety asset in a world wide Sovereign debt crisis. Especially when China economy is still a bust.
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There is not panic in the SP500 chart. A rebound below 4300 would show sign of strength. The important price level are the same though.
This week we have had another confirmation that the US consumer is tapped out as Ex-Walmart CEO Says US Consumers Reaching ‘Breaking Point’:
“The all-mighty American consumer, whose spending drives the economy, is reaching a breaking point and is on the verge of folding, according to former Walmart CEO Bill Simon.”
TLT weekly chart says potential rebound ahead as last week offset the previous week drop.
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Author: Robert
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