The Trifecta: The key support levels in the Dow, the Transports and the S&P were breached today. The Dow finished the day at down 96.28 to a new low of 9774.02. The transports were down 33.65 to 4007.84. The S&P was down 10.53 to 1030.70. Look out below! Sure, there can be a brief “oversold” rally, but by every meaningful measure, the stock market is falling apart.
Russell’s Primary Trend Index is now MINUS 7. This is not good.
Fed officials see high U.S. unemployment for years
CHICAGO, June 30 (Reuters) – U.S. unemployment is likely to stay high for a long time, two Federal Reserve officials said on Wednesday, suggesting the U.S. central bank is in no rush to raise its ultra-low interest-rate policy.
The dovish comments, from Chicago Federal Reserve President Charles Evans and Federal Reserve Governor Elizabeth Duke, came two days before a government report expected to show that U.S. non-farm payrolls fell in June. If that occurs, June will mark the first decline in monthly non-farm payrolls this year.
The Chicago Fed’s Evans said the economic recovery is “definitely on,” with growth expected at 3.5 percent this year.
But inflation is dropping, and he expects it to run below his guideline of 2 percent for the next three years or more.
Meanwhile, unemployment is at 9.7 percent, “and it’s going to be a number of years before it’s going to get down to any type of rate that we might almost say is acceptable,” he said in a rare 30-minute live interview on CNBC.
Taken together, low inflation and high unemployment mean that the Fed’s current accommodative monetary policy is still needed, he said…
Those of you who follow my blog understand that this is all hogwash! Inflation below 2 percent for the next three years or more? Unemployment at 9.7 percent? These Fed guys should all get a subscription to Shadowstats, courtesy of the US taxpayer. I understand that this stuff is not an exact science, but come on – To miss on unemployment by nearly 11 percent and to miss the inflation number by 5 percent would be ludicrous if it weren’t so blatantly disingenuous.
Take a close look at the “cup and handle” gold formation chart in Jesses’ Café Americain section, later in the newsletter. I have called this “technical” formation to your attention many times and it is one of the STRONGEST BULLISH FORMATIONS that there is. Only a fool would stand in front of the gold bull now.
Day by day the two trends are becoming clearer and clearer – the stock market (and by proxy, the economy) is falling fast and gold is gaining strength.