1 Day That Will Make or Break The United States Economy

I apprehensively present this title with a sense distressed patriotism as we quickly near a date that I fear will be written in the history books. I speak of this Friday – August 26th, as all paths seem to converge upon this one day. As with most notable dates in history, events seem to concentrate upon one date – an inflection point, if you will – where suddenly the game changes. In what direction is yet to be foreseen, but you don’t have to be Nostradamus to see global markets boiling, banks facing liquidity issues and all the while gold is rising to new highs. One point is certain – fortunes will be made and fortunes will be lost on Friday.

The first game changing event on Friday will come while you are having your morning coffee at 8:30AM. It is the newly revised US Q2 GDP, which is expected to print at .9% – revised most recently from 1.3%. This will set the mood for the US market open as well as the European market close. Traders: be prepared with stops and keybinds if we print lower – it could get very ugly very fast. Now assuming that the floor of the NYSE has not yet become the center of a new supermassive black hole we are expecting to hear about consumer sentiment. The August mood-barometer is expected to print at 56.5 – up from 54.9 for the previous month. Now, this will serve to kick the man when he is already down if we took one in the gut with the GDP print – as I expect sentiment to be bearish. Sometimes as a trader you are standing too close to the trees to see the forest but when your non-trader friends are advising you to buy gold – you know things are grim.

At this point, we all know what comes next. In fact I would go so far as to say that the economic fate of the free world depends upon its outcome. It is to us traders what the newest Twilight Saga movie is to teenage girls – it is The Jackson Hole Speech. The speech derives its name from the location in which it takes place – Jackson Hole, Wyoming – a place almost entirely cut off from the outside world. It is here that Fed Chairman Ben Bernanke will drop economic bombshells in a most civilized fashion that we have come to know and love. Now – at this point – I am going to take the high road and abstain from speculating on such matters of high finance. However I will say this – if Bernanke does not look like this:

It is safe to say we can expect global markets to look like this:

I personally am hoping for the best outcome – I would like Friday, August 26, 2011 to go down in the history books as a new beginning for economic prosperity. However as with most things (Re: Obama) my hope is fading to despair as the prospects of a win-win situation is weighed down by the reality of the facts.

My best advice for traders: Take an early weekend. If you must trade be sure you close out all positions before 10 AM as markets are going to be moving at a pace you have not seen in a very long time. Study beforehand, have a game plan, and what ever you do: don’t break your rules – especially on this day.

J. Lundberg
Real Time Insight @BreakoutBull via Twitter.
PS – I can’t thank you all enough for making my blog one of the fastest-growing on WordPress

5 Responses to “1 Day That Will Make or Break The United States Economy”
  1. GYSC says:

    The FED cannot make anything real happen on Friday, just perception.

  2. Scott Murray says:

    That photo analogy was frickin hilarious. How many people will go to bed on Friday and pray to Helicopter Ben? Can he hear their petitions?

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