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So goes the Consumer, so goes the economy? The chart below reflects that over 65% of GDP comes from consumption, 18% from the Government.
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One could make a case that how the consumer is doing is important to the overall economy. Could the patterns of leading retail companies send a signal about the future direction of the economy? The top chart reflects 5 large retailers, (Best Buy, Dollar Tree, Home Depot, Lowes & Target) each breaking support of rising wedge patterns.
A break of support DOES NOT prove the economy is about to slow down. For the economy to keep moving forward, you want to see these leading retailers start moving back up in price.
Keep a close on this sector over the next couple of months!
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