We used the latest flip flop on Fed policy indicating a surprise tightening to stop out of our long gold trade, capping our losses in an asset class that was clearly rolling over. You don’t want to be anywhere near the barbarous relic during a rising rate environment, no matter how brief it may be.

It should be a boring week of low volume summer trading, as traders sit on their hands awaiting this week’s big economic reports.

A further incentive to do nothing will be the dark cloud hanging over the upcoming June 14-15 Federal Reserve Open Market Committee Meeting.

A rate rise means “RISK OFF”, while no action brings “RISK ON”.

It’s going to be a fairly active week on the data front, despite the shortened four days.

Tuesday morning, the Case Shiller S&P 500 Home Price Index should show continued heady gains in residential real estate prices. Your home could become your top performing asset this year.

The next day, the Fed provides its Beige Book, which should confirm a slow reacceleration of economic growth from the Q1 mini recession. We already got the hint with Q1 GDP revised up on Friday from +0.50% to a still milquetoast +0.80%

Thursday, the weekly Jobless Claims should confirm figures close to 40 year lows. Everyone in the country who wants a job has one, except  your cousin Milton, who never worked a day in his life.

On Friday, we get the big kahuna of the month, the May Nonfarm Payroll Report, which should show a steady 200,000 in monthly gains, keeping the headline unemployment rate to 5.0%. The U-6 structural long-term unemployment rate should continue its grind down into single digits.

As a result, near term trading opportunities may be few and far between. We may levitate at the top of the range for stocks all the way until mid-June, when the Fed shows its hand on its near term monetary policy.

If they don’t move, as I expect, risk assets everywhere will rally. But I don’t think we will break out to new all time highs until August or September. If they take action, risk assets will dive.