Here are my discretionary thoughts on forex and commodities. I only trade the S&P 500.
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- Oil might retrace a little more. But it is becoming increasingly bullish.
- Gold and silver’s price action is bullish today.
- The U.S. dollar is making a standard bear market bounce. EURUSD is making a standard bull market pullback. This bounce won’t last for much longer.
3 pm: oil might retrace a little more, but it is becoming increasingly bullish.
*I don’t trade oil, so take this with a grain of salt.
The commodities family (gold, silver, oil) is in a bull market. Pullbacks and corrections in bull markets frequently retrace 38.2%.
Oil has retraced more than 23.6%. Its 38.2% retracement is at $57.3.
I think oil will fall a little more to its 38.2% retracement. Its price action is still weak. Oil only went up a little today while gold and silver went up a lot.
*There’s a positive correlation between oil and gold/silver.
Remember that this is short term weakness. Oil has already made its much needed correction. The medium and long term are bullish.
1 pm: Gold and silver’s price action is bullish today
Gold and silver went up today. But more importantly:
- Silver went up a lot more than gold today, which brings the gold:silver ratio down. This is important because silver should rise more than gold in a sustainable precious metals rally. Silver continues to make new intraday highs this afternoon while gold has not yet made a new intraday high.
- There’s an inverse correlation between the USD and gold/silver. This means there’s a positive correlation between EURUSD and gold/silver. EURUSD did not make a new intraday high this afternoon but silver did.
These are medium term bullish signs.
Here’s silver’s 5 minute bar chart.
Here’s gold’s 5 minute bar chart.
Here’s EURUSD’s 5 minute bar chart.
7 am: the USD is making a standard bear market bounce.
The U.S. Dollar Index’s recent bounce is completely normal for a bear market bounce. The USD Index was at its 200 monthly moving average, so a bounce was not out of the ordinary.
The EURUSD was almost at its 50% retracement resistance. EURUSD accounts for 57% of the USD Index.
I don’t expect the U.S. Dollar’s bounce to last for much longer. The USD is in a bear market. Historically, USD bear markets had very small bounces.
Read Forex & commodities on February 9, 2018.
I only trade stocks. These are just my thoughts/outlook on other markets.
- Gold and silver will break above their tight range in the first half of 2018.
- I’ve decided to buy some gold and silver as long term investments.
- The U.S. Dollar is in a bear market.