Here are my discretionary thoughts on forex and commodities. I only trade the stock market.
Go to the homepage for my latest thoughts on forex and commodities.
- USD-S&P correlation is medium-long term bearish for the USD.
- Bullish price action for the U.S. Dollar.
- Gold supply: a long term bullish factor for precious metals.
2 pm: USD-S&P 500 correlation is medium-long term bearish for the USD
There is a clear inverse correlation between the USD and S&P 500 right now. The U.S. stock market is falling today while the U.S. Dollar Index is going up.
The stock market faces short term weakness, but its medium-long term outlook is decisively bullish. This means that the USD’s recent uptrend is merely a bounce/rally in a bear market and not the start of a new USD bull market. This bounce is the USD’s way of washing out oversold momentum (RSI) before heading lower in the medium-long term.
Here’s the U.S. Dollar Index’s weekly bar chart.
3 am: Bullish price action for the U.S. Dollar
There are small signs of bullish price action for the U.S. Dollar. There is a clear inverse correlation between the USD Index and the S&P 500 right now.
The S&P 500 went up significantly over the past few days, but the USD Index barely went down. If the S&P 500 makes a pullback, then the USD Index will bounce higher. This is a short term bullish factor for the U.S. Dollar.
3 am: Gold supply: a long term bullish factor for precious metals.
The global supply of gold is expected to peak in 2021. This is a small long term bullish factor for gold (and silver, because silver and gold move in sync).
This is not a huge bullish factor. Gold’s speculative demand is far greater than its industrial demand or supply. Gold’s demand primarily comes from speculators, long term investors, and central banks.
Read Forex & commodities on February 23, 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.