Here are my discretionary thoughts on forex and commodities. I only trade the S&P 500.
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- Crude oil is beginning the bearish divergence that I’m looking for.
- The U.S. Dollar Index’s price action is weak.
- The gold:silver ratio continues to go up. This is a bearish sign for precious metals.
5 am: Crude oil is beginning to make a bearish divergence.
Crude oil’s weekly momentum was insanely high. Historically, this means that oil needs to make a bearish divergence before a correction can begin.
It seems that oil has begun its bearish divergence right now.
Oil and the S&P 500 used to have a very strong positive correlation. That correlation is starting to break down. The S&P continues to soar while oil’s bullish momentum is weakening.
I expect this bearish divergence to last a few more weeks (e.g. 3 weeks).
5 am: the U.S. dollar’s price action is weak.
The USD Index constantly tries to bounce off of 90, a key support level. This is a psychological support level that’s very close to its previous low of 91.
Every intraday bounce is failing. This price action is bearish.
5 am: the gold:silver ratio continues to rise. This a medium term bearish sign.
Gold and silver have been going up since December 29, 2017. Meanwhile, the gold:silver ratio has been going up as well! This a medium-term bearish sign for precious metals. Healthy rallies should see the gold:silver ratio fall.
Read Forex & commodities on January 22, 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.
- The USD Index will crater below its final support (90-91) in the first half of 2018.
- The best traders I know are still bullish on Bitcoin in the short and long term. I don’t know when the crypto bubble will end.