Here are my discretionary thoughts on forex, commodities, bonds, and cryptocurrencies. I only trade the stock market.
Go to the homepage for my latest thoughts on the markets.
- The U.S. Dollar Index is on track to reach my target of 94 (resistance). Short-medium term bullish.
- Gold and silver have yet to breakdown. Short-medium term bearish.
- Bitcoin’s price action is bullish.
1 am: The U.S. Dollar Index is on track to reach my target of 94 (resistance).
The USD Index has broken above its 92.4 resistance and is slowly going up, as expected.
94 is my target. There’s a confluence of resistance here. 94 was the USD Index’s range high from October-December 2017. It is also the USD Index’s 50 monthly moving average resistance.
1 am: Gold and silver have yet to breakdown. Short-medium term bearish.
Gold and silver have a strong inverse correlation with the USD Index right now. They are on the verge of breaking down.
This is a common gold/silver pattern when the USD rallies.
- The USD rallies, but gold and silver stubbornly refuse to go down.
- Gold and silver tank towards the final 1/4 of the USD rally.
In other words, gold and silver often lag the USD.
1 am: Bitcoin’s price action is bullish.
I am not a lover of cryptocurrencies. I share Warren Buffett’s sentiment towards Bitcoin (i.e. he hates Bitcoin).
But there’s something about this rally in Bitcoin and cryptocurrencies that’s different from its previous bear market rallies.
For starters, Bitcoin made a double bottom in February and April 2018. There was no “lower low” (lower low = standard bear market pattern).
In addition, you can see that previous bear market rallies were fierce and sharp, while the current rally is slow and steady.
And lastly: Warren Buffett and Bill Gates both came out as heavily bearish on Bitcoin (see CNBC). You’d think that Bitcoin would tank on such bearish comments. It didn’t. It made a very shallow pullback, almost as if it’s conserving energy for a break above the $10k resistance. I see this as bullish price action.
With that being said, the key is whether or not Bitcoin can break its $11,700-$12k resistance. If it does, then the bull market case has strong underpinnings. Bitcoin will have made a “higher high”.
I only trade stocks. These are just my thoughts and outlook on other markets.
- Gold and silver are in bull markets.
- I’ve decided to buy some gold and silver as long term investments.
- The U.S. Dollar is in a bear market.
- Cryptocurrencies might be starting a new bull market (I’m not so sure about this one).