Forex & commodities on April 10, 2018: outlook


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.

Thoughts

  1. The U.S. Dollar’s year-over-year decline is massive. Supports the case for a medium term bounce in the USD Index.
  2. Gold and silver are stuck in very narrow ranges. A USD bounce = a gold and silver correction.

1 am: the U.S. dollar’s year-over-year decline is massive. Supports the case for a medium term bounce in the USD Index.
The USD’s decline since 2017 is not massive compared to the 1985-1990 and 2002-2005 bear markets. However, the USD’s year-over-year decline is massive.

This is not a long term bullish sign for the USD. You can see that the USD continued to crash after 1987 and 2004. However, this is a medium term bullish sign for the USD and suggests that the USD Index will make a bigger rally.
1 am: Gold and silver are stuck in very narrow ranges. A USD bounce = a gold and silver correction.
Here’s gold’s very narrow range.

Here’s silver’s very narrow range. Silver’s range is even narrower than gold’s.

Gold and silver continue to maintain an inverse correlation with the USD.


A USD medium term oversold bounce = a medium term gold and silver correction.
Read Forex & commodities on April 9, 2018: outlook

Bottom line

I only trade stocks. These are just my thoughts/outlook on other markets.

  1. Gold and silver are in bull markets.
  2. I’ve decided to buy some gold and silver as long term investments.
  3. The U.S. Dollar is in a bear market.

3 comments add yours

  1. Hi,
    This one got me confused
    My read on this is that you expect a medium term gold/silver correction due to a USD bounce, however you are building a gold/silver position for the long term
    What am I missing
    Also, I am reading all your ideas here
    Learning a lot and changing completely how I am looking in investing (for the bettter)
    Keep writing, please!

    • Hi Pedro:
      My silver position is small compared to my overall portfolio. So although I think there’s a >50% chance of a gold/silver decline, I’m not really concerned if it does happen. The damage to my portfolio will be small. There’s no guarantee that a correction will happen.
      Regards,
      Troy

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