Forex & commodities on February 15, 2018: outlook


Here are my discretionary thoughts on forex and commodities. I only trade the S&P 500.
Go to the homepage for my latest thoughts on forex and commodities.

Thoughts

  1. Precious metals’ bearish price action continues.
  2. Expect some more short term weakness in oil, gold, and silver
  3. Gold, silver, and gold miner’s seasonality in March is slightly bearish.

2 pm: Precious metals’ bearish price action continues
This bearish price action has been a consistent problem for gold and silver over the past few days:

Silver continues to underperform gold. Silver should outperform gold in a healthy rally because silver is more volatile than gold.


This bearish price action will be overriden if the U.S. Dollar Index makes a new low. A new low in the USD Index will cause gold and silver to surge.

3 am: Expect some more short term weakness in oil, gold, and silver
There is a very strong correlation between the U.S. stock market, oil, gold, and silver right now.

I said that the stock market will probably retest its lows over the next few days/weeks. This correlation and the stock market’s retest implies that oil, gold, and silver will fall a little over the next few days/weeks before resuming their bull market rally.
3 am: Gold, silver, and gold miner’s seasonality in March is slightly bearish
We’ve already looked at the short term outlook for oil, gold, and silver from a correlation point of view. Seasonality confirms this short term bearishness for precious metals.
GDX is seasonally weak in March.

Silver is somewhat seasonally weak in March

Gold is seasonally weak in February and March.

Read Forex & commodities on February 14, 2018.

Bottom line

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

  1. Gold and silver will break above their tight range in the first half of 2018.
  2. I’ve decided to buy some gold and silver as long term investments.
  3. The U.S. Dollar is in a bear market.

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