Forex & commodities on February 6, 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. Most commodities have bullish price action.
  2. The U.S. dollar’s price action is bearish.
  3. Gold & silver have bullish price action.

3 pm: Most commodities have bullish price action.
There is a positive correlation between the U.S. stock market and commodities (oil, gold, silver) right now.
Crude oil was insanely overbought on a weekly bar chart and gold/silver were bumping up against multi-year resistances. They should have made a sizable correction when the S&P cratered over the past few days. Instead, oil/gold/silver made small pullbacks. This is bullish price action.



In addition, the gold:silver ratio isn’t rising today despite the recent downtrend in precious metals. This is a bullish factor for gold and silver.
7 am: the U.S. dollar’s price action is bearish.
There is an inverse correlation between the S&P 500 and the USD Index. The S&P 500 crashed yesterday, but the U.S. Dollar Index barely went up. Now that the S&P 500 has stabilized, the USD Index cannot go up anymore. This is bearish price action.

7 am: gold and silver have bullish price action
There’s an overall inverse correlation between gold/silver and the U.S. dollar. Gold and silver’s recent price action has been bullish.
The U.S. dollar went up a little yesterday as the S&P 500 went down. Gold and silver should have went down yesterday, but they didn’t. The USD Index is going down this morning, and gold/silver are up. This is bullish price action.
Read Forex & commodities on February 5, 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. The USD Index will crater below its final support (90-91) in the first half of 2018.
  3. 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.

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