Forex & commodities on February 7, 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. Gold and silver have pulled back enough.
  2. The U.S. dollar will rally a little more and commodities will pullback a little more if the S&P retests its crash-lows.

3 pm: gold and silver have pulled back enough
Silver has retraced more than 61.8% while gold has retraced more than 38.2%.
Here’s silver on a daily bar chart.

Here’s gold on a daily bar chart.

Gold and silver might face some short term weakness. Support for silver at $15.8. But the medium term risk:reward is bullish.

6 am: The U.S. dollar will rally a little more and commodities will pullback a little more if the S&P retests its crash-lows.
Our study demonstrates there’s a >50% chance that the S&P makes a marginal new low or retests its crash-lows over the next few days/weeks.
There’s a positive correlation between oil, gold, silver and the U.S. stock market right now. There’s also an inverse correlation between the U.S. Dollar Index and stocks right now. Hence, a retest of the S&P’ lows or marginal new low will = a bigger pullback in commodities and a bigger bounce in the U.S. Dollar.
From a medium term perspective, risk:reward favors bullish commodity investors and bearish USD traders. The stock market’s medium term bottom is either already in or is very close.



Read Forex & commodities on February 6, 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.

2 comments add yours

  1. Troy,
    Gold was showing major relative weakness when the market was down 1600 Dow points then the next night when Dow futures was down an additional 840 points Monday night gold futures continued to show relative weakness up $4. When traditionally gold skyrockets during times of panic as a safety trade. So what conclusion can u forecast from that? Looks like gold will pullback in the short term based on how gold acted during the 6-10% flash correction

    • Gold’s price action is weak today. I did not expect this. SPX up, commodities down and USD up.

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