Forex & commodities on January 23, 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. Crude oil is beginning the bearish divergence that I’m looking for.
  2. The U.S. Dollar Index’s price action is weak.
  3. The gold:silver ratio continues to go up. This is a bearish sign for precious metals.

5 am: Crude oil is beginning to make a bearish divergence.
Crude oil’s weekly momentum was insanely high. Historically, this means that oil needs to make a bearish divergence before a correction can begin.
It seems that oil has begun its bearish divergence right now.

Oil and the S&P 500 used to have a very strong positive correlation. That correlation is starting to break down. The S&P continues to soar while oil’s bullish momentum is weakening.

I expect this bearish divergence to last a few more weeks (e.g. 3 weeks).
5 am: the U.S. dollar’s price action is weak.
The USD Index constantly tries to bounce off of 90, a key support level. This is a psychological support level that’s very close to its previous low of 91.

Every intraday bounce is failing. This price action is bearish.

5 am: the gold:silver ratio continues to rise. This a medium term bearish sign.
Gold and silver have been going up since December 29, 2017. Meanwhile, the gold:silver ratio has been going up as well! This a medium-term bearish sign for precious metals. Healthy rallies should see the gold:silver ratio fall.


Read Forex & commodities on January 22, 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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