Forex & commodities on January 30 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. The U.S. dollar’s price action is very weak.
  2. Will gold and silver retesting their support trendline?
  3. The U.S. dollar is at its 200 monthly moving average.
  4. The next stock market correction will bring down commodities and non-U.S. currencies.

7 pm: the USD’s price action is very weak.
There was an inverse correlation between the stock market and U.S. dollar. I expected the USD to make a small bounce on the S&P’s decline. The U.S. dollar hardly bounced today. This is bearish price action.

6 am: Will gold and silver retest their support trendline?
Nobody knows when the correction in everything will begin. Perhaps it has already begun, or perhaps it will begin in 2 months. Guessing the exact top is futile.
If the correction in gold and silver has already begun, then they will retest the support trendlines in their triangle consolidation patterns. This means that gold will probably retest $1260 and silver will probably retest $16.


5 am: the U.S. dollar is at its 200 monthly moving average.
A lot of traders are going long the USD here because they expect a bounce on this long term support level. If this bounce succeeds, I expect the U.S. Dollar Index to bounce to 91, thereby retesting its previous low and turning support into resistance.

3 am: the next stock market correction will bring everything down.
2 weeks ago I predicted that the next U.S. stock market correction will bring everything down: commodities, foreign stock markets, and foreign currencies (e.g. Euro, CAD, AUD, JPY, GBP).
It looks like I’ll be right. Markets and assets are positively correlated right now. The U.S. stock market’s decline yesterday brought everything down.

  1. The U.S. stock market fell. Hence…
  2. The Euro, Canadian Dollar, Japanese Yen, British Pound, and Australian dollar all fell.
  3. Oil, gold, and silver all fell.
  4. Foreign stock markets and emerging market ETF’s all fell.

I don’t know if the U.S. stock market has topped right now. But when it does within the next few months, it will be a correction in everything. The U.S. dollar will make a bear market bounce.
Read Forex & commodities on January 29 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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