Forex & commodities on March 7, 2018: outlook


Here are my discretionary thoughts on forex and commodities. I only trade the stock market.
Go to the homepage for my latest thoughts on forex and commodities.

Thoughts

  1. Gold and silver: short term bearish price action.
  2. The stock market-oil correlation is bullish for oil.
  3. Trump’s steel and aluminum tariffs are bearish for the U.S. Dollar.

3 am. Gold and silver: short term bearish price action
Gold and silver continue to demonstrate signs of short term bearish price action.

  1. There is an inverse correlation between the USD and gold/silver. The U.S. Dollar has been falling over the past 2 days. Gold and silver went up yesterday but are down this morning. Based on this correlation, gold and silver should have been rising over the past 2 days. Bearish price action.
  2. Silver is still capped at its 200 daily moving average resistance.


3 am: the stocks-oil correlation is bullish for oil
There continues to be a positive correlation between stocks and oil.

The stock market’s medium and long term outlook are decisively bullish. And although the stock market might fall a little further to its 200sma, its short term outlook is starting to become bullish as well.
This correlation is a medium term bullish sign for oil. It is also starting to become a short term bullish sign for oil. If the stock market’s pullback is over, then oil’s bottom is in as well.
3 am: Trump’s steel and aluminum tariffs are bearish for the U.S. Dollar.
Trump’s steel and aluminum tariffs are not unprecedented. George Bush did the exact same thing on March 5, 2002. Here’s what happened next to the U.S. Dollar Index.

To be sure there were multiple reasons for the U.S. Dollar’s bear market. But at the very least Bush’s tariffs were not bullish for the U.S. Dollar.
Read Forex & commodities on March 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. I’ve decided to buy some gold and silver as long term investments.
  3. The U.S. Dollar is in a bear market.

2 comments add yours

  1. Hi Troy,
    In your previous analysis, you think precious metal may pull back a little more. But now with this steel tariff which cause falling of USD, do you think precious metal will still pull back, or this the break out point for precious metal? Is it time to buy some leveraged silver ETF?
    Thanks.
    Alex

    • Hi Alex,
      I don’t trade leveraged silver ETFs.
      I don’t think gold and silver will break out right now. Silver is capped at its 200sma

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