Other markets on May 15, 2018: outlook


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

Thoughts

  1. U.S. Dollar Index is doing a good job at holding 92.4 support. Next target 94.
  2. USD’s support = short term bearish for gold and silver. Probably revisit bottom of their range.
  3. Oil’s rally still has some room to run. Resistance at $75.

1 am: U.S. Dollar Index is doing a good job at holding 92.4 support. Next target is 94.
The USD Index broke out above its 92.4 resistance, retested this prior resistance, and has done a good job at turning it into support. As expected.
The USD’s next target is 94. I think 94 will be the top for this USD rally.

1 am: USD’s support = short term bearish for gold and silver. Probably revisit bottom of their range.
Gold and silver maintain their inverse correlations with the U.S. Dollar Index. With the U.S. Dollar finding support on 92.4, gold and silver probably aren’t ready to break out of their ranges yet.
Gold and silver will at least revisit the bottom of their ranges if the USD trends higher from 92.4 to 94.


1 am: Oil’s rally still has some to run. Next resistance at $75.
Oil’s rally is sneaky – it’s slowly grinding higher. These “grind higher” rallies are usually very powerful because at no point does momentum become extremely overbought. The market (oil in this case) goes up a bit, consolidates (washes out momentum), goes up a bit, consolidates (washes out momentum), goes up a bit, consolidates (washes out momentum).
This chart illustrates oil’s RSI (contrarian momentum indicator). Notice how daily RSI hasn’t even reached 70.

This suggests that oil still has some room to rally before it makes a correction. My target is $75. RSI will become overbought by then.
Read Other markets on May 14, 2018: outlook

Bottom line

I only trade stocks. These are just my thoughts and outlook on other markets.

  1. Gold and silver are in bull markets.
  2. I’ve decided to buy some gold and silver as long term investments.
  3. The U.S. Dollar is in a bear market.

3 comments add yours

  1. I buy some gold here . I believe gold in bull market , any drop should be bought 😀

  2. RE: Your comment — Oil’s rally still has some to run. Next resistance at $75.
    There had been a noticeable divergence between $USO & &XLE. That has closed recently and both are following a similar trend. If oil stalls at $75, does $XLE keep going? I think so, since oil companies have gotten leaner and more efficient, their earnings will continue to grow even if oil flatlines at $75.
    Member of Facebook group & Twitter follower.

    • I agree with that assessment. Oil companies can increase their profits at this $ simply by ramping up production

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