Other markets on May 16, 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 will go higher, but not significantly higher. USD and interest rates have a positive correlation.
  2. Gold has broken down below its range support. Silver is on the verge of breaking down.

1 am: U.S. Dollar will go higher, but not significantly higher. USD and interest rates have a positive correlation.
The U.S. Dollar Index is on track to reach its 94 resistance.

I don’t think the USD will significantly exceed its 94 resistance. There is a positive correlation between the rising USD and rising 10 year Treasury yield right now.

Notice how the 10 year yield is once again becoming overbought on a weekly RSI (weekly RSI is useful for the medium term).

This means that if yields continue to rise, they won’t be able to rise much further. This also means that the USD’s rally is limited.
1 am: Gold has broken down below its range support. Silver is on the verge of breaking down.
As expected, gold has broken down below its range support. Silver will be the next one to breakdown.
*I expect silver’s breakdown to be less severe than gold’s breakdown because silver’s price action is stronger.
$1265 is a solid target for gold. That’s gold’s 76.4% fib retracement.

Silver’s target is $15.6 – its December 2018 low.

Read Other markets on May 15, 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.

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