Getting back into it after a couple of months off. Thank you for all the concerned emails and warm wishes. It’s the beginning of a new year and so why not take a spin around the global macro charts – and see where the capital is flowing and what might happen next.
Commodities and Commodity Currencies: Copper, Crude Oil, Aussie Dollar and Canadian Dollar. We’re in the early stages of bottoming with some Exhaustion selling volume on Crude Oil and Copper. I expect we’ll see real capitulation soonish – and we’ve not seen Exhaustion selling on the Aussie yet. So capitulation of Commodities in Q1 of 2016, followed by bottom testing in Q2 and possible trend change in Q3? Russian and Australian country ETFs might be a nice way to play this reversal.
European Currencies: Euro and British Pound. The downtrends have resumed and we’re approaching critical Supports: $1.05 on the Euro and $1.45 on the British Pound. Breaking these levels will bring on the Exhaustion selling. The festive season has been a nice little break from the problems Europe faces – but as soon as the festive fog has cleared, watch out. Germany has peaked. The real cost of letting in 1+ million refugees will start to hit. British people want out of Europe but British businesses want to stay in. Let the fun begin.
Precious Metals: Gold and Silver. Finally we’ve got the first (tentative) Exhaustion selling signals on both Gold and Silver. But no Professional down bars. We’ve still got to put in a proper bottom and then prove it. No rush here and more interesting trend activity in other markets – unless Turkey, Iran, Saudi Arabia, etc. start declaring war on each other willy-nilly. Which isn’t out of the realm of possibility.
US Assets and Currency: US Equities, US Bonds and US Dollar. So compared to everything else that is going on, is it any wonder the capital is flowing into US assets and the US Dollar? I’ve liked the US Dollar since March 2013 – and that’s worked out nicely for me. 101 on the US Dollar Index, 2,100 on the Emini and 156 on 30-year Bonds are Resistance levels just waiting to get broken. And if they do break, the uptrend is on. If the Emini holds on Monday/Tuesday we’ve got some Seasonal strength for the rest of the week that could turn into a nice January – I just wish the Russell was looking stronger.
Forecasts are always just a little bit of fun. As always, trade what you see not what you think, expect, believe or have read. 2016 is going to be a critical year to get right – and I’m looking forward to it.
Good luck with your Emini trading in 2016.