2018 Stock Market: Auld Lang Syne

After writing hundreds of Daily blogs in 2018, it is with both joy and sadness that I write the last one for the year.

I wish to thank all my devoted readers and those financial publishing services who reprint my Daily on their websites. 

Throughout this volatile year, certain trends have emerged, and we expect these trends to continue into the beginning of 2019.

Furthermore, we are focusing on the potential trends that could offer traders profits.

With the market now in a bearish phase, we are looking for more signs of an economic slowdown, with the possible move into raw materials.

We believe that interest rates have bottomed.

Therefore, we expect that Treasury Bonds will not serve as a “safety net,” even though they have done so over the last ten years.

We believe the metals are trying to bottom, but do not merit a big position just yet.

What else do we believe and what signals are we waiting for?

Before we safely say “BUY” commodities, we are watching the U.S. dollar.

Until the U.S. Dollar index breaks (DXY) 95.90 on a weekly close, the current strength is not conducive for raw materials.

Should the dollar break that level, besides gold, watch sugar futures.

Forty years ago, my first trade ever was in the sugar pit in NY. It was the start of out-of-control inflation. Sugar is often a lead indicator. If futures clear and hold over 13.00, that’s a clue.

More on Bonds:

Powell knows all too well that lowering rates could give us hungry commodity traders a bonus. So, if he holds rates at current levels and the dollar declines, bullish for commodites. If he does anything more dovish, very bullish for commodities.

We believe Bonds have very little room to the downside and lots of room to continue to rise.

Equities:

Megatrends do not go away. Therefore, we look to those in infancy. Here are 5 for now.

Political unrest-with tempers flaring both around the world and here in the U.S., we are not happy to report that a “revolutionary” type of environment could very well increase this coming year. This will have a negative impact on most equites. And a positive one on commodities.

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Disclosure: None.

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