E Commodities Trading Opportunities Are Lower

There’s not a lot going on. Participants are squaring positions and preparing for the December 19th Fed announcement. It’s suspected the Fed will take their foot off the rate hiking accelerator in 2019. I think they probably will…how much is the question.

Lower oil prices help inflation expectations and targets; it gives the Fed a little wiggle-room. The US stock market is flat for the year – so there’s no immediate pressure of an overheating stock market. For those reasons, I think the Fed can back off a little here.

I think commodities will fare well in 2019. Timing the specific lows could prove tricky (commodities bottom in different intervals). The CBR (commodity index) looks poised for a 3-year low in Q1 2019. However, prices could bottom sooner is the Fed appears overly dovish.

I don’t expect a lot of trading opportunities between now and next Wednesday. Markets should begin to trend after the Fed delivers their 2019 outlook (in their own – cryptic way).

Gold - Pretty uneventful day. Gold is close to the 200-day MA, but there are no technical signs of topping.

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Silver - Prices rallied sharply in the morning reaching $14.82 and the upper boundary. Sellers came in, and prices ended with a bearish shooting Doji candle. I don’t think we will see a sustained move in silver until after the Fed statement.

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GDX - No change in miners. Nothing to support a top at this time.

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GDXJ - Juniors finished 0.65% higher. Nothing new to mention.

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SPY - Stocks closed their gaps. There was no bullish follow-through. The bulls need to push progressive closes above the 270 level. Otherwise, a test and potential breakdown remain possible below the long-term red trendline.

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WTIC - The oil sector was unimpressed with OPEC cutting 1.2 million barrels per day. Prices remain volatile, and there’s no clear trading advantage in either direction. I prefer to wait and see if oil reaches the lower Monthly Bollinerg band (near $40.00) early next year. I think that could result in significant gains.

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