Dollar Index: As I pointed out in my research note of early September, the dollar index remains in a long term bear market. Despite a substantial rally, which has carried DXY to the highest level since July 2020, it remains down 1.80% (1.76 points) from its level of two years ago and lower by 5.36% (5.44 points) at this time five years ago. Although the shorter term weekly moving averages have improved with the rally, the longer term weekly moving averages remain in a strong bearish set-up, 50 week 91.95, 100 week 94.08, 150 week 95.17. If December U.S. dollar futures can rally above 96.562 and remain above this level for at least a week, the rally is likely to continue. If it penetrates 92.89, there is a strong likelihood that the move higher is over at least in the short term.
WTI Crude: On November 17, January WTI generated a short term sell signal and will generate an intermediate term sell signal if it penetrates 74.99 and remains below this level. A reversal of the short term buy signal does not occur until the January contract surpasses 81.67. October, November, December and January are seasonally weak months for WTI.
Copper: On November 17, December New York copper generated an intermediate term sell signal and after generating a short term sell signal on November 5. After topping in May of this year, copper has been trading sideways. Despite this, December copper remains 36.37% higher than this time one year ago.
The period from mid November until the turn of the year is typically supportive for copper prices, however there are numerous unique factors this year and next that will change consumption patterns. The weekly moving averages remain in a very bullish set-up and the 50 week moving average currently at $4.18 has acted as support since August. The market is likely to move higher at some point, but it is difficult to ascertain the catalyst.
Gold: December New York gold remains on short and intermediate term buy signals. Its three weekly shorter term moving averages are converging indicating substantial support. The 10 week stands at $1,789 (rounded) 20 week, 1,794, 50 week 1,802.
Gold will be entering its strong seasonal period at the end of December and its bias continues to be sideways to higher. Its firm tone in the face of the dollar rally and relatively strong interest rates is impressive. The open interest action in gold has been equally impressive. It rises on advances and declines along with price, which typifies bull markets. Gold should only be traded from the long side.
Bitcoin: On November 17, December CME Bitcoin futures has generated a short-term sell signal and will generate an intermediate-term sell signal if it falls below $52,392. The decline should be contained at the 48,170 level, but a move below this would be very negative. No recommendation.
To read about my analytical process for stocks, visit online booksellers, Amazon or Barnes & Noble and enter the title “How I Trade Stocks” by Garry Stern.
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