The S&P 500 has rallied significantly during the trading session on Wednesday as we continue to see a drive into equities due to the idea of stimulus and of course everything that goes along with that. Ultimately, the stock market has been in an uptrend for ages and I do not see how that changes anytime soon. With this, I think that it is only a matter of time before we would see longer-term traders continue to hang on and newer traders continue to pile in. The consolidation area underneath suggests that we could go as high as 4000, based upon the measured move.
S&P 500 Video 21.01.21
Furthermore, we also have the uptrend line underneath that is far below, so I think that even if we got a 200 point pullback, it is very likely that there would still be plenty of buyers willing to get involved. The 50 day EMA sits just above the uptrend line as well, so that uptrend line will continue to be very important. However, the last couple of days have shown us plenty of bullish pressure, so I think that we are willing to continue going higher as it looks like the earnings season will be a disaster by any stretch of the imagination.
Stimulus will continue to be a main driver anyway, even though the earnings season might be a reason for the short term move. At the end of the day, Wall Street moves on cheap money and that is really all that matters. As long as liquidity is being tossed into the marketplace, the S&P 500 will continue to rally to the upside and towards that psychologically important 4000 handle.
Silver markets will continue to be bullish as long as we have a strong case for stimulus coming out the United States, and at this point in time I think the $26 level is very crucial to pay attention to. The $26 level has offered plenty of recent resistance, and if we can break above that level it is likely that we go looking towards the $27.25 level. Ultimately, this is a market that I think will continue to see upward pressure, so even if we do pull back, I would be looking at silver as a potential “buy on the dips” type of scenario. Ultimately, I think that the 50 day EMA of course attracts a certain amount of attention and so does the $24 level. The $24 level has been supportive more than once, and the fact that we have stayed above at and bounce from there suggests to me that it is the new “floor the market.”
SILVER Video 21.01.21
To the upside, I believe that we will be looking at the $28 level above as an area where there should be a significant amount of resistance. I do believe that ultimately, we will find reasons to get long given enough time. The market probably breaks above there based upon an announcement of stimulus that opens up the possibility of a move towards the $30 level over the longer term. If we can break above the top of the $30 level, then it opens up the floodgates for a much larger move longer term. At this point, I do not have a scenario in which a willing to sell this market anytime soon.
The West Texas Intermediate Crude Oil market continues to be relatively noisy as we are hanging around the middle of the overall consolidation area between the $55 level on the top, with the $50 level on the bottom. This is a market that I think will continue to see a lot of noise overall, due to the fact that there are a lot of questions when it comes to overall demand. I do not see how demand picks up significantly, despite the fact that they are calling for stimulus to drive prices higher. If crude oil rallies, it is going to be due to the US dollar falling more than anything else as we had already seen a lack of demand before the pandemic hit.
Brent markets were slightly positive during the trading session on Wednesday initially but gave back the gains as we are getting a bit exhausted. I think at this point we are starting to ask the question as to whether or not we can continue to go to the upside, and quite frankly I think at this point we are getting stretched. I do expect to see a bit of a pullback in the short term, perhaps back down towards the $50 level area. The Brent market will suffer at the lack of demand going forward, and therefore I believe that eventually we have to come to grips with the idea that simple stimulus will not be enough to send oil markets screaming to the upside any further. At this point in time, I think that short-term selling might be possible, but you need to be very cautious about overexposing yourself.
Natural gas markets sold off significantly during the trading session on Wednesday to break down below the 200 day EMA. That being said though, I think that it is only a matter of time before we bounced a little bit in order to sell off yet again. Given enough time, I think that the market will probably go looking towards the $2.40 level, possibly even lower than that. After all, as the temperatures warm up in the United States, that will drive down the price of natural gas as the demand also drops.
NATGAS Video 21.01.21
To the upside, the $2.80 level offers a significant amount of resistance and I think now offers the “ceiling in the market” that we are waiting to see. Ultimately, I think that this is a market that cannot be bought under pretty much any circumstance, due to the fact that the demand of the United States will continue to drop, not only due to warmer temperatures but the fact that the economy is going to be slowing down. Stimulus does not matter, because quite frankly it did not matter before the pandemic.
Yes, there may be a sudden surge economically, but the fact that natural gas is typically used as a heating commodity does not bode well for the upcoming several months. As long as that is the case, I think that you continue to short signs of exhaustion after small bounces. All things being equal, this is a market that I have no interest in buying, at least not until we start talking about trading winter contracts again.
Gold markets have rallied significantly during the trading session on Wednesday to break above the recent resistance area and go looking towards the 50 day EMA. By doing so, the market is likely to continue to go higher over the longer term, perhaps reaching towards the $1900 level. I think that short-term pullbacks will continue to offer buying opportunities and therefore I think that this is a “buy on the dips” market going forward. This makes quite a bit of sense, because quite frankly there is a ton of stimulus coming, and of course there is a whole litany of potential problems out there that could have people running towards safety.
Gold Price Predictions Video 21.01.21
The 200 day EMA underneath should offer plenty of support, near the $1820 level. At this point, the $1800 level underneath is a large, round, psychologically significant figure, and the fact that we ended up forming a bit of a hammer suggests that we are probably going to continue to find plenty of support underneath, based upon not only the fundamental situation, but the structural and technical support level. I have no interest in shorting gold, I think that it is trying to form a longer-term basing pattern, as we will certainly see currency destruction be a theme of 2021 going forward, not just in the US dollar, but multiple other currencies around the world.
Gold serves far too many different reasons right now to think that you should be a seller. Ultimately, I believe that the market will eventually break out to fresh highs later this year so therefore I look for opportunities to pick up gold “on the cheap.”
The US dollar has pulled back a bit against the ¥104 level, an area that has been important more than once. In the short term, it looks as if the market is simply going back and forth and trying to figure out what it wants to do next. We have been in a longer term downtrend, so I think at this point in time the market probably continues to go to the downside. Short-term rally should continue to offer selling opportunities right around that ¥104 level, and I think that the resistance probably extends all the way to the ¥105 level.
Near the ¥103.50 level, I think there is a certain amount of support in that general vicinity that is worth paying attention to, especially if we can break down below there. If we do break down below there, then it is likely that we go down towards the ¥102.50 level, perhaps even lower than that. We have been in a very extended downtrend for a while, and I simply just do not see that changing in the short term.
Furthermore, if we are going to massive amounts of stimulus, one would have to think that eventually the US dollar needs to continue going lower. What makes this trade a little bit more confusing at times is the fact that it also is highly sensitive to risk appetite, so it is a little bit of a “push/pull” type of situation in the short term, and that explains a lot of the choppiness that is seen on the chart.
The British pound has rallied to kick off the trading session on Wednesday on the bullish foot. However, the market has pulled back from the 1.3750 level again, an area that seems to be a bit of an issue in general. With this being the case, I think that the market probably finds pullbacks as attractive, especially near the 1.35 handle underneath as it is not only a large, round, psychologically significant figure, but it is also an area that features the 50 day EMA now.
Because of this, I think what we are looking at here is the opportunity for value hunters to come back into the marketplace and take advantage of what is typically going to be thought of as “cheap pounds.”
The 50 day EMA itself of course attracts a lot of attention, but at the end of the day I think what we are seeing here is the likelihood of a “continuation of the buy on the dips attitude” that we have seen for so long. Stimulus is one of the main drivers of this pair to the upside, and although we already know that there is going to be more stimulus coming out of the United States, the reality is that we do not know how much of it there will truly be at the end of the day.
Because of this, I think what we are looking at is an opportunity to take advantage of what has been a very strong trend, but currently is suffering at the hands of a little bit of doubt when it comes to whether or not the stimulus package is going to be as massive as once thought.
The British pound has rallied a bit during the trading session on Wednesday, but continues to struggle with the ¥142.50 level, as we have pulled back significantly from that level. Nonetheless, this is a market that will continue to be supported underneath, as there are plenty of buyers on dips from everything that we have seen. The more, I do think that the “risk on trade” will probably continue to be the favored one, but we have a lot of work above that we need to get through.
The ¥140 level underneath continues to be rather important from not only a large, round, psychological important figure standpoint, but the fact that it has previously been both structurally supportive as well as resistive. Because of this, I think that we probably get a short-term pullback towards that area before we may get a bit of extended buying pressure. The 50 day EMA sits just below the ¥140 level as well, so that makes that area interesting from that standpoint. Furthermore, the trend has clearly been to the upside when it comes to the British pound in general, so there is no need in fighting that.
It appears that the trend is trying to build up enough momentum to go to the upside even further, so even though this candlestick suggests that we are going to fall in the short term, I do not like the idea of shorting this pair, rather I think that we are more than likely going to continue to see a deaf opportunities to buy the dip that it is exactly what we should be doing over the longer term.
The Euro initially tried to rally during the trading session on Wednesday but then turn things around to show signs of negativity. At this point, it looks like we are probably going to go down towards the 1.20 level, although I am not necessarily looking to sell this pair. Quite frankly, this is a pullback that is desperately needed, and therefore I think that it is welcomed by both bullish and the parish traders alike.
The ECB has been active behind the scenes doing what is tantamount to yield curve control, so that may work against the Euro going forward. The Euro has been rising rather rapidly and although there has been no direct intervention in the currency markets, the reality is that the market had gotten far ahead of itself as it reached towards the 1.23 level. The weekly chart looks somewhat ominous, but really at the end of the day I think there are plenty of buyers near the 1.20 level, extending down to the 1.19 level where buyers would be looking for value based upon the idea of stimulus in the United States.
However, it should be noted that the $1.9 trillion stimulus package that Joe Biden suggested is not necessarily a “slam dunk”, and I think at this point in time it is likely that we will see a lot of noise when it comes to the idea of that stimulus shrinking the US dollar. The consensus is of course that the US dollar continues to fall in value, but we had gotten so overextended that a correction was desperately needed. We are still in the midst of that correction.
The Australian dollar has rallied a bit during the trading session on Wednesday as we continue to see more of a grind to the upside. The Aussie of course is part of the “reflation trade”, and therefore I believe that the Australian dollar probably continues to be bullish more than anything else, but at this point in time I think that what we are looking at is a little bit of exhaustion, perhaps the market will try to build a bullish flag here.
This does not mean that I am willing to sell this market, just that I am not expecting a lot over the next few sessions.
To the upside, I believe that the 0.80 level is the target, but it will take a while to get to that area. In time will more than likely be bought into as they offer value, extending all the way down to the 0.75 handle, especially as the 50 day EMA has broken above that region.
However, I do recognize that this probably comes down to stimulus more than anything else, so that is worth paying attention to. Stimulus of the United States will continue to weaken the US dollar but there are some questions about whether or not Joe Biden can get a huge package through Congress, and as long as that is the concern it will more than likely cause a bit of hesitation.
However, once it is all said and done, there will be a lot of stimulus, and therefore it is likely that we will continue to see buyers on these dips regardless. I have no interest in trying to short this market anytime soon.
The S&P 500 rallied a bit during the trading session on Tuesday to reach towards the 3800 level. The 3800 level of course is an area that has offered a bit of support and resistance more than once, and I think at this point in time it is obvious that there are a lot of concerns about whether or not the stimulus will be big enough to keep Wall Street satiated. At the end of the day though, this is all about stimulus and has nothing to do with anything other than that. Yes, its earnings season but over the longer term that tends to have very little in the way of what happens next, it is all about that cheap money.
S&P 500 Video 20.01.21
We have an uptrend line underneath that should continue to support this market in general so therefore I look it dips as potential opportunities to get long in a market that is essentially one way over the longer term. The uptrend line and the 50 day EMA converge quite nicely underneath so that would be an area that I would be very interested in. As far as shorting is concerned, I would not have any real interest in doing so but could be convinced to take a short-term selling position if we did somehow break down below the 3600 level, something that is not going to happen in the next few days.
To the upside, I believe that we will eventually go looking towards the 4000 level, as soon as Wall Street gets the “all clear” of more cheap money being thrown in its direction, and perhaps once we get past the bulk of earnings season.
Silver markets initially pulled back during the trading session on Tuesday to reach down towards the $24 level. At that point, the market turned around to bounce significantly and ultimately it seems as if we can break above the $26 level, then the market could very well go looking towards the $28 level over the longer term. All things being equal, this is a market that is well supported underneath, and quite frankly moving on the idea of stimulus still. The US dollar falling and of course is fuel for silver to continue going higher, and I think that is what you need to pay attention to more than anything else.
SILVER Video 20.01.21
If we can break above the $26 level, I think it will attract more in flow of money, as it would probably signify the US dollar falling as well. Janet Yellen is testifying in front of Congress during the trading session for her confirmation hearing, so it is possible that traders may get some idea of just how dovish she is going to be. Quite frankly, I do not think the Janet Yellen has it in her DNA to be anything remotely close to hawkish, so more than likely we will see a continuation of the US dollar depreciation eventually. In the short term though, we have gotten a little bit overstretch when it comes to selling of the US dollar so I think that the silver markets may more or less go back and forth in the short term with an upward bias.
The West Texas Intermediate Crude Oil market rallied a bit after gapping lower at the open on Tuesday. At this point, we are simply trading on the idea of stimulus, and nothing more. That is what is driving the commodity trade in general, not necessarily the idea of demand. (Yes, I understand that stimulus is supposed to drive up demand, but it has in the last three times.) Nonetheless, it is the game we are playing right now so looks like buying dips continues to work. I believe that the $50 level is the “floor the market”, with the $55 level above being the current resistance barrier that the market is eyeing. Pay close attention to the US dollar, because the inverse correlation probably continues.
Crude Oil Video 20.01.21
Brent markets also gap lower to kick off the trading session only to turn around and show signs of life again. By doing so, the market then looks likely to test this $56.50 level that had caused resistance during the previous session, and perhaps even go higher. You could make an argument for a little bit of a bullish flag, but at the end of the day it is probably a weak one at best. The Brent market of course continues to move based upon the idea of the reflation trade, which although in full effect right now, certainly has to be thought of as precarious at best. After all, it seems like the matter what happens, there are more lockdowns coming on an almost daily basis. Looking forward, the idea is that we will be beyond that, but crude oil demand was slipping before the virus hit.
Natural gas markets gapped lower to kick off the trading session on Tuesday and then just kept on going to the downside. At this point in time, the market looks very negative, but we did fill a bit of a gap so that could cause short-term support. All things being equal, the market is going to continue to be very noisy, but of course it is moving mainly on the idea of warmer weather coming more than anything else. The 200 day EMA underneath is an area that could cause a little bit of support near the $2.48 level, and that of course the $2.40 level. All things being equal, this is a market that I think does go lower, as demand simply should fall through the floor.
NATGAS Video 20.01.21
In the meantime, I like the idea of fading short-term rallies, and it now looks as if the “ceiling in the market” has drifted down towards the $2.80 level. To the downside, we could go as low as $2.00, but that is probably going to take some time. After all, there will probably be a short-term cold snap or two ahead before we get into the springtime in America, but we are already trading the February contract, and more than likely will continue to see more bearish pressure the further out you go in the year.
The market will continue to be very choppy to say the least, but this simply means that you need to keep your position size somewhat reasonable. I think that given enough time the market will continue to rollover, because of the major amount of oversupply that is still out there, despite the fact that we have just gone through winter.
Gold markets initially fell during the trading session on Tuesday to break down below the 200 day EMA. However, we have turned right back around to show signs of support, as the 200 day EMA of course attracts a certain amount of attention. That being said, the market has also shown signs of support at the $1800 level. That is a large, round, psychologically significant figure that has attracted attention in the past, so ultimately it is not a huge surprise to see that we have seen this happen.
Gold Price Predictions Video 20.01.21
The market of course is reacting to the idea of further stimulus coming out the United States, so I think at this point in time it is obvious that people will be paying close attention to Janet Yellen and her testimony in the Senate, and of course what she may or may not be able to loosen monetary policy even further. Stimulus of course is at the forefront of almost everything that happens these days, which should drive up the value of gold over the longer term.
In the short term, the market is likely to see more of a sideways market, as we are trying to figure out whether or not the US dollar will start falling apart again. Ultimately, the market will probably go looking towards the 50 day EMA, perhaps even towards the $1900 level as well. This being the case, I do believe that the market is likely to find buyers.
The US dollar has rallied initially during the trading session on Monday to reach towards the ¥104 level, which of course is an area where we have seen quite a bit of action at recently. The market certainly looks as if it is trying to build up enough momentum to continue going higher, but I think there is a significant amount of resistance that extends all the way towards the ¥105 level. It is not until we break above there that I would be bullish though, because quite frankly we are still very much in a major downtrend. With that being the case, I still prefer to sell short-term rallies, mainly due to the fact that there is so much stimulus coming out the United States.
USD/JPY Video 20.01.21
Traders will course be paying attention to whether or not we are going to see massive amounts of stimulus coming from the United States, and of course we have to decide whether or not that stimulus is going to be big enough to really weigh upon the US dollar longer term. The one problem with this trade of course is that we are extraordinarily low at this point in time, and as a result it is most certainly worth paying attention to the fact that we may get the occasional bounce. In fact, I believe that is essentially what we are looking at currently, and I do think that eventually people will start to focus on the trend yet again. With this, I think that eventually we could go as low as ¥102, but it is going to be very noisy and choppy trading.
The British pound rallied to kick off the trading session on Tuesday as we continue to see a general grind to the upside. That being said, I do think that it is only a matter of time before traders try to break out to the upside, perhaps based upon the stimulus situation in the United States. In the short term though, I suspect that we may have a little bit more back-and-forth trading ahead of us than anything else. This would typically be the case when you are getting a bit stretched, and I do think that the US dollar is oversold, at least in the short term.
GBP/USD Video 20.01.21
As the markets are waiting to see what Janet Yellen says about any potential monetary policy in her US Senate confirmation hearings, keep in mind that the occasional headline could throw this market around. That being said, she is extraordinarily dovish most of the time, so it is difficult to imagine that she would suddenly change her tune. In other words, we will more than likely see more pressure on the US dollar, but we may need to kill some time in this area after these massive gains.
Furthermore, we also have to keep in mind that the United Kingdom is locking itself down, and therefore the economic picture in the UK is certainly suffering. If we continue to see lockdowns though, there may be a short-term catalyst for this market the pullback even further. Currently, I have the 50 day EMA, near the 1.3350 level as support for the longer-term trend.
The British pound rallied against the Japanese yen during trading on Tuesday, breaking above the top of a hammer from the previous session. This is a classic bullish signal, but there is significant resistance above near the ¥142.50 level. I think at this point we will probably have to go back and forth in the short term to build up the necessary momentum, because quite frankly there are a lot of questions when it comes to the UK economy. Do not get me wrong, I am not saying that we should short this market, just that consolidation between the ¥140 level and the ¥142.50 level makes quite a bit of sense.
GBP/JPY Video 20.01.21
If we can break above the ¥142.50 level, then the market is likely to go looking towards the ¥145 level. That is an area that will attract a lot of attention due to previous action in the fact that it is a large, round, psychologically significant figure. Looking back at the support at the ¥140 level, we also have the 50 day EMA coming into the picture so it does make sense that perhaps we would see a little bit of support in that area and go looking towards buying essentially what would be “cheap British pounds.”
Keep in mind that this pair is highly sensitive to risk appetite so it is certainly something that you should pay attention to. If stock markets and other risk assets in general start falling, you will probably have to pay close attention to this pair. However, they will take off to the upside that should continue to add bullish pressure here.
The Euro has rallied rather significantly during the trading session on Tuesday to bounce from the 50 day EMA. This does suggest that perhaps the uptrend is still very much intact, but currently I do not like placing trades at this spot as we do not have significant support or resistance in the near term. I believe that the 1.20 level underneath is much more important than what we are seeing tested right now, thereby having me look at this market as one that probably grinds back and forth in this general vicinity.
EUR/USD Video 20.01.21
To the upside, we could get his high as the 1.23 level and still not change much. I believe that we are essentially stuck in a 300 point range, something that is quite common for the Euro after all. We have seen a lot of back and forth and I think really at this point most of what is driving this market is the idea of stimulus coming out the United States, and at this point in time it looks to be massive. However, one should not forget that the ECB is more than likely going to do quite a bit themselves, so we will have to see whether or not this can continue to the upside and break above the massive resistance that starts at the 1.23 handle and extends all the way above at the 1.25 handle. At this point, I do not see that happening anytime soon.
The Australian dollar has rallied a bit against the US dollar during the early hours on Tuesday. That being said, the market is still very much in an uptrend so this should not be a huge surprise, and with the Senate confirmation hearing of Janet Yellen coming, it is very likely that traders will be looking for any reason they can to extrapolate that she is going to be extraordinarily dovish, which is historically true anyway. With this being the case, traders are going to be looking at the possible reflation trade, meaning that they will be looking towards commodities and that is often seen as a reason to get long of the Aussie dollar itself.
AUD/USD Video 20.01.21
To the downside, the 0.75 level is an area that a lot of people will pay attention to due to the fact that it is a large, round, psychologically significant figure, and of course an area that features the 50 day EMA and previous support anyway. That being the case, we do pull back towards that area think that a lot of people will be looking to take advantage of “cheap Aussie dollars”, and thereby buy the dip.
I do not really have a scenario in which I am looking to sell the Australian dollar anytime soon, but it is worth noting that we are somewhat stretched at these levels, so a little bit of choppy and back and forth behavior would make quite a bit of sense. To the upside, I believe that eventually the Australian dollar will go looking towards the 0.0 level, an area that obviously is a large, round, psychologically significant figure as well.