The market broke to new highs over the past month. It seems that we are on a brand new start to the year. However as volumes are still low, it seems that the professionals are still staying away from the market. Usually this is the case for the period from October to January. This is one of the most volatile periods and I’ve also been either out of the market or trading only small lots. For me, I’m very happy trading commodities. So my market analysis for the next few weeks will only consists of commodities as I’m not planning to trade the indexes for the forseeable future. Let's shall see what the January Barometer brings at the end of the month before I plan my next move.
Daily chart for the Dollar (UUP)
UUP dropped below it’s 50 day moving average. It’s not forming any clear signal up or down. I think this one is going to go sideways for a bit.
Daily chart for Gold (GLD)
Daily chart for Silver (SLV)
Both gold and silver are forming a topping pattern over the past few weeks. Bullish momentum is dying off fast. I’ve been waiting to short silver for a month already. If this pattern continues, I might be able to short it sometime in February.
Crude Oil (USO)
USO just did a bullish bounce off an important retracement level at 38.04. Next target at 41.84.
Natural Gas (UNG)
I’ve been screaming natural gas for the past few months. I believe it’s at the beginning of a huge rally that may have already started to move up to around 34. My friends and I had been accumulating for the past month and would continue to do so. It may take a few years to reach 34 but it’s still better than keeping our money in cash in this inflationary environment.