Smart investors start seeing the important market trends of 2018. They are successful because they see new trends before they arise, they follow them closely and they invest in them a bit after they get started. This article tries to forecast the commodities trends of 2018.
Right now, we see leading markets hitting mega resistance and mega support. That is exactly the point where new trends will start. That is because of a phenomenon we tend to call intermarket dynamics: leading markets bouncing from resistance / support or break out / down influence other markets. Read more about our secrets of markets – intermarket trends method.
As seen on the charts, King Dollar is hitting support going back more than a decade, gold is hitting resistance of its 7-year bear market, Dr. Copper is hitting resistance going back more than a decade.
What happens in those three markets will determine the strongest market trends in the coming months into 2018, through intermarket dynamics. Make no mistake, this will be major, says InvestingHaven‘s research team.
Commodities trends of 2018
Needless to say, the U.S. dollar chart is the key influencer for all commodities. The long term chart makes the point on how oversold it is. The 92 to 93 area represents long term support which is formed by the top of 2006 and the bottoms of 2015 / 2016. A break down is not very likely in our view … but never say never.
Smart investors watch very closely what happens in the 92 to 93 range.
Gold is a specific commodity as it is driven both by the fear trade but also by the inflation trade. So gold should be interpreted and read in combination with other commodities and markets, says InvestingHaven’s research team.
- If the dollar continues to fall, it will be hugely bullish for gold and it will turn into a new long term bull market.
- If the dollar bounces from here, it could have bearish implications for gold.
- The only wildcard for gold is that it could act as a fear trade because of maximum complacency in markets right now.
That’s how difficult it is to read and forecast the gold market.
Last but not least, Dr. Copper is hitting major resistance, going back more than a decade. That happens right at a time when the dollar hits major support. If the dollar falls, it would be inflationary, and both gold and copper would break above their mega resistance. The opposite it true as well. That is, in a nutsell, the commodities story of 2018.
