Forecast for the week January 31 – February 4:
In the first half of the week, I expect a decrease in quotations against the background of seizure of liquidity from the US Ministry of Finance, which will hold a number of auctions within which will store treasury bonds in the amount of more than $ 114 billion. The US Federal Reserve. In the second half of the week, technical correction is possible. In general, I expect a reduction in the stock market in the next two months, since the SP500 wide market index looks overbought, if compared with the dynamics of GDP. For example, for the period 2020-2021 G. Nominal GDP rose by 12.6%, and the stock market went up by 48.5%. The Fed expects that this year the nominal GDP can grow by 6.7%. Thus, the SP500 index must be quoted at a mark of 3867 points. Of course, this is just a landmark – the index can be quoted above or Below this level. But I think that the decline in this mark from February to April is quite real, and then everything is in the hands of Fed.
Trading Recommendation: SELL 4460/4510 and Take Profit 4200.
The oil market is traded on a seven-year maximum and this happens over a month and a half before the upcoming increase in the margin of the US Federal FERS. In my opinion, in the field of psychological level of $ 90 per barrel, it is advisable to open the SELO’s positions per good technical correction. First, the dollar is growing in the foreign exchange market, which is negative for “oil bulls”, since assets have a reverse correlation. The dollar is becoming more expected to increase the rates of the Fed and in the coming weeks we will observe an increased demand for US currency. Secondly, we see A good decrease in the SP500 stock index, which is also negative for oil, as the assets correlate well by interact. Oil and the US stock market are “risky assets” who go to each other. If you carry out historical parallels, That SP500 index starts the movement before oil. The American stock market is now trading 9% below the maximum of this month. Now turn for oil.
Trading Recommendation: SELL 90.20 / 91.90 and TAKE PROFIT 85.15.
Shares of gold miners in the coming weeks awaits testing for strength, since a downward trend on the expectations of the coming tightening of the US FRC for the expectations of the coming tightening of the US FRAS market may increase in the precious metals. In the next one and a half months, Fed will buy Treasury bonds worth $ 36.3 billion, after which it will complete the program of quantitative easing and proceed to increasing the accounting rate. For gold and other metals, this is a negative signal, since stock sales are historically very sensitive to the tightening of the Fed monetary policy. It should be noted that the gold mining companies themselves are awaiting the quotes of the yellow metal at the level of $ 1500-1600 per ounce and the decline in prices is quite a logical process, taking into account the current market opportuncture.
trading Recommendation: SELL 18.55 / 18.90, TAKE PROFIT 17.75.