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Crude Oil & the Dollar Print
Written by Site admin   
Sunday, 29 January 2017 19:44

Crude Oil and the US Dollar have a long term correlation, it's inverse, so as the Dollar goes up, Oil goes down.

Since Trumps election we've had a break out and bull run in the Dollar and, if as seems likely, there will be a series of US interest rate rises this year, there's more strength to come. So, if the correlation is inverse and the Dollar rises, Crude Oil should fall, right?

WTIDXYJan17

On this chart I inverted the DXY, in red, so withe the correlation they should both be running in the same direction. Problem is, the correlation broke last May. Since then they've moved opposite the long term correlation and have, this month, started to converge again. As the arrows there should be much more of this to come. Either Crude falls or the Dollar strengthens.

 

From the blog

The NASDAQ keeps running

 Way back, on the run up to the millenium, we had the tech boom. Add the word 'Internet' to any start up and away it went stock price rising into the stratosphere. Earnings, who needs earnings? You just needed the magic words, 'Internet start up' and the money cascaded in.

'It's different this time' was the cliche of the times, and it was - until it wasn't.

Where are we now? In another tech boom, 1800+ points above the last peak in 2000.

The soon to be available, Nasdaq Trading course indicators with the FibFinder add on are suggesting the time might just be ripe for a top. Notice how the Colour Charts do a great job of defing the momentum trend runs, and changing colour when it's prudent to take profits. It'll be time to take cover when the next candles turn red.

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