be aware to always trade according to the right signals, this is just an opinion 🙂
US:
For the US markets I’ll expect a correction in February. As with the last run we are overdue anyway. Corona Virus fear has been shaken off by the markets already and as long as there won’t be any major crisis arising out of it we should encounter a normal seasonal correction before we go up again. We might see some rise again in the middle of the month prior to Presidents’ Day. However, I expect markets to be flat at best or slightly down.
EU:
Germany now has had a new all-time high officially, just to get beaten down again. I also expect retracements in the European markets for February with beginning and end of the month down and some upwards movement the week before options expiration day. Sweden, Netherlands and France all look similar to the Eurostoxx and seem to be already on the decline.
UK:
After the prognosed gains due to the election win of the conservative party, the UK market is coming down again and is following the trend of the other markets. I expect the UK market to be highly volatile over the next few months with every announcement by either the UK or the EU regarding the handling of Brexit and the trade agreements between the UK and either the EU or the US. For February I expect a further decline at the beginning, an upwards movement in the middle and some downwards movement followed by that to end the month flat.
Currencies:
USD:
It happened exactly what we said, the USD turned around and went up in January and my expectation is that we continue to do so in February. There will most likely be a retracement in between before we continue the rise against the other major currencies. I currently participate in it in a bundle of currency trades all long for the US Dollar.
EUR:
For February I expect the Euro to be down against the US Dollar and higher against the Japanese Yen (JPY). So far the Euro did exactly what I said in the last outlook in January, it gave away its earlier wins against the US Dollar and then started to fall against it. Very rewarding trade.
GBP:
As we predicted the January was slightly up. We are now coming back a bit and I expect the market to go slightly up again after that correction. For the medium and long term I am still convinced that the British Pound is massively undervalued, especially compared to the Euro. Since we don’t have the problem yet with negative interest rates in the UK I expect the economy in the UK to be more dynamic and grow more than the European pendant. This will give some more upwards potential to the GBP.
Commodities:
Oil:
Mainly politically driven at the moment. For February we don’t expect big movements, however later on we will see some more traction in the oil prices.
Gas:
One of the trades that I will look very closely at over the next few months since I expect the prices to go up due to several reasons. At the moment it looks like we found some support which could be the start of a medium term upwards movement.
Gold:
We saw our first target and even our second target in gold. Very rewarding trade, also for many of my students. At the current levels we see some sideways movement. I expect the main run to be over and to see some retracement before we will likely go up a little again until the end of February.
Silver:
After the current retracement I expect silver to go up until the end of the month and end up higher again. Both the gold/silver ratio as well as the lagging silver price development seem to be promising factors at the moment.
Copper:
After the current drop I expect first a retracement for February and then higher prices even throughout March. Another trade I closely watch over the next few days/weeks to get a good entry into it. As the latest weakness in manufacturing seems to better, the demand for copper is likely to go up again and support higher prices.
Coffee:
As the current drop is quite big I am looking forward to a nice and rewarding retracement. Getting the right entry will be key. I expect February to end with slightly higher coffee prices, however I want to participate in the retracement that can be a big swing again.
Soy oil/Soy beans:
I expect higher prices for both and as we see quite low prices at the moment I expect a run in prices even over several weeks and months. Looking for a great entry and then trade every upwards swing at least until April.
Lumber:
Still in the upwards channel, however with a low dynamic which might be an early indicator that the upwards movement might return. As soon as we leave the channel we have to decide whether we want to follow it down or wait for new seasonal demands that will push prices again. I expect a retracement and lower prices in the short term and a turnaround into an upwards movement afterwards.
As always, make sure you do your own analysis. Happy and successful trading ☺
