Hello Everyone,
What a week it's been here in the UK with Brexit negotiations falling apart! There's been a lot of (very good) coverage of that this week, so I want to focus today’s note on what's happening elsewhere in the markets Brexit chaos aside.
As a reminder, we produce our trading Checklists for multiple currencies and asset classes including equities, crude oil, and gold. Our crude oil Checklist, in particular, has been absolutely on point again this month, as the ‘black gold’ has collapsed and entered a bear market. It's not always about the big directional moves though, and sometimes you can make good money trading the range when markets are sideways. This has been the case in gold, which our Checklist called correctly with a neutral score coming in to the month of November (I featured this chart in this week’s Trading Club meeting, and explained where there were at least 2-3 great trades in the past couple of weeks using the 60 minute RSI as a trigger).
Now, if you’re trading gold you need to have a view on the US dollar. Gold is considered by many as a ‘currency’, and Lex explains a lot more about the history and purpose of gold in our Million Dollar Traders course (you must check it out if you haven’t already seen it!). So lets cut to the chase and show you how our FX Checklists scored the various currency pairs, including the US dollar, with a couple of them obscured to preserve value for our fully paid subscribers.
As you can see, the US dollar has a positive score suggesting strength this month. The dollar index (DXY) has indeed appreciated, with the greatest gains following the oversold hourly RSI signal in the first few days of November.
But what is even more apparent in the Checklist FX table is the opportunity to short the Euro (EUR, -2.5) and Canadian Dollar (CAD, -2.5) against the greenback (USD, +1). Here’s the short EURUSD trade, which fell from 1.14 towards 1.12 at the low... (Disclaimer: Our service is intended for educational and informational purposes only and should not be considered investment advice. Do not make any decisions based on the articles and material presented on our website and never trade with money you cannot afford to lose. We cannot be held responsible for your trading results. For more information, please check Risk Disclosure - T&C.)
And USDCAD (think, long this chart - hoping for it to rise - as the Loonie weakens versus the greenback) where there was another great trade from 1.3100 towards the high around 1.3250. (Disclaimer: Our service is intended for educational and informational purposes only and should not be considered investment advice. Do not make any decisions based on the articles and material presented on our website and never trade with money you cannot afford to lose.)
I had intended to conclude this week’s post here, but since we are discussing the Canadian dollar (and I am in the flow!) lets conclude with a look at that short crude trade that we established in late September and have maintained every since (note: for those of you who are yet to take the Million Dollar Traders course, it may not be obvious, but CAD and Oil are highly correlated). Firstly, our Checklist, where our ideas always start:
And then, the beautiful chart showing how one could have nailed the short… say no more!
There’s always something moving in the markets, and we’re always prepared for the best trades here at the Academy. If you would like to join me for arguably the best research process and market analysis available to private investors each week, we look forward to hearing from you! And if you are serious about improving your investing and trading expertise, check out our Million Dollar Traders course today and sign up for an early BLACK FRIDAY special discount!
Have a great weekend,
James
James Helliwell | Chief Investment Strategist
Disclaimer: Our service is intended for educational and informational purposes only and should not be considered investment advice. Do not make any decisions based on the articles and material presented on www.lexvandam.com and never trade with money you cannot afford to lose. We cannot be held responsible for your trading results. For more information, please check Risk Disclosure - T&C.