Open Trades:
Here's an idea of what I'm expecting to happen...
What Trades am I looking into?
In this video I discuss some things I'm waiting to occur in order to put my money into a few different trades.
If you're a trader and you watch the markets, you may have taken notice to the rise in treasury yields and a recent rise in the US Dollar index (DXY). We know that a strengthening dollar and rising yields can be bearish for stocks.
But the dynamic of US Treasuries and the dollar effect more than just stocks, but commodities as well.
Since commodities are priced in dollars, they rise when the dollar falls and go under pressure when the dollar goes back up.
So, there are a few trades I am looking into:
- Going short on the dollar
- Going long gold
- Going long oil
- Going long copper
The Dollar
Going short the dollar is something that I've been looking to do for a while now. With this short pump up recently, this might be a good time to get in on the action.
DXY on the daily chart...
The dollar took a spike up out of it's negative trend and met some nasty resistance at 95.00. Will the trend of a weak dollar continue? Or will it get stronger from here? I'm going to go with the major trend right now in favor of a weaker dollar.
The financial asset I will be using for this trade is UDN, an inverse ETF of the DXY index.
This leads me right into the subject of gold.
Gold
Gold, silver and other precious metals are one of my favorite topics. They are the asset that will hold our financial system together if a major crisis occurs like the hyper inflation of our currency.
Anyway, it's clear that if the dollar continues to go under pressure and lose value, gold will rise.
Gold on the weekly chart...
I've spotted a major tend line that gold is now touching on. With my expectations of a weakening dollar, it would make sense to go long with gold as well considering that they behave inversely of one another.
The financial asset I will use for this trade is an ETF called UGLD. It's a 3x's leveraged ETF of gold, so a rise of 1% for gold would be a rise of 3% for UGLD.
Oil and Copper
Commodities have been on the rise, Oil especially. Crude oil has recently pulled back after a terrible rise up, indicating possible volatility in the months to come. This volatility could be a good money maker if I end up on the right side of things.
Here's a snapshot of oil's price action (probably not surprising if you've bought gas lately).
The financial asset I will use if I get into this trade is USO, an ETF that tracks the price movement of CL1! contracts on the CME.
Copper is currently testing some resistance. I've been watching it for a while and should have gotten in before it shot up like it did.
Almost 8% gain in a matter of a week by copper.
If copper continues with the general trend, I will use the ETF CPER to take part in the price movement. However, I am waiting to get in. There may be a period of consolidation here after this big run up.
Here's a video summarizing these things:
I hope you found this video insightful. Upvote and resteem if you enjoyed it!
Disclaimer: I am not a financial advisor. The articles that I write are for educational purposes only. Do your own research and hold yourself accountable for the investments that you choose to make.
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