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Strong U.S. Dollar Weighs On Blue Chip Earnings

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Earnings season is well underway,…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

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Forecast Summary: Commodities, Forex and Stocks

Our forecast down phase for WTI continues and was largely unaffected by the volatility seen in some markets last week. We could easily see price back down to $30 early in 2017. We expect this weakness to be reflected in many other parts of the commodity sector.

WTI Daily Chart

The Euro which had been showing some strength previously is now back on track, we still expect the Dollar to outperform most major currencies as we head in to 2017. The Euro having made a back-test against the Dollar is now likely to continue falling heavily as we end the year.

EUR/USD Daily Chart

We have been forecasting a correction in global stocks over the next six months. Our S&P500 forecast has remained on track for months, it has been indicating that we are on the verge of a period of weakness. Having recently seen lows not seen since July US stocks were the main beneficiary of the volatility seen last week. However we do not expect this volatility and short term noise to have any meaningful effect on the long term and we now expect to see the market drop in earnest towards the end of the year.

SPX Daily Chart

We still expect a continuation of our forecast down leg in commodities, a stronger Dollar and an even stronger Yen during the fourth quarter of this year. We anticipate our forecast Dollar strength will continue for some time and will create the conditions for some key markets to sell off for a period which will relieve some over bought conditions necessary for a healthy market.

You can view live short term forecasts at our website, they are a representation of our medium and long term forecasts which always show the full picture, prices tend to be more random day to day than they are week to week or even month to month. Our short term forecasts are always anchored against these larger patterns that barley change from week to week, this is what allows us to be so confident with our shorter term forecasts in spite of the increase in volatility.

Taking patterns in nature that repeat over different time frames like fractals as the basis for the forecast methodology, our forecast patterns can last for months and years, we create a most probable long term fractal pattern and then continually test it and model it over multiple time frames to ensure the pattern remains a probable event.

 

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