US dollar and US stocks both rebounded last week, but there were some differences in rhythm. U.S. stocks were revised after falling for several days, while U.S. stocks began to show signs of bottoming near key positions.
According to our default linkage between oil price and risky assets in the past, there is no small risk that US stocks will continue to go down, especially if the S&P 3910 position effectively falls below. Accordingly, dollar bulls should still be a relatively stable direction in the short term.
As a matter of fact, Dropping bags for safety was the best option when the S&P500 was above 4100 . Now the question before traders becomes, do you need to turn to short? We believe that there has been a downward signal in the short term, which can be further strengthened after breaking the position; In the medium and long-term performance, it is more likely to be a wide range of shocks, and the market is not ready for the next round of trend market.
The main reason is that, on the one hand, at the end of the year, the news from all directions began to decrease gradually, and the holiday environment and atmosphere usually meant that it was difficult to make big moves before February.
On the other hand, the guiding index, the US dollar index, is only at the rhythm of bottoming out and rebounding, and there is no sign of reversing back to the bull market immediately. Of course, from a trading point of view, the dollar has entered the buy range of 104-102.5 we mentioned last week. Whether it is a small rebound or Big bounce, a short-term bargain-hunting wave is not a big problem. It is expected that above 107.5, the US dollar will face challenges-it can still reach 110 when entering consolidation, but even if it strengthens, 110 is expected to be the limit of the first wave of rebound.
Compared with the clear picture of US dollar and US stocks (including crude oil), the performance of precious metals in the past two weeks reflects another variable. The most obvious feature is that it no longer follows the fluctuation of US stocks; Secondly, in terms of relative strength, silver shows no signs of weakness.
After the superposition of the two, it may imply that gold and silver will go out of a relatively independent trend, or begin to gradually rebind to the fluctuation of the US dollar index. Of course, the current comparison period is relatively short, and the reference value remains to be seen. If this trend and performance can continue throughout December, gold may shine again in 2023.
Specific to the price, the first pressure level of 1825/35 is not far away, but at present, it is also not an easy hurdle to overcome, and it tends to be contested. The good news is that the downward trend of gold/silver continues over the past few weeks, which is one of the most important characteristics that benefit the whole precious metal. We will continue to pay attention to the advancement of this sector in order to find possible suitable trading opportunities, and we are still in the wait-and-see mode.
Finally, it is the most mainstream expectation to raise interest rates by 50 BP in this week's Fed resolution. The probability of fedwatch exceeds 70%, and the probability of less than 30% is 75 BP. We think the result should be 50BP as expected, so there should be no big noise.
$E-mini Nasdaq 100 - main 2303(NQmain)$ $E-mini Dow Jones - main 2303(YMmain)$ $Gold - main 2302(GCmain)$ $Light Crude Oil - main 2301(CLmain)$ $E-mini S&P 500 - main 2303(ESmain)$
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