I will continue the theme of seasonality in this blog. We are seeing a big sell off in oil today (down over $3 a barrel to just over $63) and gold down about $10 dollars to $927 an ounce.
Seasonally, this is not the time of year for either oil or gold to rally. In addition, as I have stated before, commodities usually move counter to the U.S. dollar. While I am a long-term bear on the dollar, it is extremely oversold in the short term and I am expecting a rally in the U.S. Dollar Index (which is the U.S. dollar versus a basket of stocks) over the short term.
Sentiment against the dollar had just gotten too bearish. Whenever sentiment hits an extreme the market usually moves the other way.
Basically, I am looking for a counter-trend move, a pullback in commodities and a rally in the dollar before they ensue on their long term moves, which is up for commodities and down for the dollar.
See David Skarica's Top Gold Stock Picks for 2009 — Click Here
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