As long as we stay between these two lines, it will probably be a situation where you do a lot of short-term range trading.

The West Texas Intermediate Crude Oil market has been very volatile over the last couple of days, and at the beginning of Thursday, we did see some selling. That being said, the market is seemingly respecting the 50 Day EMA, as that is where we, the market, have seen buyers come back in. The candlestick for the trading session looks as if it will form a hammer. If we break above the top of the candlestick, then it is likely that the market will go to the $110 level. The market also has a downtrend line that coincides with that level.

The market is breaking below the 50 Day EMA could send this market down to the $100 level, which is where the uptrend line from the triangle resides. The market continues to see a lot of volatility, but ultimately it seems as if we are still trying to figure out where we are going more extended term. As we continue to compress price action, it means that a nurse is building up in the market, and it is possible that we could have an explosive move in one direction or the other.

Keep in mind that a couple of different things seem to be moving the crude oil market more than anything else, including the disruption of the Russian supply. That drives prices higher, but at the same time, we have to wonder whether or not there is going to be demand going forward, as it looks like the global economy is slowing down. The volatility will continue because there are a lot of questions in both directions.

Adding more volatility to the market is that the US dollar continues to grind higher, which suggests that we are going to have downward pressure on oil, although that does not necessarily have to be the case. Both can rise at the same time, but if the US dollar spikes rather quickly, that is generally a sign of fear in the market, which for the most part, has people looking away from commodities such as oil, which are typically thought of as a “risk-on” type of profile. Either way, as long as we stay between these two lines, it will probably be a situation where you do a lot of short-term range trading.

The Singapore dollar just does not have the liquidity to fight a sudden panic move into the greenback.

The US dollar initially on Wednesday to reach the 1.3833 level against the Singapore dollar. However, there have been enough buyers to turn the market around and show signs of life yet again. Ultimately, this is a market that looks as if it is trying to break above the 1.40 level given enough time, but obviously, this has been a bit of a stretch.

The strength of the US dollar has been quite impressive over the last several weeks, and I think that given enough time we will continue to see more strength, especially when it comes to smaller currencies such as the SGD. The market is clearly bullish, but the occasional pullback is best thought of as a potential buying opportunity as it could offer you a bit of value in the greenback. Keep in mind that there is a multitude of reasons why the US dollar is strengthening, and you need to keep all of them in mind. The first thing would be that the Federal Reserve is looking to become very hawkish, and that drives up the yields in the bond market, making the US dollar more attractive. Furthermore, inflation is going to continue to be a major problem for most economies around the world, so people will run to the US dollar for safety.

When you look around the world, this is a dire situation for a lot of markets, although it should be noted that the economy of Singapore will probably be quite a bit more stable than some of the other ones. The 1.38 level underneath should be supported, and most certainly the 1.37 level will be on any type of significant pullback. I think it is a likely move that we see to reach the 1.40 level more than anything else.

Keep in mind that a lot of what we are seeing is everybody running for the US dollar in one shot, and that is going to transfer not only to this pair but multiple other smaller pears as well. The Singapore dollar just does not have the liquidity to fight a sudden panic move into the greenback. The 50-day EMA is approaching the 1.37 level, which I would consider to be the “bottom of the overall uptrend.”

The quicker the rate of change, the more likely it is to cause problems for the stock market overall.

The S&P 500 futures initially fell during the trading session on Monday, reaching the 4360 handle before turning around. By doing so, it looks as if the market is trying to pick itself back up, and perhaps continue the overall consolidation that we have seen for the last couple of days. That being said, it is also worth noting that the candlestick was a hammer, and that could send this market looking to the 50 Day EMA above. That indicator currently sits at the 4450 handle, which is an area that a lot of traders have been paying close attention to, and that should be an area where we see sellers again.

The market breaking down below the bottom of the hammer for the session on Monday could open up fresh selling, perhaps reaching the 4300 level, followed by the 4150 level. The market continues to struggle with the idea of inflation, and what the Federal Reserve will have to do to fight it. The interest rates are going higher, so now the question is whether or not the interest rates scream higher, or if they simply gradually go higher. The quicker the rate of change, the more likely it is to cause problems for the stock market overall.

The S&P 500 has been running on liquidity for 14 years and does not necessarily have anything to do with the real economy. Because of this, the only thing that matters will be what happens with the Federal Reserve. The markets continue to have the occasional bullish day where people start to think that the Federal Reserve will not raise interest rates aggressively, but with so many the Federal Reserve speakers this week is going to be very noisy, and therefore it is very likely that we will continue to see this market get whipped around.

If a recession does, rather soon, that will continue to put negativity in this market, and thereby cause major issues. It would make a certain amount of sense to retest the bottom, so I do think that is ultimately what happens. However, if we were to take out the 4500 level on a move higher, then it is possible that we could see this market look to reach the 4600 level, and perhaps even turn the whole thing around. That does not seem the most likely of outcomes right now though.

The candlestick during the trading session suggests that there are plenty of buyers in general, and it only makes sense that we go higher.

Gold markets initially pulled back during the trading session on Thursday but then turned around to show signs of life again. This confirms that the $1970 level has a bit of “market memory” attached to it. This is an area that previously had been resistant, and now should be supported on pullbacks. Because of this, the market looks as if it is going to continue the overall uptrend, and therefore it is likely to eventually reach the $2000 level.

The market had been sideways for a couple of weeks, suggesting that we are just now getting inertia back into the market, and therefore it is likely that we will start to pick up more buying pressure as we move forward. Gold markets are especially sensitive to inflationary pressures, which of course are quite strong at the moment. The candlestick during the trading session suggests that there are plenty of buyers in general, and therefore I think it only makes sense that we go higher.

Speaking of the $2000 level, we have sliced through it rather easily the last time we got to that point, so I do not think it will be a huge barrier to overcome. Sure, there will be a bit of psychology attached to that level, but that should be something that we overcome rather quickly. At that point, I would anticipate a move to the $2050 level, and possibly even the recent highs.

If we were to pull back from this area, then the $1950 level could come into the picture. After that, then we would be looking at the 50 Day EMA, which of course is rising. Ultimately, the market will find plenty of buyers all the way down to at least the $1900 level, perhaps even the $1880 level. That being said, if we were to turn around a break down below the $1880 level, then the market would fall apart, perhaps reaching the 200 Day EMA, which currently sits at the $1850 region.

Keep in mind that gold is very volatile, but we are clearly in an uptrend, and there is no reason whatsoever to fight it. Because of this, simply looking for value is going to be the best way forward, just as it has been for quite some time. As far as I can tell, gold has already proven itself.

If we were to break down below the $1900 level on a daily close, I will switch to bearish.

The gold markets have pulled back during the trading session on Thursday to reach the $1923 level. At that point, the buyers came back into the picture and started to push this market to the upside. The $1950 level attracts a certain amount of attention; therefore, I think breaking above there solidly will allow this market to go towards the $1970 level, an area that has seen plenty of resistance.

The candlestick does suggest that perhaps we will continue to push higher, but short-term pullbacks may cause the occasional noisy bit of trading. However, the jobs number coming out on Friday will have a major influence on what happens next, so you should pay attention to how the markets close on Friday. That could give us an idea as to where we are going long term, and therefore it will be interesting to see how this all plays out.

The $1900 level underneath has been very supportive recently, and now it looks as if we had formed a small “double bottom” in that general vicinity. If we break down below there, it could be very catastrophic for gold, perhaps sending gold down to the $1850 level.

On the upside, if we were to break above the $1970 level, then it is likely that we go looking towards the $2000 level next, maybe even the $2050 level, an area that has been visited recently. Gold is continuing to move in negative proportion to the bond markets and yields as per usual. Furthermore, with the jobs number coming out on Friday it will have a major influence on what happens with the US dollar, which by extension will have a lot to do with what happens in the gold market.

As things stand right now, we are simply in a consolidation area between $1900 and $1970. We are getting closer to the top than the bottom, so one would expect the occasional short-term pullback but do not necessarily think this is going to be the beginning of something big one way or the other. However, it is worth noting that the jobs number can cause major volatility, and therefore I will be looking for short-term “buy on the dip” type of opportunities after the announcement is released and digested. That being said, if we were to break down below the $1900 level on a daily close, I will switch to bearish.