The term stock market predictions
is a very controversial one, and it does seem to have a negative overtone to many traders, investors, and the general public. We all know you cannot predict the market with 100% certainty, but you can predict the market more times than not if you do it correctly. Keep in mind that the term market prediction
is also known as a market forecast or technical-analysis outlook and is nothing more than an estimated guess of where the price for a specific investment is likely to move in the coming minutes, hours, days, weeks, and even months.
Getting back on topic, this report clearly shows that the US dollar plays a dominant role in the price of other investments. Understanding how to read the US Dollar Index
will make you a better trader all around when trading stocks, ETFs, options, or futures.
S&P 500 Stock Market Predictions – 10 Minute Chart
These charts clearly show the inverse relationship between the stock market and the dollar index. Knowing how to read charts (candlesticks, chart patterns, volume etc.) is not enough to give you a winning edge. You must also understand inter-market analysis as all markets are linked together in some way, and the dollar plays a major role in where stock prices will move next. Review the charts and comments below on how I came up with my stock market prediction and trade idea.
Gold Market Prediction – 10 Minute Charts
Gold is another investment that is directly affected by the price of the dollar. Review charts for more details.
Long Term Stock Market Forecast
The weekly dollar chart is very important to watch as a short term trader and long term investor because trend changes in the dollar mean your open positions will also likely change direction.
Technical analysis has been applied to the dollar chart below. Notice we are able to create a market forecast and predict roughly where price is likely to move and how long it should take to get there. If the dollar can break above the red resistance level then we can expect a rally for four to eight weeks and a price target around the 87-88 level.
If this is the case then stocks and commodities would likely do the inverse price action and move lower -- sharply lower.
Stock Market Predictions and Gold Market Forecast Conclusion
In short, the next weekly candlestick on the dollar chart could be a game changer for those who are long the overall stock market.
I will admit that the current market conditions are not easy to trade because of all the headline news rolling out of Europe each week along with economic data. I feel as though we have been tiptoeing through a minefield for the past 12+ months waiting for extremely negative news or extremely positive news to trigger a wave of buying or selling that will make our collective jaws drop, but it has yet to happen. Remember: Always use stops and don’t get over-committed in a headline-driven market.
Editor's Note: Chris Vermeulen offers more content at his sites, TheGoldAndOilGuy.com and Traders Video Playbook.
No positions in stocks mentioned.
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