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Trader Dan Norcini gives his outlook on the commodities sector

Goldseek Radio, Released on 12/7/17

Highlights:

  • With the holidays just around the corner, Dan Norcini, a.k.a., Trader Dan returns with his outlook on the commodities sector.
  • He follows the money flows to decipher investor sentiment, such as the Carry-trade that involves the USD/Yen.
  • When the index is weak, sentiment is viewed as risk-on, favoring gold and silver; when the USD/Yen index is strong, the risk-off trade favors US equities.
  • The accompanying chart indicates that investors turned to gold in 2016 while avoiding US shares, as the USD/JPY ratio declined.
  • The theme reversed in 2017 as the USD/JPY firmed (figure 1.1).
  • The host notes that the relationship breaks down out of sample, such as the 2008 credit crisis (figure 1.2.).
  • Alternatively, the 50 period MA in the weekly chart or 200 period MA in the daily chart on S&P yields a nearly perfect relationship out of sample (figure 1.3.).
  • In addition, the Commitment of Traders report (COT) offers clues by revealing the positions of the big players.
  • Our guest outlines specific indicators for the silver market, including the notable correlation with the CRB index.

Dan Norcini is a professional off-the-floor commodities trader bringing more than 20 years’ experience in the markets to provide a trader’s insight and commentary on the day’s price action. His editorial contributions and supporting technical analysis charts cover a broad range of tradable entities including the precious metals and foreign exchange markets as well as the broader commodity world. He publishes his views on the markets in a detailed, fee-based service at Traderdan.net.

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