27 January 2017 – Crazy Trump Era!

The week was remembered as Dow passed 20000 and Executive orders fired by Trump. The week ended as Dow stayed above 20000 level , Trump gave green light to two pipelines – Keystone and Dakota. Banned 7 Muslim majority countries from entering the USA for 90 days, stopped accepting Syrian refugees indefinitely. How the market will react to his ban order will be known on Monday.

I lost considerably for a week on my both largest positions which I built up during the week. Oil and Gold. Gold hurt more than oil but I am sticking to my positions and have built up positions in Pound sterling as well. So far, the economic outlook for Britain looks nice. Supreme court also made a final decision regarding Article 50 which was in favor of pound. This week BOE will make a decision on the rate. I am optimistic about rate hike recalling the fact that inflation has risen recently. I will hold my positions on the pound and might add if BOE acts as I predict.

The reason to hold on to my gold position is I believe after a long rally for weeks, gold is contracting and will rebound later regarding uncertainty in the USA and Trump policies. I don’t see any strong reason for gold to go lower. Market participants are more uncertain about the market move than ever before, thus, as I wrote before, gold can be considered a safe bet.

OPEC seems to keep its promises, already seeing cuts and reduction in production. I believe market players are more optimistic about the future of oil than ever since oil bottomed from 50$ levels to 27$ and all the way to current levels. Participants are mostly long in oil futures than ever before. It is the fact that golden periods of oil is gone where the price was at 100$ ( US shale will not let us see that price ) I believe there might be a chance to see oil to rise to 60$ within the next 4- 6 months. But I think I made a mistake of getting a large position like this in oil when upside move is too little. I will reduce my positions in coming weeks.

 

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