This Week's Market Strategy - October 15, 2024 (Tuesday)

Last week's focus was on two items: the FOMC minutes and consumer price index. The FOMC minutes revealed that besides Michelle Bowman, other members were also reluctant about a 0.5% rate cut, and while inflation has slowed, it exceeded expectations. As a result, according to the FED Watch, the 0.25% rate cut has become mainstream for the November FOMC rather than 0.5%. U.S. 10-year yields continued to rise, and the dollar index also increased, so USD/JPY has been bought up to just below 150 yen. It looks like it will rise a bit more.

Since U.S. long-term interest rates are surging, gold has experienced a rapid surge of $70 to $2,684. Gold could potentially see one more year-end rally to around $2,800. Long positions are recommended while waiting for corrections, but don't chase if it exceeds the highs. There is a strong possibility of a pullback from year-end into early next year.

WTI crude experienced volatile swings last week, including a sudden spike to the $78 range due to the possibility of Israeli attacks on Iran's oil facilities, but the OPEC monthly report again revised down the global demand outlook! With China's trade balance at a five-month low, there was a sharp reversal last night.

In summary, USD/JPY is a short-term buy if it corrects to the 147 yen level. Breaking above 151 yen is a take-profit and short strategy. However, if it closes above 152 yen, get out. The downside target is 145 yen, so take profit before that level. For gold, buy at $2,620 short-term. Take profit at $2,800. If below $2,500, cut losses or wait and see. Crude oil is likely to fall once more, so short at $78. Loss-cut above $84.55.