Watchlist Update: Metals and Cryptos

1. Crude Oil, close $102.67

Not metal, but finally a commodity, the Crude Oil is bullish in the mid-term, without a doubt. It is one of the engines that sustains the current inflation and it should be for a few more months until it subsides. Little did it help that the US released its inventories, the issue here is supply and demand: the necessary global economic recovery is based on oil.

Technically, its daily chart looks good: it has just breakouts one of those key descending triangles that make prices succumb, which in this case would have taken it to its strong level 95 that it has been supporting since February. Need a retest of this breakout to then rise and find rejections at level $115, its 12-year resistance, which was momentarily surpassed in March. Crude Oil is another instrument that I find interesting, just for swing trading: the levels are clear.

2. Gold, close $1,853.10

In my opinion, gold is now being one of the stock market's disappointments. With the boom in commodities due to inflation, it had all of 2021 favorable to rise widely above its 2000 level but it couldn't, it pullbacks and just oscillated in a narrow range 1700-1900, without definition. I think it has lost interest from investors and even more so from retailers who far prefer "virtual gold", the cryptocurrencies. I perceive that gold has remained an asset for past generations, for the "baby boomers".

But be careful with it: the recent clear correlation between the stock market and the cryptos (these are no longer a safe haven as expected) can give gold a new rebirth. Too bad it will now have to face a heavyweight, the very strong "king" dollar, and as if that were not enough, hikes in the i-rate by the Fed. Therefore, I prefer to wait for a clearer picture with gold.

Technically, it now relies on its powerful uptrendline that has been supporting its price since 2018. There is nothing stronger for the mid-long term. I will wait for his arrival at that level and his price action there to decide.

3. Silver, close $21.77

Like with gold, I was expecting a little more from silver in 2021, as both are traditional defenses against inflation. It didn't explode and keeps hovering in the $22-28 range. It's again touching its 2-year support at $22. Losing it would take it to $21.2, its 5-year support. The latest shrinking candlesticks on the weekly chart could indicate a bounce in sight, which should be confirmed by rejection, and then confirmation candles at that key level. An interesting option for the short-term, not for the mid-term: I'm bearish here.

4. Copper, close $4.19

If there is a commodity that allows us to measure the production and growth of the economy, this is the "doctor Copper". This doctor really measures your health because he predicts changes in the global economy like no other.

It exploded upwards from the post-COVID global reactivation until May 2020 and then fluctuated for several months until the recent fall in its price since March, which reflects a drop in its demand and therefore the current weakness of the world economy. Some analysts attribute its drop to the global supply chain crisis, which may be affecting it, like the rest of commodities.

The interesting technical thing is that it is reaching its 52-week support at $4.10, but in my view, it could break that support to the downside.

5. Bitcoin, close $30,505.00

The present bearish market revealed an important detail of Bitcoin, and in general of all cryptocurrencies. Recently considered by some "crypto-fan" analysts as the new safe haven similar to gold or bonds for moments of crisis in the stock markets, it seems that, given its strong correlation with the stock markets this year, it is NOT at all.

His technical prospects don't look good after failing to break his recent bullish flag, in purple. Finally, it was only a pause in its bearish structure, which makes his early arrival at the psychological 30k level inevitable, where he will not only have to fight against his natural support from the end of 2020 but also against a two probable head and shoulders patterns (both in red), with volume decrease on the right shoulder, which are the most reliable. The way its price responds at the 30k level will be key for the rest of the year.

6. Ethereum, close  $2,248.00

Studying its behavior, I would say that Ethereum is the most conservative version of cryptocurrencies. Kind of like the relatively calm SP500 versus the volatile Nasdaq. Last year, this crypto rallied, based on the EP-1559 coin burning protocol that converts it into a decreasing supply asset. And with heavy use in the blockchain architecture of digital assets, like the NFT. All these reasons make it my favorite crypto, above bitcoin.

Technically, today its price is breaking down a critical bullish flag that needs to be overcome if it does not want to fall to the 1900 level, its 1-year support. Good asset but I'd rather stay out of Ethereum until it gets better defined.

Good trading,

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