This Week's Market Strategy - July 30, 2024 (Tuesday)

Stock prices fell sharply last week, mainly due to semiconductor stock selling! USD/JPY, which tracks stock prices, plummeted around 6 yen from the mid-157 yen level to below 152 yen. Yen shorts in Chicago IMM futures had ballooned, so it appears the yen was bought back due to unwinding. The question is whether that has ended?

Last week we said 'a sharp drop to around 152-155 yen seems likely and that would be a buy!' and it appears that happened. There's a possibility of another drop depending on tomorrow's BOJ announcement. Tomorrow evening we have the intervention results announcement, and overnight we have the FOMC with a festival-like atmosphere continuing. There might be volatile swings, but we want to hold our USD/JPY longs. However, at 157-158 yen we might consider taking profits once.

U.S. long-term interest rates rose until mid-last week, but in the latter half of the week they have been dropping sharply in a round trip. However, the dollar index seems to be rising rather than declining, regardless of interest rates.

Gold was sold down to $2,350 last week but is recovering sharply afterwards. Last week we wrote 'gold remains bullish long-term, so we're waiting for a correction to around $2,350.' The low was $2,351.9, so the question is whether we managed to pick it up well?

WTI crude oil is facing selling pressure due to the Trump trade, but $75 is strong support. It rose to $78 due to Hezbollah's rocket attack on the Golan Heights. Last week we commented 'There's a possibility of a further drop following the Trump trade trend, but is the downside target around $75-77?'

To summarize: USD/JPY is taking a break and falling back. Buy recommended around 152 yen. Gold buys at $2,350. For short-term positions, cut losses below $2,300, but medium to long-term hold is recommended. Oil is waiting for a drop and long positions are recommended in the $75 range. For short-term positions, cut losses at $72.40.