Weekly Update – 18 August 2019 – LS Trader

Stocks

The Dax completed a change of long-term trend to down, but so far without follow-through. The Dax joins the Nikkei in a long-term downtrend, but neither index has made any progress to the downside since the breakout.

The S&P 500 and Nasdaq 100 both continue to trade in volatile fashion but remain in long-term uptrends.

Commodities

Gold reached its highest level since May 2013. Silver reached its highest level in 14 months. Both remain in long-term uptrends. Copper is the only metal currently in a long-term downtrend. Copper retraced this week to test the prior breakout level, which is now acting as resistance. The RSI remains in the bear range.

The energy markets continue to trade in a volatile fashion. Brent Crude, Natural Gas and Heating Oil are all in long-term downtrends. The latter rallied above short-term resistance this week.

Currencies

The British Pound has held support. The trend remains down, but new strength suggests resistance may be tested soon. Commercials remain very near an all-time net long position.

The long-term trends continue to favour the dollar overall. The Dollar Index itself has continued its receiver since support held.

Interest rate futures

The 30-year T-Bond made a new high print since October 2016 as interest rate futures continue to rally. Commercials are back to a net long position.

Interest rate futures remain in long-term uptrends across the board.

Weekly Update – 11 August 2019 – LS Trader

Stocks

Stocks saw considerable weakness during the week, followed by a strong recovery to retrace most of the week’s declines. This has left a strong hammer-like pattern on the weekly chart. It is not a hammer because the trend is wrong. There was not enough downtrend for it to be a reversal pattern, and, in terms of strict definition, the lower shadow was too long. However, the long-term trend remains up for the Nasdaq 100 and the S&P 500.

 

The trend is also still up for the Dax, but a change of trend to down is within range and could be completed in the coming weeks if we see additional weakness. The weakest of the stock indices is still the Nikkei, which never completed a change of trend to up when the other indices did. The Nikkei, therefore, remains in a downtrend.

 

Commodities

Gold advanced another 3.82% to reach its highest level since 2013. Silver also rallied and crossed above the 1700 level for the first time in 14 months. Except for Copper, the metals remain in strong uptrends.

 

Currencies

The British Pound made a new low print since January 2017, narrowly holding to the 1.20 level. The trend is down and may continue further, but sentiment is near a bearish extreme, with only 12% bulls, and, more importantly, record commercial buying. This week’s COT data shows that commercials now have their biggest net long position in history. Commercials are nearly always right at extremes, but often early. When this market turns, the move to the upside could be explosive.

 

Interest rate futures

Interest rate futures exploded higher again this week. The 30-year T-Bond made its highest print in almost three years, as the long-term uptrend remains intact. UK Long Gilts rallied to a new all-time high.

Weekly Update – 4 August 2019 – LS Trader

This past week saw the expected heightened volatility surrounding the Fed meeting on Wednesday. The Fed cut rates by 25 basis points, but the market was expecting more.

Stocks

Stocks broke lower in volatile fashion this week, breaking short-term support in the process. The long-term trend remains up, but this week’s action has done some technical damage. The RSI on the S&P 500 has closed right on the 40 level, which is bull market support, so next week could be a pivotal week. A decisive move below the 40 level will indicate considerable further weakness and a range shift in the RSI to bearish.

Commodities

The metals sector saw some wild swings this week. Gold, Silver and Palladium all remain in long-term uptrends. Copper, the only one of the four metals that is in a downtrend, broke recent support to fall to its lowest level since January.

Currencies

The British Pound fell to its lowest level since January 2017. The long-term trend is still down. However, there has been some evidence of buying due to the long lower shadow on Thursday’s candle followed by a bullish engulfing candle the next day, so we may see a corrective bounce. Another factor of interest is that commercials, the smart money, registered their third-largest long position in history on the Pound, so the smart money does not perceive Brexit to be bearish.

Interest rate futures

Interest rate futures rallied sharply this week, breaking to the upside. We have written in recent weeks that the long-term uptrend was intact and that price structure was incomplete and that we were expecting new highs in these markets. We got them this week.

Weekly Update – 28 July 2019 – LS Trader

This week sees the FOMC meeting on Tuesday and Wednesday where the Fed is widely expected to cut rates. The question is, how much will they cut by and will it be enough as perceived by the market? Expect volatility around the time of the announcement on Wednesday at 7 pm BST.

Stocks

Both the S&P 500 and the Nasdaq 100 made new all-time highs this week.

The Dax rallied to test the high printed earlier this month but reversed sharply on Thursday with a big down day.

The Nikkei also rested resistance but also failed to breakout. Resistance was also found at the 60 level on the RSI. If both levels can be decisively broken, we could see a rally to the next level of resistance around 2250.

Commodities

Gold continues to trade in volatile fashion but remains in a long-term uptrend and above support.

Silver rallied to its highest level since June last year but is finding resistance at the 200-week MA.

Currencies

The dollar has seen strength return this week, with the Dollar Index rallying higher for six days, making a breakout on the back-adjusted continuous chart to its highest level since March 2013. This move also saw the dollar push the Euro to new lows for the current move. The British Pound also fell to a new low since April 2017.

Interest rate futures

Interest rate futures continue to consolidate in a range not far below recent highs. These markets could see volatile swings this week due to the FOMC meeting. The long-term trend is up for these markets, and considerable weakness will be required before that changes.

The only market in the sector in a current active uptrend is the UK Long Gilt, which this week came close to its all-time high, printed back in August 2016.

Weekly Update – 21 July 2019 – LS Trader

Stocks

Both the Nasdaq 100 and the S&P 500 made new all-time highs this week, but both corrected lower to end the week down.

The RSI has dipped below the 60 level but remains very much in the bull range, and the long-term trend remains up. However, the close below the April high, which should have held firm due to change of polarity, does put a question mark against the current trend.

Commodities

Gold broke out to the upside from the triangle to print its highest price in 6 years. Silver also had a strong week, rallying to its highest level in over a year.

Palladium, which has been the strongest of the metals of late, and the only one to hit new all-time highs this year, had a corrective week and saw prices break below short-term support.

Currencies

The dollar has had a mixed week. The Dollar Index ended the week slightly higher but remains within a trading range. Some of the majors have shown some strength against the dollar, with both the Australian and New Zealand dollars reaching their highest levels since April.

Meanwhile, at the other end of the scale, the British Pound fell to its lowest level since April 2017 before posting a mild recovery. As with the Pound, the Euro remains in a long-term downtrend but is currently in a trading range.

Interest rate futures

The trend for interest rate futures remains up, and some strength has been seen this week. The current technical picture suggests that the rally is not done and that we will see new highs above the highs printed at the start of the month.

Weekly Update – 14 July 2019 – LS Trader

Stocks

Both the S&P 500 and Nasdaq 100 made new all-time highs this week, as well as all-time high weekly closes. The bull market remains intact, and the long-term trend is indisputably up. The RSI remains in the bull range. As expected during this time of year, volume has declined as the rally has persisted, and volatility is waning. If these markets can hold above the breakout levels on a closing basis, that may form a platform for considerable further rally.

Commodities

Palladium made new all-time highs again this week but did come off slightly by Friday’s close. Gold continues to consolidate above support. The energy markets have continued to rally.

Coffee had shown signs that a new bull market may have been starting, but that has stalled. The market has tested support multiple times this week, which so far has held firm.

Currencies

The dollar has seen weakness this week across the board. The long-term trend continues to favour the dollar overall but is weakest and in a downtrend against the Canadian dollar.

The British Pound fell to its lowest level since December during mid-week but has put in a decent bounce since. The trend, for now, remains down.

Interest rate futures

From last week: “Interest rate futures made new highs on Friday but made a key reversal day. Price action on the 10 Year T-Note engulfed the real bodies of the last 11 days, which suggests that further weakness lies ahead and that support will be broken on both the 5 & 10 Year Notes this week.”

Interest rate futures saw the expected weakness this week, and we exited both the 5 & 10 Year T-note long positions for decent profits. Weakness has been seen across the board in the sector, with only the UK Long Gilt in a current long position. Gilts will likely at least test support this week.

Weekly Update – 7 July 2019 – LS Trader

Stocks

From last week: “The S&P 500 is leading the way to the upside but failed to clear the prior week’s high and is grappling with a clear resistance zone. A decisive breakout above this resistance would be bullish.”

This week saw the decisive breakout and a new all-time high weekly close on the S&P 500. The Nasdaq 100 also made a slight new all-time high intraday but closed lower back below prior resistance.

The Dax gapped higher at the start of the week and rallied to its highest level since August last year. Only the Nikkei is currently in a long-term downtrend. All the other stock indices are in a bull market.

Commodities

Gold has seen some wild daily price swings this week but continues to hold above support, and the trend remains up. The trend is also up for Palladium, which made an all-time high weekly close.

Currencies

The Dollar had a strong week, which held off the potential change of trend to down and remains in a long-term uptrend. The British Pound fell to its lowest level since the 1st week of the year. UK Gilt prices are indicating rate cuts on the horizon, which is putting pressure on the Pound.

Interest rate futures

From last week: “However, there has been a bearish divergence between price and RSI, as mentioned last week, as well as volatility contraction, and declining volume. The trend remains up, but weakness towards a test of support looks likely.”

Interest rate futures made new highs on Friday but made a key reversal day. Price action on the 10 Year T-Note engulfed the real bodies of the last 11 days, which suggests that further weakness lies ahead and that support will be broken on both the 5 & 10 Year Notes this week.

Weekly Update – 30 June 2019 – LS Trader

Stocks

Stocks ended the week lower, but the long-term uptrend remains intact for all the stock indices we trade at LS Trader, except for the Nikkei.

The S&P 500 is leading the way to the upside but failed to clear the prior week’s high and is grappling with a clear resistance zone. A decisive breakout above this resistance would be bullish.

The Dax and Nasdaq 100 are both within range of upside breakouts to resume their respective uptrends. The Nikkei remains rangebound.

Commodities

From last week on Gold: “However, the rise has been parabolic this past week, and bullish sentiment is extremely high. It could be that we will see some weakness this week, back towards the 1360 level, before the rally continues.” Gold continued the parabolic rally early this week, before peaking at 1442.9 and reversing sharply back to 1400. Sentiment is a little lower but still elevated. The long-term trend remains up, with the market above support, but further correction could be seen before we see 1442.9 exceeded.

Currencies

From last week: “The Dollar Index broke medium-term support and a trendline that has been in place since September 2018. This may lead to further dollar weakness. “ The Dollar Index ended the week lower but has spent most of the week consolidating the prior week’s declines. We may see some strength for another test of the underside of the trend line before prices move lower. For now, the long-term uptrend remains intact, but critical support could be tested this week.

Interest rate futures

Interest rate futures are consolidating near their recent highs. However, there has been a bearish divergence between price and RSI, as mentioned last week, as well as volatility contraction, and declining volume. The trend remains up, but weakness towards a test of support looks likely.

Weekly Update – 23 June 2019 – LS Trader

From last week: “The current global macro picture is aligned with current market trends, which suggests stocks, Gold and interest rates will continue to move higher. However, the Dollar could breakout to the upside this week, which conflicts with that view.” The macro picture discussed last week continues to play out, and the one part that was not in line, namely the Dollar, appears to have started to fall into line this week.

Stocks

The S&P 500 printed a new all-time high on Friday, but reversed lower, closing below the prior resistance level. Whether we see some additional corrective weakness this week remains to be seen, but the trend is up, and new highs are not characteristics that we see in downtrends.

The Nasdaq 100 lags the S&P 500 but also remains in a long-term uptrend. The Dax is close to a breakout this week above the May high. The Nikkei continues to lag and remains in a long-term downtrend, the only one of the four indices that we trade at LS Trader which is in a downtrend.

Commodities

Gold exploded higher, and the longer-term targets that we mentioned in last week’s update remain the focus. However, the rise has been parabolic this past week, and bullish sentiment is extremely high. It could be that we will see some weakness this week, back towards the 1360 level, before the rally continues.

Currencies

The Dollar began the week with strength but reversed sharply in the middle of the week. The Dollar Index broke medium-term support and a trendline that has been in place since September 2018. This may lead to further dollar weakness. The Dollar is already in a long-term downtrend against the Swiss franc and Japanese Yen.

Interest rate futures

Interest rate futures made new highs for the current move this week, and the long-term trend remains up. However, there is divergence between price and RSI, and there has been some short-term bearish price action.

Weekly Update – 16 June 2019 – LS Trader

The current global macro picture is aligned with current market trends, which suggests stocks, Gold and interest rates will continue to move higher. However, the dollar could breakout to the upside this week, which conflicts with that view. As ever, the markets will go where they are going to go, so we follow along for the ride.

Stocks

Stocks closed the week higher than the prior Friday’s close, but flat to slightly down from Monday’s open, which had gapped higher. The trend remains up for all four stock indices that we trade at LS Trader except for the Nikkei, which remains in a downtrend, trading just below short-term resistance.

Commodities

From last week: “Gold put in a strong rally this week and broke through resistance, and now looks set to test the February high. Gold has been in a sideways range for six years and continues to build what could be a massive head and shoulders bottom. If the market can get above the 1400 level, we could see a rally back towards the all-time high at 1923.7 printed back in 2011.”

Gold rallied further this week, in spite of dollar strength. However, Friday’s candle was ugly, as the market tested and rejected the February high. This may indicate some short-term weakness this week, but the trend remains up, and the market is well above support.

Currencies

The dollar reversed this week, with the Dollar Index finding support from above the prior week’s low. Wednesday and Friday had strong buying days, accompanied by heavy volume, which suggests further strength this week. Several major currencies are set to test critical levels this week, and if dollar strength continues, we could see multiple breakouts and a resumption of dollar strength.

Interest rate futures

Interest rate futures have had a mixed week. The long-term trend remains up across the sector, but there has been some short-term weakness in some markets. The shorter-term futures remain the strongest, and these either tested or made new highs for the current move this week.