Weekly Update – 10 November 2019 – LS Trader

Stocks

The stock markets are at potentially a critical juncture. New all-time highs were printed on Friday, completing the break of the neckline of the massive head and shoulders continuation pattern, which now has price projections over 3600.

At the same time, there is a potential bearish ending diagonal evident in multiple timeframes, which, if completed, can lead to a sharp and swift reversal lower.

Sentiment is moving towards a bullish extreme in stocks, so there are mixed signals. The long-term trend remains up, and the RSI is in the bull range, and therefore, the weight of the evidence is towards higher prices until we see evidence to the contrary.

Commodities

The commodities markets remain mixed. Weakness has been seen in the metals markets, but for now, only Copper is in a long-term downtrend.

Currencies

It’s been a strong week for the dollar, with the Dollar Index moving higher, and the dollar advancing against the majors. The long-term trends remain mixed.

Interest rate futures

Interest rate futures broke support but remain in long-term uptrends for now. A change of trend to down is coming into range, but considerable further weakness will be required to complete a change of trend. The RSI is testing bull market support, which is just about holding.

The inverse relationship between stocks and bonds will be interesting to follow over the coming week. If stocks continue to rally, then bonds will likely see further weakness. Conversely, a turn higher in bonds (weakness in stocks) could also be seen. This position is likely to be resolved one way or the other during the week ahead.

Weekly Update – 3 November 2019 – LS Trader

Stocks

From last week: “There is a massive inverted head and shoulders continuation pattern forming on the S&P 500, which if completed, has extremely bullish implications, with price projections over 3600. It’s possible that we could see new all-time highs in both US indexes this week.” Both markets rallied to new all-time highs this week with potential to move considerably higher still.

The Dax and the Nikkei also both rallied to new highs for the current move again this week.

Commodities

Palladium printed new all-time highs once again, remaining by far the strongest metal and commodity. Gold and Silver ended the week higher but continue to consolidate.

The energy markets remain rangebound despite a bullish day on Friday. The long-term trend remains down for the sector, except for Natural Gas.

Currencies

The dollar has seen some weakness this week against the majors. The Dollar Index declined and will likely test short-term support this week. The New Zealand dollar may complete a head and shoulders bottom this week.

The British Pound moved higher throughout the week and may test the 1.3037 high printed on the 21st October this week. The Pound has the potential to move much higher over the coming months if Brexit gets resolved. Commercials remain net long.

The dollar did breakout against the Yen this week, completing a change of long-term trend, but reversed sharply, narrowly holding support.

Interest rate futures

Interest rate futures held support and ended the week higher. The long-term trend remains up for interest rate futures.

Weekly Update – 27 October 2019 – LS Trader

Stocks

From last week: “However, the S&P 500 and Nasdaq 100 have yet to breakout and remain below resistance. Breakouts are within range for both.” The S&P 500 remains just a fraction below key resistance in price and RSI. The RSI is at the 60 level on the daily and weekly charts.

There is a massive inverted head and shoulders continuation pattern forming on the S&P 500, which if completed, has extremely bullish implications, with price projections over 3600. It’s possible that we could see new all-time highs in both US indexes this week.

The Dax and the Nikkei have both rallied to new highs for the current move.

Commodities

The metals had a decent week overall. Palladium printed new all-time highs once again. Both Gold and Silver have shown renewed signs of strength this week, but both had ugly one-day candles on Friday.

Currencies

The dollar declined to new lows for the current move on Monday but then reversed and advanced for the rest of the week. The long-term trend continues to favour the Dollar Index. The dollar is also in an uptrend against all of the majors except the British Pound, Japanese Yen and the Canadian dollar. We may see the dollar breakout against the Yen this week, completing a change of long-term trend.

Interest rate futures

Interest rate futures continue to decline. For now, the long-term trend remains up, but prices are not back to the lower end of the trading range with a change of trend to down potentially coming into range in the coming weeks if weakness persists.

Weekly Update – 20 October 2019 – LS Trader

Stocks

From last week: “However, a change of long-term trend to up and a breakout to new highs is within range for the Dax.” The Dax completed the expected breakout and change of trend. All four stock indices that we trade at LS Trader are now in long-term uptrends. However, the S&P 500 and Nasdaq 100 have yet to breakout and remain below resistance. Breakouts are within range for both.

It is unusual in recent times for the US markets to lag the Dax and Nikkei, but that is what we currently see.

Commodities

Palladium remains the strongest of the metals and the entire commodity space. New all-time highs were printed once again this week.

Signs of life continue to appear in the grains sector. Oats rallied to its highest level in 4 months. Soybean Oil completed a breakout to reach its highest level since February. Wheat reached its highest level since June. Soybeans turned lower from resistance but is within range of a breakout this week.

Currencies

From last week: “The big move came from the British Pound. In recent weeks we have written about the huge net long position on the COT report of commercial traders. This week the Pound rallied 2.47%, with nearly all of that gain coming on Thursday and Friday.” The Pound extended gains this week with an additional 2.75% rally and completed a change of long-term trend to up in the process. The Pound has now rallied more than 800 pips in the last seven trading days to reach its highest level since May.

Interest rate futures

Interest rate futures were lower again this week but not by much. The RSI is bouncing along the 40 bull market support level on the RSI, and the long-term trend remains up.

Weekly Update – 13 October 2019 – LS Trader

Stocks

Stocks had a mixed week but ended the week higher. The long-term trend remains up with new all-time highs within range.

The Nikkei 225 completed a trend change to up this week, leaving the Dax as the only one of the four indices we trade in a long-term downtrend. However, a change of long-term trend to up and a breakout to new highs is within range for the Dax.

Commodities

Palladium rallied to hit new all-time highs again this week. Palladium, along with Gold and Silver remain in long-term uptrends. Copper, the weakest of the four, is still in a long-term downtrend.

Currencies

The Dollar has seen weakness this week. The Dollar Index broke support, and the Euro rallied above resistance.

The big move came from the British Pound. In recent weeks we have written about the huge net long position on the COT report of commercial traders. This week the Pound rallied 2.47%, with nearly all of that gain coming on Thursday and Friday.

Interest rate futures

Interest rate futures were unable to continue the rally from the prior week as resistance held firm. Four out of five days this week showed heavy selling. This has taken the RSI back to testing bull market support at the 40 level. The long-term trend remains up, but further short-term weakness may be seen and possibly a test of the September lows.

Weekly Update – 6 October 2019 – LS Trader

Stocks

The S&P 500 ended the week lower for the third straight week. However, the lows were sharply rejected, and a huge buying tail is evident on the weekly charts. The long-term trend remains up, with new highs within range. Similar price action is evident on the Nasdaq 100 and Nikkei 225, with the Dax being the weakest of the four indices.

Commodities

Gold dropped below the key level last week, completing a potential head and shoulders top, but reversed sharply, closing back above the neckline. A further rally above the right shoulder would give a failed pattern and suggest new highs may follow. The long-term trend remains up.

Currencies

From last week: “There are some possible bullish factors for the Euro, which may lead to a bounce in addition to sentiment, and these are momentum divergence between price and RSI, and heightened volatility.” The Euro dropped to new lows on Tuesday but then put in a sharp rally through the rest of the week. The Dollar Index made the inverse move. However, the long-term trend continues to favour the dollar.

Interest rate futures

From last week: “The RSI is now back to testing the 60 level having held at bull market support at the 40 level at the September the 13th lows. A decisive move above 60 on the RSI would suggest further strength towards recent highs.”

Interest rate futures saw the RSI exceed the 60 level and price rally to test the recent highs as expected. Friday saw a spinning top indecision candle print on the 5-year note following a test almost to the tick of the recent high. A successful breakout could be seen this week.

Weekly Update – 29 September 2019 – LS Trader

Stocks

Stocks declined this week for the second consecutive week. It’s interesting to note that resistance held in price and at the 60 level on the RSI, which keeps the RSI in the bear range even though the long-term price trend is up.

Commodities

Gold tested support on Friday and printed a bullish hammer pattern. The long-term trend remains up, but the support zone around 1488 seems key to the short-term price action.

Palladium was, once again, the strongest of the metals, as it rallied to new all-time highs, and made all all-time high close.

The energy markets remain in the middle of the range, with the long-term trend down for all markets except for Natural Gas.

Currencies

It’s been a bullish week for the Dollar, as the Dollar Index made a new high close for the current move. Naturally, this coincided with the Euro making a new low. Sentiment remains bullish for the Dollar and bearish for the Euro. There are some possible bullish factors for the Euro, which may lead to a bounce in addition to sentiment, and these are momentum divergence between price and RSI, and heightened volatility.

Interest rate futures

Interest rate futures rallied for a second straight week, with the long-term trend still up. A test of the recent highs cannot be ruled out in the coming weeks.

The RSI is now back to testing the 60 level having held at bull market support at the 40 level at the September the 13th lows. A decisive move above 60 on the RSI would suggest further strength towards recent highs.

Weekly Update – 22 September 2019 – LS Trader

Stocks 

Stocks had a mixed week after failing to take out the prior week’s highs and rally to new all-time highs. The long-term trend for US stocks remains up, and a breakout to new all-time highs is likely in the coming weeks.

The Nikkei and the Dax, currently still in long-term downtrends, are within range of upside breakouts and a change of trend to up.

Commodities

The energy sector saw massive moves this week after gapping sharply higher on Monday on geopolitical events. The long-term trend for energies was and still is down, except for Natural Gas. However, the size of last week’s moves has taken the markets to within range of a change of trend to up.

Palladium was, once again, the strongest of the metals, as it rallied to new all-time highs.

Currencies

The Dollar had a better week as it rallied against most of the majors, keeping the long-term Dollar bull trend intact. The Euro had rallied against the Dollar sufficiently to test resistance, but resistance held, and the market turned lower. 

Interest rate futures

Interest rate futures put in a robust five-day rally this week to correct some of the recent declines. The long-term trend remains up for the sector, and new highs cannot be ruled out. It will take significant further decline for a change of trend to down to come within range, and that prospect looks to be months away at present.

Weekly Update – 15 September 2019 – LS Trader

Stocks

Stocks rolled to the December contract during another bullish week. New all-time highs could be seen this week. The S&P 500 came close to an all-time high on Friday but printed a bearish shooting star pattern as resistance held firm. This has the market at a critical resistance level. The RSI has also closed right on the 60 level, so price action next week could be decisive. Price action in the Nasdaq 100 was very similar. The long-term trend remains up for US stocks.

The Dax and Nikkei are both within range of upside breakouts and changes of long-term trend to up.

Commodities

The metals markets saw mixed trading. Silver got crushed, and Gold also declined, with both markets breaking support and bringing an end to the uptrend for now. Palladium rallied to print new all-time highs. Copper continued its recovery rally, making its highest print since July.

Currencies

We’ve written in recent weeks about the bullish commercial position in the British Pound and the importance of the $1.20 level. The $1.20 level did provide support, and a strong rally has followed. The Pound is now at its highest level since July, and commercials remain near a record net long position.

Interest rate futures

Interest rate futures saw a second week of heavy selling with support being broken. The uptrend is over, at least for now. Weakness has been so extreme in the past two weeks that the RSI has broken the 40 level and is now in the bear range. Considerable further weakness will be required for a long-term trend change to down, and the trend remains up.

Weekly Update – 8 September 2019 – LS Trader

Stocks

Stocks had another bullish week. The long-term uptrend remains up for US stocks, and we could see new all-time highs in both the Nasdaq 100 and the S&P 500 this week.

This week sees both stock indices and currencies roll to the December contract.

 

Commodities

Silver rallied to a new high for the current move but then put in a sharp reversal, printing a shooting star on the weekly chart. The trend remains up, and the market is above support. The chart structure looks incomplete, so new highs are expected once this correction ends. Gold has also seen weakness on Thursday and Friday, and also remains above support.

 

Currencies

From last week: “The Pound ended the week lower by 0.99%. There will likely be further Brexit shenanigans this week. The long-term trend remains down, but commercials remain very close to an all-time net long position. Sentiment remains negative, with only 17% reporting as bullish. $1.20 remains a crucial level.” The Pound dipped below the $1.20 level but then reversed sharply, bringing the downtrend to an end for now.

The dollar has had a mixed week, ending lower against most of the majors.

 

Interest rate futures

The long-term trend remains up for interest rate futures, but the sector has seen some weakness this week. However, the markets all remain above support, and Friday saw a bullish hammer pattern printed, indicting that the lows are being rejected.