The past week has seen strength in stocks sufficient for the S&P 500 to print new all-time highs. The Nasdaq 100’s rally has continued and is within touching distance of new all-time highs as well. The other sectors have seen mixed trading. The long-term trend is up for stocks and interest rate futures, and mixed for the dollar and commodities.
The Dax broke through resistance formed at the April highs and from the trend line that has been in place since April 2015. The breakout completed a change of long-term trend and price continued higher following the breakout. The move has been confirmed by a decisive break of the 60 level on the RSI, which puts the Dax back into the bull range.
The Dax was not the only stock index displaying strength. The S&P 500 also reached new highs but has had little in the way of follow through and is trading in a very tight range. Volatility remains very low in the S&P 500, and this will not likely remain the case for much longer. Volume remains low.
The Nasdaq 100 also reached new highs for the current move and is now very close to reaching a new all-time high. The long-term trend is now up for three of the four stock indexes that we trade at LS Trader and remains in a long-term downtrend only in the Nikkei.
The energy markets have continued their recovery from the sell-off that lasted from early June through to the start of this month. The long-term trend is still up for all markets in the sector with the exception of RBOB gasoline, which is the weakest market in the sector by quite some distance.
The grains markets, most of which have been in deep bear markets in recent times are showing signs of a potential bottom. For now, the long-term trend is down across the sector but there is a possibility that some of the short-term reversal patterns that were printed this week will be completed with upside confirmation over the next week or so.
The metals markets have again seen mixed trading. Both Gold and Silver continue to consolidate at not that far below their recent highs. Silver remains the strongest and is narrowly holding on to its uptrend. Palladium, which has been the strongest of the sector in recent weeks reached its highest level since June last year on Friday but a sharp reversal followed the next day to take the market back to test key support. Last week’s low needs to hold to keep the trend intact or we could see further selling. The long-term trend remains up and will likely do so for a considerable time yet.
The dollar index continues to consolidate and trade mostly sideways as it has done for months. The index has in fact been in a consolidation since March 2015 and. This is one sector where breakouts are well overdue, as with the exception of moves seen in GBP/USD and USD/JPY, there has been little in the way of trending conditions in these markets. Once the dollar index does breakout from its range we should see some very large moves.
Interest rate futures
Interest rate futures continue to consolidate in what is quite a narrow range for these markets. The consolidation has gone on for about month. Such conditions rarely last for long, so we can expect a breakout from this range in the not too distant future. The long-term trend remains up for all markets in the sector with the exception of the 3 month Eurodollar.