Weekly Update – 15 December 2019 – LS Trader

Stocks

From last week “The long-term trend remains up, and it looks likely that we will see new all-time highs this week for US stocks, and possibly new highs for the year for the Nikkei 225 and the Dax.”

US stocks broke out to new all-time highs on Thursday and moved higher on Friday. Both days had well above-average volume. Friday’s doji shows indecision.

The Dax and Nikkei both made new highs for the year. Friday’s candle on the Dax is ugly.

Commodities

Will 2020 be a big year for commodities? It’s starting to look increasingly likely. Many commodities appear to be bottoming, and some are already moving higher and are in uptrends. If the dollar breaks down, which also seems possible over the coming 12 months, commodities will benefit.

Strength is evident in multiple commodity markets, including Coffee, Sugar, Palladium and Brent Crude.

Currencies

From last week “This week sees the UK go to the polls on Wednesday, with Boris Johnson expected to win with somewhere between 14 and 50 seat majority. Such an outcome is expected and is likely priced in. However, a more significant margin of victory would probably be more bullish for the Pound and propel further gains.”

Boris won the election as expected, but won by a bigger than expected margin and the Pound gapped higher on the result. However, some weakness followed, and it could be a case of buying the rumour and sell the fact with further correction possible in the short-term. Longer-term the uptrend looks to be established, and the Pound could move substantially higher over the coming years, especially if the dollar weakens overall.

Interest rate futures

Interest rate futures had weakened sufficiently to test trend-defining support, but buyers returned, so far keeping the long-term uptrend intact. A change of trend to down is still within range, however.

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