We want to take this opportunity to wish all our readers a very Happy Christmas. The week ahead will be a shortened trading week due to markets being closed on Christmas Day.
US stocks posted new all-time highs once again, and the long-term trend is very much up. Volatility remains low, but in the trending zone, and there is no momentum divergence. Even volume, which has been low throughout much of the rally, has picked up over the past two weeks. When markets rally on low volume, it means that there is no supply coming into the market, and that is not bearish.
From last week: “Friday’s candle on the Dax is ugly.” The Dax tested the high of Friday’s candle but was unable to move above it and traded sideways to down for the rest of the week. The trend remains up, and new highs are within range. The Nikkei, which is also weaker than the US indices, did post new highs for the move on Monday but traded lower and closed the week down.
There are still signs that the commodity market sector continues to bottom and that 2020 could be a decent year for commodities. While there are still several markets in a long-term downtrend which remain weak, many more are making breakouts or are close to doing so.
Palladium, which has been the strongest commodity of 2019, reversed sharply this week, which included a heavy selling day on Friday.
Following the general election success, the British Pound has continued to move lower, proving it was very much a case of buy the rumour sell the fact. The Pound has now returned to the breakout level from the 4th December. The long-term trend remains up.
Interest rate futures
Interest rate futures are trading sideways just above trend-defining support. A change of long-term trend to down is within range.