The past week has seen new highs for the current move for US stocks and the dollar, but both sectors have been unable to hold their gains and press higher. The long-term trend remains up for US stocks, up for the dollar, down for interest rates and down for most commodities.
The S&P 500 reached its highest level since the first week of February and has consolidated above the top of the triangle. The long-term trend remains up, with the RSI bullish. If prices can continue to hold above the triangle, then the focus remains on higher prices and a rally back towards all-time highs. Prices remain at a critical juncture.
The Nasdaq 100 made new all-time highs again this week and remains bullish and above support. The Dax and the Nikkei remain in long-term downtrends, but the Nikkei is within range of an upside breakout and a change of long-term trend to up. The Dax is the weakest of the four stock indexes we trade at LS Trader.
The majority of commodity markets remain in a long-term downtrend with only a few exceptions. The CRB Commodity Index fell this week for the eighth consecutive week, which is an indication of the current bearishness. Metals and grains have both seen continued weakness in recent weeks.
The metals markets experienced something of a bloodbath this week before recovering some of the losses on Friday. The long-term trend remains down across the sector. Sentiment remains extremely negative and the end of week corrective rally that began from Thursday’s low may continue this week.
Except for Rough Rice, the grains markets have been heavily hit over the past couple of months and remain in extended downtrends. This week has seen a corrective bounce, but the markets remain below resistance and could turn down again this week. The only things that support the bull side are that sentiment remains extremely negative, and there is bullish momentum divergence on a couple of the markets.
The Dollar Index rallied to its highest level in a year this week before reversing sharply. The long-term trend continues to favour the dollar against all the majors, and dollar weakness at present is a correction in a dollar bull market.
Sentiment is also extremely negative for some of the major currencies against the dollar, which is a leading indicator for a corrective rally, which has already begun in some of the markets. However, the long-term uptrend for the dollar remains in effect, and we’re a long way from a change of trend to down.
Interest rate futures
Interest rate futures continue to be unable to break critical levels to the upside and remain in a long-term downtrend. The commitments of traders report (COT) still shows huge net long positions for commercials, but the weight of the long-term downtrend remains in effect.