The past week was a shortened trading week due to the Thanksgiving Holiday in the US. The long-term trends remain as before across the market sectors. Commodities, in particular, have been bearish.
The S&P 500 exceeded the highs of the previous week but fell short of testing the all-time highs posted earlier this year. The RSI tested the 60 resistance level on the RSI multiple times but has so far been unable to break through. As before, a decisive move through 60 on the RSI would indicate a likely test of the recent all-time highs.
The Nasdaq 100 is in a very similar position to the S&P 500, within touching distance of its recent highs. Here too the RSI continues to trade around the 60 level but the needed decisive break through this range has yet to materialise.
The Dax finished higher this week having reached its highest level since early August. The Dax, however, remains in a long-term downtrend and considerably lower than its US counterparts in relation to its all-time highs. The same is true for the Nikkei.
Gold and Silver both fell to new lows for the year, and the long-term trend for the metals sector remains bearish. Gold’s low print was its lowest since early 2010, and Silver dropped to its lowest level in over six years. Copper’s low for the week was its lowest print in six and a half years. Palladium, however, managed to find support just above its recent lows, but still ended the week lower. Each of these metals still has the potential to move lower. Ideally, we’d like to see Palladium and Silver decisively break their respective support levels to assist with the other metals moving lower still.
The dollar index finished the week higher, once again rallying to its highest level since April and remains on course for a test of 101.43. The long-term trend remains up, and the RSI is in the bull range. However, the price action is not totally convincing as we have a series of small real bodies on the daily charts, and several have upper and lower shadows, which indicate some indecision in the near-term. The chart pattern is also that of a rising wedge.
The Euro also fell to its lowest level since April and remains on target for the March low at 1.0503. The British Pound, which is normally highly correlated with the Euro, has yet to break to the downside. A test of support looks very likely this week, and there is potential for a decent move lower over the coming weeks.
The biggest move in the currency markets at present is USD/CHF, which this week moved to a multi-year high. There is little in the way of overhead resistance to prevent this market from rallying another few hundred pips higher.
Interest rate futures
The long bond traded slightly higher this week, but price action is far from convincing. Shadows are evident above the daily candles, which indicates that the sellers are taking control near the top of the daily range. The long-term trend remains down, and the RSI is still in the bear range. Unless we see a move above 60 on the RSI, we can expect this market to turn over once again.