The S&P continued to rally higher, slightly exceeding the 61.8% retracement of the prior decline until Thursday before turning lower. Friday gapped lower and closed lower again. It is possible that will be the end of the corrective rally and that prices may resume the downtrend.
The Nasdaq 100 had been stronger still, testing the 78.6% retracement of the prior decline. As we have mentioned several times over the years, when the 78.6% retracement level is exceeded, the market will often go on to at least test the prior high. However, the current global backdrop and the price action seen on Thursday and Friday continue to keep that view as a low probability in this case.
Commodities continue to consolidate and digest the recent moves. The energy markets are trying to scrape themselves off the bottom but remain in long-term downtrends, as they will for the foreseeable future.
Metals have seen continued weakness. Gold has traded lower but for now, is holding above support.
The Dollar has seen continued weakness this past week, and we remain flat all currencies. A few majors are within range of breakouts.
Interest rate futures
From last week: “Interest rate futures continue to trade in the vicinity of the neckline and could yet break to new highs. The trend remains up across the sector.”
Interest rate futures have failed to move higher and break the neckline, as volatility continues to contract. This is a choppy consolidation that could still resolve either way, with a slight upward bias in the direction of the primary trend.