Several markets have shown an increase in volatility this week, and we could be entering a more active period in the markets. We saw multiple key levels tested in the markets and a change of trend to up complete for the 30-Year T-Bond. Gold and Silver are also close to a change of trend to up, and that could complete this week. The dollar has also seen some renewed strength and remains in a long-term uptrend. Multiple long dollar breakouts are within range this week.
The S&P 500 ended the week lower by just 0.3% but had been lower before finding support right at the 50-day moving average. The long-term trend remains up.
The Dax made a 2-year high on Monday, just shy of our long-standing target at 12429.5, which is the all-time high for the Dax printed back in April 2015. Price pulled back into Thursday’s low before a minor recovery but ended the week lower. The long-term trend is still up, and price remains above support and considerably above its 50-day MA.
The Nasdaq 100 remains the strongest of the three indexes and printed a new all-time high on Wednesday. In spite of weakness during the latter half of the week, the Nasdaq remains well above support and clearly still in a long-term uptrend. Volatility declined to its lowest level since early October.
The Nikkei remains the weakest of the four stock indexes that we trade at LS Trader and this week made two attempts at breaking the bottom of the rectangle that has been in place since December. Both Thursday and Friday’s candle show long bullish shadows, which show that buyers are coming in at those levels. The long-term remains up, but a close below Friday’s low would suggest further weakness back to the 200-day MA, currently at 18314.
The energy markets had another bullish week, with Crude Oil regaining the 50-day MA and price retracting more than 50% of the decline from the December high. Price also moved back above its 200-day MA and broke the 60 level on the RSI, also for the first time since December. The long-term trend remains up.
Sugar continued its recent decline, and fell to its lowest level since May last year, and possibly still ha further to run to the downside, in spite of some strength seen on Thursday and Friday.
The Soybeans markets all made new lows for the current move. Soybean Oil is the weakest commodity so far this year and is down 9.5% in 2017.
Gold rallied to its highest level since November, before printing a shooting star reversal on Friday as the breakout was rejected. However, Friday’s high takes this market to within range of a change of long-term trend to up. The trend for Gold has been down since November. Silver remains weaker but is also within range of trend-defining resistance.
The Dollar Index moved back above its 50-day MA this week, and the RSI is testing the 60 level on the RSI. If 60 is broken, we can expect further strength towards the March highs, a break of which would be bullish and would suggest that the Index was going to rally further to test the January high.
The dollar has also gained ground against most of the major currencies and has multiple breakouts within range, the closest of which is the Aussie, which price closed below its 200-day MA and just pips away from a breakout and a resumption of the long-term downtrend. The failure of the Aussie to break the November high resulted in a double top and suggests that should the breakout be successful, we may see weakness back to the December low, which is over 350 pips below Friday’s close.
Interest rate futures
Interest rate futures continued their recent strength, and the 30 Year-T-Bond broke briefly above resistance on Friday before the highs were rejected. Price remains between the 50 and 200-day MAs, and the 50 MA may now provide support. The UK Long Gilt remains the strongest in the sector, this week reaching its highest level since October. A change of long-term trend is within range for the remaining markets in the sector.