Weekly Update – 19 May 2019 – LS Trader

Stocks

Stocks had a mixed week after a weak opening on Monday before a recovery during the middle of the week, which still resulted in a down week. The RSI on the daily S&P 500 dropped below the 40 level but only for a day. However, that breach of 40 was enough to have the RSI in a bear range. The long-term trend remains up.

Commodities

From last week: “Silver is the most likely to complete a change of trend to down shortly.” Silver broke support as expected, and completed a change of long-term trend to down, making its lowest print since December. The RSI remains in the bear range, as it has since March.

The grains markets may have bottomed this week as aggressive buying was seen shortly after the open. However, the long-term trend remains down, with Soybeans and Soybean Oil still in current downtrends and below resistance.

Currencies

It’s been a bullish week for the Dollar, which has advanced against most of the majors. The Dollar Index may test the late April high this coming week. The RSI crossed back above the 60 level this week.

The British Pound had a large head and shoulders bottom forming on the daily chart, but that pattern did not complete. Instead, the right shoulder has formed a head and shoulders top, and the neckline was violated. This indicates further weakness towards the January low and a possible change of long-term trend to down in the coming weeks.

The EUR/USD effect, which we have written about many times, stating that January tends to set the high or low for the year, continues to suggest that the Euro peaked at 1.1718 basis the back-adjusted continuous contract, back on January the 10th, and that the Euro will trade below that level (Dollar bullish) for the remainder of 2019.

Interest rate futures

From last week: “Interest rate futures continue to show signs of strength as the long-term uptrend appears to be getting back underway. The March high could be tested in the coming weeks.” Interest rate futures continued to rally this week. The 3 Month Eurodollar, basis the March 2020 contract, rallied to a new high for the current move. The remaining markets in the sector may test their March highs this week. The trend for interest rates, which move inversely to prices, remains down.

Weekly Update – 12 May 2019 – LS Trader

Stocks

From last week: “..the continued collapse in volatility does put a question mark against much further rally.” Both the Nasdaq 100 and the S&P 500 failed to make new highs this week and sold off aggressively. However, the daily chart shows long bull shadows on the daily bars, especially on Thursday and Friday, which suggests that the lows are being rejected and that buyers are stepping back in. Added to that, the RSI found support in the 40-50 range, and the long-term trend remains up.

From last week: “The Nikkei tested resistance and only needs to exceed last week’s high to complete a trend change to up to join the other three stock indices that we trade at LS Trader in long-term uptrends.” The Nikkei opened the week lower and, therefore, never completed the trend change and remains in a long-term downtrend.

Commodities

The metals markets remain in long-term uptrends overall, but price action continues to remain sloppy and without short-term directional bias. Silver is the most likely to complete a change of trend to down shortly.

The energy markets may have made a significant top in late April. Short-term price action suggests lower prices in the coming weeks. However, for now, the long-term trend remains up.

The grains markets remain weak, with most of the sector in extended downtrends. Soybeans printed its lowest price since late 2008; such is the extent of current price weakness. Soybean Oil may test the 25.70 level in the coming week or so, which is the lowest print since 2006.

Currencies

Price action remains mixed in the currency markets but continues to favour the dollar overall. The Aussie made its lowest print since January, and the Kiwi its lowest since October, but the Dollar Index corrected lower.

Interest rate futures

Interest rate futures continue to show signs of strength as the long-term uptrend appears to be getting back underway. The March high could be tested in the coming weeks.

Weekly Update – 5 May 2019 – LS Trader

Monday is a Bank Holiday in the UK, but US markets will be open as usual.

## Stocks
The S&P 500 printed a new all-time high this week but reversed sharply on the same day, before recovering most of those declines on Friday. The trend remains up, and new highs look likely. Similar price action was seen in the Nasdaq 100. The RSI remains in the bull range. However, the continued collapse in volatility does put a question mark against much further rally.

From last week: “The Nikkei tested resistance this past week but stands a good chance of a breakout this week ahead.” The Nikkei tested resistance and only needs to exceed last week’s high to complete a trend change to up to join the other three stock indices that we trade at LS Trader in long-term uptrends.

## Commodities
The energy markets saw further weakness this week but remain in long-term uptrends, except for Natural Gas.

The long-term trend remains up for metals, but they all are showing corrective price action at present with no directional bias.

The grains sector remains weak with all markets except for Oats in long-term downtrends.

## Currencies
The currency markets remain mixed, but with the long-term trend still favouring the Dollar against most of the majors.

The long-term trend for the British Pound remains up, and it’s possible that the recent correction is at an end and that a right shoulder low of a head and shoulders bottom formation has been completed. It is premature to front-run head and shoulders patterns and waiting for a breakout above the neckline is standard procedure. The RSI is testing 60 again having just about held the 40 support level during the last week of April.

## Interest rate futures
Interest rate futures continue to trade in a choppy, sideways mess in the short-term, but remain in long-term uptrends. The only market in the sector within range of a change of long-term trend to down is the UK Long Gilt.

Weekly Update – 28 April 2019 – LS Trader

Stocks

From last week: “This suggests that there is still potentially further to go in this rally.” Stocks rallied again with the Nasdaq 100 reaching new all-time highs. The S&P 500 fell just short of new all-time highs basis the back-adjusted continuous contract but may post new highs this week. The Dax has rallied to its highest level since September last year.

Also from last week: “As before, only the Nikkei remains in a long-term downtrend of the four stock indices we trade at LS Trader and could complete a trend change this week.” The Nikkei tested resistance this past week but stands a good chance of a breakout this week ahead.

Commodities

The energy markets made new highs this week but then reversed sharply, with a big down day on Friday breaking short-term support. That brings an end to the uptrend, at least for the short-term, but the long-term trend remains up. RBOB Gasoline, which was the first to breakout, making its move 1-2 weeks before the other markets in the sector, and therefore being the leader, remains above support with the trend intact.

Currencies

The Dollar Index rallied to new highs for the current move and also advanced against most of the majors, pushing the Euro to a new low for the year. The EUR/USD effect remains intact, with January’s high well above current levels, suggesting that was the high of the year.

Interest rate futures

From last week: “It’s possible that a short-term low may have been printed on Thursday as the RSI bounced off the 40 level, keeping these markets in the bull range. In addition, price action saw a 3-day morning star bullish reversal printed. The trend remains up.” Price action this week suggests that what we wrote last week may be correct and that the uptrend is underway again

Weekly Update – 20 April 2019 – LS Trader

Monday is a Bank Holiday in the UK, but the US markets will be open as usual.

## Stocks
Stock indices hit new highs for the current move. The RSI on a weekly level has cleared the 60 level on both the S&P 500 and the Nasdaq 100 and is testing it on the Dax. This suggests that there is still potentially further to go in this rally. As before, only the Nikkei remains in a long-term downtrend of the four stock indices we trade at LS Trader and could complete a trend change this week.

## Commodities
From last week: “Crude broke through resistance as expected, completing a change of long-term trend to up. Both Brent Crude and Heating Oil are within range of similar tests and may also breakout and complete long-term trend changes.”

Both Brent Crude and Heating Oil made breakouts and completed the trend change to up. Natural Gas, the only energy market in a downtrend, broke to the downside.

Also from last week: “Gold and Silver continue to show weakness. There is a potential head and shoulders top formation in Gold, and a break of the neckline may lead to continued weakness towards 1222, very near to trend-defining support.” Gold fell through the neckline and may now head lower towards 1222, but for now, the long-term trend remains up.

## Currencies
From last week: “Across the sector, there is an environment of collapsing volatility, and very low volatility levels are evident in several majors, which usually precedes a directional move.” The Dollar Index rallied sharply on Thursday to exceed the March peak and move to its highest level of the current move. The Euro remained below support and moved sharply lower on Thursday, moving inversely to the Dollar Index. The Dollar also broke to the upside against the Swiss franc.

## Interest rate futures
From last week: “The long-term trend remains up across the sector, but further short-term weakness looks likely before the trend reverses back to the upside.” It’s possible that a short-term low may have been printed on Thursday as the RSI bounced off the 40 level, keeping these markets in the bull range. In addition, price action saw a 3-day morning star bullish reversal printed. The trend remains up.

Weekly Update – 14 April 2019 – LS Trader

This week will be a shortened trading week as Friday is Good Friday so US and UK markets will be closed.

Stocks

The stock markets continue to rally higher towards the all-time highs printed last year.

The Nikkei 225, which has been the laggard of the four global stock indices that we trade at LS Trader could rally sufficiently to complete a change of long-term trend to up. This would put all four indices in a long-term uptrend and confirm the uptrend.

Commodities

From last week: “The Crude markets are likely to test resistance in the coming days and could also complete a change of trend. Volatility is expanding nicely and is currently in the sweet spot for a trend move.”

Crude broke through resistance as expected, completing a change of long-term trend to up. Both Brent Crude and Heating Oil are within range of similar tests and may also breakout and complete long-term trend changes.

Gold and Silver continue to show weakness. There is a potential head and shoulders top formation in Gold, and a break of the neckline may lead to continued weakness towards 1222, very near to trend-defining support.

Currencies

The dollar has seen some weakness this week but not enough to bring the trend against the Euro to an end. The dollar remains in proximity of breakouts against several of the major currency markets. Across the sector, there is an environment of collapsing volatility, and very low volatility levels are evident in several majors, which usually precedes a directional move.

Interest rate futures

From last week: “This makes last week’s lows in the sector a key support area. For now, the long-term trend remains up.” The key lows from the prior week were broken, bringing the uptrend to an end for now. The long-term trend remains up across the sector, but further short-term weakness looks likely before the trend reverses back to the upside.

Weekly Update – 7 April 2019 – LS Trader

Stocks

The recent rally in stocks continued this week, and the S&P 500 and Nasdaq 100 may rally further to test the all-time highs printed last year.

The Dax rallied sufficiently to complete a change of trend to up, leaving the Nikkei as the only stock index that we trade in a long-term downtrend.

Commodities

RBOB Gasoline is the first market in the energy complex to complete a change of trend reversal and is now back in a long-term uptrend. The Crude markets are likely to test resistance in the coming days and could also complete a change of trend. Volatility is expanding nicely and is currently in the sweet spot for a trend move.

The grains markets remain in a long-term bear market. None of the markets is likely to complete a change of trend soon, and unless something changes and we get a catalyst, it’s expected to be at least a few weeks before that changes.

Currencies

From last week: “Strength looks to be returning to the dollar, at least in the short-term The Dollar Index has retraced most of its decline since the March 7th high and may breakout this week.” The Dollar Index is testing resistance once again, and may breakout to the upside this week.

Also from last week: “Similarly, the Euro, a near perfect inversion of the Dollar Index, may this week break to the downside and new lows for the year.” The Euro did break to new lows for the year as expected, but as yet without follow-through. A decisive upside breakout in the Dollar Index would confirm Euro weakness.

The British Pound does not know which way to turn and is back to almost the middle of the trading range that has been in place since last summer.

Interest rate futures

Interest rate futures have seen continued weakness this past week and tested support on Friday. Support held and buying returned, leaving a demand tail on the daily chart. This makes last week’s lows in the sector a key support area. For now, the long-term trend remains up.

Weekly Update – 31 March 2019 – LS Trader

Stocks

Stocks pulled back and tested support this week but support held, and the uptrend remains intact. Both the S&P 500 and Nasdaq 100 are undergoing volatility compression, so we may see an increase in volatility and a sharp move in the coming week or so.

Commodities

From last week: “Palladium hit a new all-time high but put in a reversal on Friday, giving back all of the gains for the week. The weekly chart indicates a shooting star, which may indicate further weakness this week. The trend is mature, the sentiment is high, and weekly volatility is at its highest ever level.” As expected, Palladium’s rally came to an end this week and did so in dramatic fashion. Wednesday saw the market fall through support, bringing the uptrend and the most profitable trade so far this year for the LS Trader system to an end. Weakness followed on Thursday. Palladium closed the week lower by 11.46%.

Gold and Silver have also seen weakness, but Copper, currently the strongest of the metals, looks set to test resistance in the coming days.

Currencies

Strength looks to be returning to the dollar, at least in the short-term The Dollar Index has retraced most of its decline since the March 7th high and may breakout this week.

Similarly, the Euro, a near perfect inversion of the Dollar Index, may this week break to the downside and new lows for the year. The British Pound, the subject of much Brexit speculation, remains in a broad range between 1.2570 and 1.3470 basis the back-adjusted continuous futures contract as it has since July last year. Sentiment remains low on the Pound, but commercials remain net long, where they have been accumulating Pounds since June 2018.

Interest rate futures

The bull market in interest rate futures remains intact. All five markets that we trade at LS Trader hit new highs for the current move, but there has been some weakness seen on Thursday and Friday. The trend remains up with markets well above support.

Weekly Update – 24 March 2019 – LS Trader

Stocks

The Nasdaq 100 completed a trend reversal breakout to the upside this week and reached a new high for the move on Friday before closing the day lower. The long-term trend is up for the Nasdaq 100, S&P 500 and Dax, but remains down for the Nikkei, which remains the weakest of the four stock indices that we trade at LS Trader.

Commodities

Metals have seen weakness this week with the trend for Copper coming to an end for now with a break of support. Gold and Silver both edged higher. Palladium hit a new all-time high but put in a reversal on Friday, giving back all of the gains for the week. The weekly chart indicates a shooting star, which may indicate further weakness this week. The trend is mature, the sentiment is high, and weekly volatility is at its highest ever level.

Currencies

The dollar has had a mixed week, trading sharply lower and then reversing on Friday, forming a v-bottom on the daily Dollar Index. The long-term trend remains up for the Dollar Index. The long-term trend continues to favour the dollar for all the majors except for GBP/USD, NZD/USD and USD/JPY.

Note that the January EUR/USD effect is still in place, and suggests that the January high of the year, currently at 1.1718 basis the back-adjusted continuous contract, currently on June, will not be exceeded.

Interest rate futures

As anticipated and covered in recent weeks, interest rate futures have risen to new highs for the current move. We have been saying for months that interest rates would move lower, not higher. Rates move inversely to price, so higher prices equals lower rates and vice versa. This is a bull market in interest rate futures.

Weekly Update – 17 March 2019 – LS Trader

The S&P 500 completed a change of long-term trend reversal back to up this week, and the Nasdaq 100 and Dax may complete the same this week. Interest rate futures also resumed their long-term uptrend, while the dollar and most commodities remain mixed.

Stocks

Stock indices have shrugged off declining momentum and have rallied this week. The S&P 500 completed a breakout and change of long-term trend to up for the first time since October last year. The Nasdaq 100 may complete a similar trend change this week, as could the Dax. The Dax has been in a downtrend since September. All three markets mentioned above have seen their RSIs already breakout above 60, entering the bull range.

Commodities

Copper and Palladium both held above support this week, with Palladium rallying back to just below recent all-time highs. Copper will likely test support again this week.

The energy markets continue to rally against the long-term trend and are still some distance away from a change of trend to up.

Most of the grains markets have rallied sharply from their lows this week, and resistance will likely be tested on Monday.

Currencies

The currency markets remain mixed with the long-term trend mostly favouring the dollar. The British Pound did make an intra-day breakout to the upside, so far without follow-through, and remains in an uptrend against the dollar. The COT report continues to show a significant net long position in the Pound from commercials.

Interest rate futures

Interest rate futures saw further strength and some breakouts this week. The markets have closed with their RSIs either at or just below the 60 level. A decisive break above 60 would suggest further rallies to test the January highs. The long-term trend remains up across the board.