LS Trader Weekly Update 27th August 2012

Stocks pushed to new highs for the year early in the week but have corrected somewhat since. For now the uptrend remains intact. The dollar ended the week mostly lower and the trend for the dollar is still mixed. Dollar weakness has benefited commodities, many of which have been higher this week. Metals in particular have had a good week.

The long-term trends are up for U.S. stocks but mixed for the dollar and commodities.

Stocks

The S&P 500 hit new highs since early 2008 but did pull back from those highs later in the week. Friday saw a bit of a recovery, which left the market closing back above the 1400 level. The trend still remains up but how much longer this continues to be the case for remains to be seen.

The Nasdaq 100 performed similarly to the S&P 500 having hit new 11-year highs on Tuesday, only to pull back later in the week. The trend is still up and the market still very bullish. The Nasdaq remains further above support than the S&P 500, suggesting that its uptrend may last a little longer.

The Dax came within a whisker of giving a change of long-term trend to up according to our proprietary trend indicators but failed to complete the trend change. Support came in around 6900 but for now the trend is still down. The trend is also still down for the Nikkei 225, which this week reached its highest level since early May.

Commodities

The best trending markets are still coming from the grains sector, which has seen several huge moves this summer. Both Soybeans and Soybean Meal reached new all time highs this week and these moves have been highly profitable for the LS Trader system. Other markets in the sector as also strong, especially Corn, with Oats and Wheat also in strong uptrends.

We wrote last week that a break above $1650 for Gold might lead to a test of the 200-day moving average and a possible continuation towards the $1700 level. Gold did indeed clear the 200-day MA and was looking good for a continuation higher towards $1700. Friday’s doji pattern suggests that the market may be pausing here but whether it continues higher remains to be seen. Often we see this type of chart action develop in to an evening star pattern, which is a bearish reversal pattern. For that pattern to complete we would need to see Monday’s candle be a long black candle that closed at least 50% in to Thursday’s tall white candle. Such a move would lead to a test of support at the 200 day MA. Alternatively, should the market close above the high of this forming pattern a move towards $1700 and a change of long-term trend to up will likely follow.

The energy market ended the week mixed but had been higher earlier in the week. The strongest of the sector is still No leaded gas, the only market in the sector where the long-term trend is up.

Coffee declined for a fifth straight week and still remains on course for our 15300 target on the December contract.

Currencies

The dollar index ended the week lower by 1.21% and briefly took out support at 8139 before bouncing exactly off the 200 day moving average on Thursday. Friday saw a continuation of strength and this pattern, known as a snap and crack suggests that the market was unable to hold below support and may now continue higher. The long-term trend is still up but this may change soon if the aforementioned support fails to hold.

Interest rate futures

The long-term trend in the interest rate futures sector is still up. This week saw a continuation of the market rejecting the lows as evidenced but the long lower shadows on Monday and Tuesday’s daily candles. This formed a platform for quite a strong rally for the week for 30 year US T-bonds, which ended higher by 1.71%. Those that thought that a top was in and went short will have been caught once again by going against a very strong uptrend. As we have written for the past couple of weeks, further weakness is required before we get a confirmation of a change of trend to down.

Good trading

Phil Seaton

www.LSTrader.co.uk

LS Trader Weekly Update 20th August 2012

Stocks have continued to press higher with S&P 500 futures clearing the April high to hit a new high for the year. The Nasdaq 100 has moved to within touching distance of its April high and may break through this week. The dollar remains mixed with the dollar index advancing by just 0.04% this week. The index formed a doji on the weekly chart, which indicates indecision. Commodities also remain mixed.

Stocks

As mentioned above, the S&P 500 did hit new highs for the year on the September futures contract, with the Nasdaq 100 only just behind and threatening to do the same this week.

The biggest advance of the week from the stock indexes came from the Nikkei 225, which advanced 3.25%, to reach a 15-week high. However, the long-term trend is still down for this index and further strength will be required before that changes.

The Dax advanced for a sixth straight week, adding another 1.21% weekly gain to the run. The long-term trend for the Dax is still down but that looks set to change soon and may do so this week.

Commodities

Grains markets have been mixed but have on balance been lower. Wheat ended the week lower by 1.21% but had been much lower earlier. Wheat has since formed a hammer pattern on the weekly charts, which suggests the selling earlier this week may have been overdone and that the bull market may yet resume. Rough Rice ended the week lower by 3.29% but as with Wheat had been considerably lower mid-week before recovering about half of the week’s losses.

Gold is still in a long-term downtrend and ended this week down by 0.21%. As we wrote last week, a break above $1650 may lead to a test of the 200-day moving average and a possible continuation towards the $1700 level.

The energy markets continue to press higher with moves that are still counter to the long-term trend. Continued strength may lead to a change of trend for some of the sector in the not too distant future.

Coffee continued the long-term down trend, declining by 3.63% this week and continues to head for our target around the 15300 level on the December contract.

Currencies

The dollar index ended the week virtually flat and is still clearly undecided on future direction. Support is still in place around 8200 and the long-term trend is still up. The dollar is in fact a mixed bag at present against most of the majors. However, the dollar is rising against the Yen having finally pushed up through resistance at the 200 day moving average. There is potentially plenty of upside in this move if resistance around 8050 can be cleared.

The Canadian dollar still leads the way and continues to push the US dollar down towards our target at the April lows.

The Euro is still being held down by the 50-day moving average and the long-term trend is still very much down and we still expect to see further weakness to take the Euro back down towards the recent 2 year lows.

Interest rate futures

Interest rate futures are beginning to look a bit ugly in the short-term but are still very much in a long-term uptrend. The long-term bull market is still in place and further confirmation will be required to the downside before the trend will change to down. However, many traders have been waiting for this sector to head sharply lower so if longer-term support does get taken out in the next few weeks we could see the downside move gather momentum.

Good trading

Phil Seaton

www.LSTrader.co.uk

LS Trader Weekly Update 13th August 2012

Stocks have continued with recent strength and all four of the stock indexes that we trade at LS Trader have advanced this week, even the two indexes that are in a long-term downtrend, the Nikkei and the Dax. As a general rule the dollar moves in the opposite direction to stocks so the rise in stocks would normally equate to a drop in the dollar, but that has not been seen this week as for the most part the dollar has gone sideways, remaining undecided on future direction.

The long-term trends are still mixed across the different market sectors

Stocks

The S&P 500 continued with recent strength, making new highs for the current move and remaining on target for a test of the year’s highs posted in early April

The Nasdaq 100 advanced 1.87% for the week and still looks set for a test of the year’s highs, although this market remains further back from the highs than the S&P 500.

The Nikkei 225 had the biggest up-move for the week, advancing 2.82%, bringing the downtrend to an end for the short-term. However, the long-term trend is still down and considerable further strength will be required before that changes. The 9200 area looks like the next target to the upside if the rally continues.

The Dax also advanced, for a fifth straight week and also looks as though it may continue to test the highs of the year.

Commodities

Grains markets continued with recent strength with new all time highs being reached on Friday before the markets slipped back again. The drought in the U.S. that is behind these price moves is still very much underway. Reports show that a sixth of this year’s Corn crop has been destroyed just in the month of July, the hottest month on record in the U.S.  Corn actually hit new all time highs on Friday before reversing that move and closing on the low of the day to end the week slightly lower. Following Friday’s pullbacks it remains to be seen whether we have seen the top of these markets. For now the up-trends are very much intact.

Gold remains in a long-term downtrend but has risen this week and is now moving towards the top of the recent trading range. A break above $1650 may lead to a test of the 200 day moving average and a possible continuation towards the $1700 level.

Coffee has broken lower again, continuing weakness from the rounded top formed in July and may head down towards the lows of the year, around the 15300 level on the December contract.

Currencies

The dollar index managed a small gain for the week having recovered from weakness seen on Monday and Tuesday. The long-term trend is up and support looks to be forming around 8200 in the short-term.

The Canadian dollar continues to lead the way, having pushed the U.S. dollar further down away from parity. The April lows still look to be the next target.

The Euro managed to clear the 50-day moving average but was unable to stay above it and push higher. The long-term downtrend remains in place and we may see further weakness down towards the recent 2 year lows.

Interest rate futures

Interest rate futures took out the next level and continued lower before new support was found, enabling the markets to recover much of the week’s losses. As before the long-term uptrend still remains in place and further weakness will be required for a change of trend to down.

Good trading

Phil Seaton

www.LSTrader.co.uk

LS Trader Weekly Update 6th August 2012

The past week has seen an increase in volatility in the currency markets and in the stock indexes. The dollar in particular has made some large swings this past week but has ended the week lower. The long-term trends still mostly favour the dollar but this may be going to shift soon. Stocks recovered initial weakness and rallied to new highs for the current move on Friday. The long-term trend for US stocks remains up.

Stocks

The S&P 500 rallied to new highs for the current move and the highs of the year posted in early April now look to be a realistic target. The Nasdaq 100 also hit new highs for the current move and the target now will be the highs of the year.

The most bullish daily move came from the Dax on Friday, which posted a tall white candle to hit new highs for the current move. The index did run in to resistance around 6890 but will likely have another go at that level this week. If it can clear resistance then 7000 will be the next focus point and possibly the highs of the year around 7200.

The Nikkei has continued to grapple with the 50 day MA and remains the weakest of the indices that we trade at LS Trader. The long-term trend is still down.

Commodities

Gold continues with its sideways consolidation within the $100 box range. As before, a break out of this range may lead to a move of around $100 in the direction of the breakout. The long-term trend is still down.

The energy markets have been mostly bullish, which is counter to the long-term trends, all of which are down with the exception of Natural Gas. The biggest move came from no leaded gas, which advanced 4.8% for the week. No leaded gas continues to lead the sector and will likely be the first market to give a change of trend to up should the current strength continue.

The grains markets remain bullish and are still not that far from the all time high prices that a few of the markets hit a couple of weeks ago.

The largest down move for the week came from Lean Hogs, which ended the week lower by some 6.74% to reach new lows for the October contract.

Currencies

The forex markets have seen a sharp increase in volatility with large daily swings being seen in many markets. On balance the long-term trend still favours the dollar but this is beginning to shift, especially against the commodity based currencies of Canada, Australia and the New Zealand dollar, the latter of which is on the verge of a change of long-term trend to up.

The Euro did press higher, almost exactly to the 50 day moving average as we suggested may happen in last week’s update. The long-term trend is still down.

Interest rate futures

The interest rate futures sector saw further weakness this past week, especially on Friday. However, as we wrote last week the long-term uptrend still remains in place across the sector and further weakness will be required for a change of trend to down.

Good Trading

Phil Seaton

www.LSTrader.co.uk