The past week, which was a shortened trading week due to the Presidents’ Day holiday in the US, was also a fairly quiet one by recent standards. Volatility has receded from the extremes seen at the start of the month.
Stocks continue their recovery after the recent sell-off, and the Nasdaq 100 stands a decent chance of new highs this week. Many other markets have spent most of the week consolidating, with the long-term trends remaining unaffected.
The long-term trends are currently up for stocks, down for the dollar, down for interest rates, mixed to up for commodities. Commodities continue to gain strength overall, and those that have not yet completed changes of trend to up continue to form a base. The CRB Commodity Index looks poised for a breakout from a base that has been in place for over three years.
From last week: “At present, the long-term trend remains up, and US stocks are heading back towards their all-time highs.” The Nasdaq 100 leads the way and may test all-time highs this week, with a breakout to new all-time highs a real possibility. Commercials are net long the Nasdaq 100 again, which is not a normal position. They are usually short due to hedging. They currently hold their largest net long position since December 2011, when the Nasdaq was trading around 2200. It stands at 6902.5 today, basis the March contract.
The energy markets continue to recover from the recent sell-off and may push higher to test their recent highs. The long-term trend remains up.
Gold ended the week lower and continues to consolidate below key resistance, and what may prove to be the neckline of an inverse head and shoulders.
Lumber advanced another 2.41% this week to print new all-time highs once again.
Soybean Meal made its highest print since July 2016 but was unable to make much progress after printing the new high, advancing only 0.53% for the week and printing an indecision bar on the weekly chart. The long-term trend remains bullish but volatility is nearing extreme levels, and a correction could be seen before the rally continues.
The dollar index continues to consolidate near the lows of the recent downtrend, and it remains in a long-term downtrend with new lows still a possibility.
The Euro ended the week lower by 0.93% but remains within range of a breakout. Commercials remain net short.
Interest rate futures
Interest rate futures fell to new lows for the current move earlier in the week before recovering and finishing the week with strength. Sentiment, which fell to single digits two weeks ago remains very bearish but has risen slightly this week. Commercials remain net long the sector.