Weekly Update – 26 August 2018 – LS Trader;

The past week has seen slight new all-time highs for the SPX, with both S&P 500 and Nasdaq 100 futures very close to their all-time highs. The dollar is undergoing a correction lower. Interest rate futures continue to show signs that they may have bottomed in the intermediate term with a possible change of trend to up within range. Commodities markets remain mixed.

Stocks

From last week on the S&P 500: “The trend remains up, and we may yet see another test of all-time highs.” The S&P 500 rallied to within a point of all-time highs, basis the continuation futures contract, but did print a new high basis the SPX. Strength remains in the US stock markets. The Nasdaq 100 is close to a test of all-time highs as well and could break out this week.

The Nikkei continues to advance from what may prove to be a right shoulder low of a possible inverted head and shoulders, which, if completed, would change the trend to up. For now, the long-term trend remains down.

Commodities

The lows printed during the previous week may end up being the lows for the time being. Sentiment had reached extremely bearish readings and is now moving up along with the price. We may see Gold and Copper both test resistance this week. The long-term trend remains down for the sector and will do so for some considerable time yet.

Recent corrective strength in the grains sector may have run its course as multiple contracts turned lower this week. Soybean Meal broke to the downside this week, completing a continuation rectangle pattern. If the pattern reaches its target, prices should decline to around the 300 level in the coming weeks.

Currencies

The dollar has seen some weakness this week and the period of recent dollar strength may be about to take a breather. However, the long-term trend continues to favour the dollar, and that will remain so for the near term at least. For now, current downtrends stay in place for AUD/USD and GBP/USD.

Interest rate futures

The long commercial position on the COT report reached a new record net long once again this week on the 10 Year T-Note. Prices continue to advance towards a test of the neckline of an inverted head and shoulders bottom. A change of trend to up is within range for multiple markets in this sector, which suggests that interest rates will be heading lower, not higher as the majority expects.

Good trading

Phil Seaton

LS Trader

Weekly Update – 19 August 2018 – LS Trader

The long-term trend remains up for US stocks and the US dollar. The trend for interest rate futures remains down but is on the verge of changing. Commodities remain in a long-term downtrend with only a few exceptions. The energy sector, which has been the strongest of the commodities for much of this year is possibly on the verge of breaking down and a trend change.

Stocks

The S&P 500 has had a mixed week. Weakness was seen during the first half of the week before a reversal from Wednesday’s lows. The trend remains up, and we may yet see another test of all-time highs.

From last week: “The Dax has seen continued weakness this week and may be headed lower to test the June lows. The RSI has been unable to get above the 60 level and remains in the bear range.” The Dax did test key support, which has so far held. It’s likely that we will see another test of support this week with a breakdown and resumption of the long-term downtrend on the cards.

The Nikkei displays a possible inverted head and shoulders, which, if completed, would change the trend to up.

Commodities

The metals markets have seen continued weakness this week with all four markets that we trade falling to their lowest level of the current move.

The energy markets have also continued their recent decline. For now, the entire sector remains in a long-term uptrend, but that could change in the coming weeks. Brent Crude is making a series of lower lows and lower highs and has also broken through the bottom of an almost 4-month rectangle, so far without follow-through.

Currencies

The dollar index rallied to its highest level since June 2017 this week but did print an ugly candle on Wednesday with downside confirmation following on Friday. Sentiment remains extremely bullish so we may see some additional weakness this week. The long-term trend remains bullish and continues to favour the dollar across the board.

Interest rate futures

The long commercial position on the COT report reached a new record net long this week with speculators recording a new record net short position. Such a profile, as we have written in recent weeks often resolves itself in favour of the commercials. For now, the long-term trend remains down but could change to up with additional strength. The head and shoulders bottom pattern continues to form.

Good trading

Phil Seaton

LS Trader

Weekly Update – 12 August 2018 – LS Trader

The past week has seen stocks stall from below their recent all-time highs and turn lower but remain in very established long-term uptrends. The dollar has resumed its long-term uptrend as expected, with multiple breakouts this week. Commodities remain weak, and interest rate futures could be building up for a further rally and a potential change of long-term trend.

Stocks

The S&P 500 reached its highest level since the January all-time high the week before weakness appeared during the second half of the week.

The Nasdaq 100 began the week with strength but fell just short of testing the recent all-time high, before moving lower on Friday. The long-term trend remains up, with the RSI in the bull range. New highs may yet be seen in both US indices.

The Dax has seen continued weakness this week and may be headed lower to test the June lows. The RSI has been unable to get above the 60 level and remains in the bear range.

Commodities

The metals remain in long-term downtrends, but there has been a lack of progress to the downside over the past few weeks, which suggests that the trend is stalling and possibly bottoming. However, the long-term trend is firmly down, three of the four metals are trading well below resistance, and the RSI remains in the bear range, and the rallies have seen the RSI unable to clear even the 40-50 level.

Currencies

From last week: “The dollar has seen a resumption of strength this week against several majors and is within range of breakouts in the Dollar Index, Euro, Australian and New Zealand Dollars. Sentiment remains extremely high in favour of the dollar.”

The dollar did breakout as expected in the Dollar Index, Euro, Australian and New Zealand Dollars. The long-term trend now appears to be back on track and favouring the dollar.

Also from last week: “The British Pound remains the weakest currency of the majors at present and the only one in an ongoing trend. The July 19th lows are likely to be tested this week.” The July 19th lows were tested and exceeded on Monday as the Pound fell out of bed against the dollar. This week’s 1.8% decline took the Pound down to its lowest level since June last year against the dollar.

Interest rate futures

From last week on interest rate futures: “…the possibility of a sharp rally increases as time goes on.” Interest rate futures rallied this week as expected and there was a sharp rally on Friday. This looks to be consistent with a low being in for now and could be the right shoulder of the previously mentioned head and shoulders pattern rallying towards the neckline.

The COT report has commercials at a record net long position again, and this provides a tailwind for rallies. There’s a good chance that we will see further strength in these markets and a test of the neckline at a minimum, with a change of long-term trend to up likely to follow.

Good trading

Phil Seaton

LS Trader

Weekly Update – 5 August 2018 – LS Trader

Strength is resuming in US stocks and the dollar, where the long-term trends both remain up. The long-term trends in other markets remain down for interest rate futures and most commodities.

Stocks

The S&P 500 has bounced multiple times off the top of the large symmetrical triangle pattern. This happened again this week with the index coming within a few points of support but holding firm. The long-term trend remains up, and the RSI is in the bus range. For now, nothing has changed in the analysis with a bullish outlook and an expectation of a test of all-time highs in the coming weeks.

The Nasdaq 100 began the week with a continuation of the prior week’s sell-off but reversed course this week after breaking short-term support. The RSI, however, found support above the 40 level and remains in the bull range. The long-term trend remains up, and new highs could be seen this week.

Commodities

The metals remain in long-term downtrends, with Gold currently being the weakest having fallen to new lows for the current move this week. Gold, Silver and Copper all showed some strength on Friday and possible reveal patterns, but these markets all remain below resistance.

The energy markets continue to decline, but all remain in long-term uptrends. Brent Crude is in a multi-week rectangle pattern which could act as a continuation or reversal rectangle. However, on balance, such patters resolve in the direction of the trend prior to the pattern, which in this case is up.

The grains markets have seen some strength this week, but the long-term trend remains down except for Rough Rice. Oats, which is often considered to be the leader of the grains complex has seen impressive strength this week and is now trading at its highest level since early March, with a change of long-term trend within range.

Currencies

The dollar has seen a resumption of strength this week against several majors and is within range of breakouts in the Dollar Index, Euro, Australian and New Zealand Dollars. Sentiment remains extremely high in favour of the dollar.

The British Pound remains the weakest currency of the majors at present and the only one in an ongoing trend. The July 19th lows are likely to be tested this week.

Interest rate futures

From last week: “Weakness has been seen this week, and we may see further selling and a possible test of the recent lows. The long-term trend remains down for the sector.”

Weakness was seen again in the sector this week before a reversal on Thursday. The commercial long position in the 10 Year T-Note hit a new all-time high this week on the COT report, and the RSI has reversed from bull market support. For now, the trend remains down, but the possibility of a sharp rally increases as time goes on.

Good trading

Phil Seaton

LS Trader