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.
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.
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.
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.