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.

Weekly Update – 10 March 2019 – LS Trader

The dollar uptrend resumed this week, and there could be further long dollar breakouts in the coming days. Interest rate futures also look set to resume their long-term uptrend, while stocks continue to look tired as momentum wanes.

This week sees quarterly stock and currency expiration, where the March contract rolls to the June contract.

Stocks

From last week on stocks: “It is also notable that volatility and volume have contracted and that there is bearish momentum divergence. This shows that the current rallies are tired.” The stock markets have shown continued weakness this week as the corrective rally from the late December lows continues to look like it may be in its latter stages.

Commodities

Copper and Palladium have both seen weakness this week, and it’s likely that both markets will test support in the coming day or so, with the trends under pressure. Palladium has been a monster move, and the LS Trader system has been long since the 19th of September. If the trade is exited this week, which appears likely, it will be the largest winning trade of the year to date.

Currencies

From last week on the dollar: “The long-term trend remains up for the dollar against most of the majors, and there are possible long dollar breakouts within range this week. These include resumptions of the long-term trend for the Dollar Index (up) and the EUR/USD (down)”. Both of these markets broke out as expected, resuming the long-term dollar uptrend. Further breakouts this week are within range for the dollar against the Australian and Canadian dollar.

Interest rate futures

From last week on interest rate futures: “Bull market RSI support is being tested with the markets closing just above the 40 level on Friday”. RSI bull market support held firm and interest rate futures put in a rally, and we could see multiple breakouts this week. The long-term trend remains up across the sector, and new highs for the current move could be seen within the coming weeks.

Weekly Update – 3 March 2019 – LS Trader

Stocks

Global stocks have continued to recover since the late December lows. A change of long-term trend to up is moving within range, but there is clear resistance at current levels. It is also notable that volatility and volume have contracted and that there is bearish momentum divergence. This shows that the current rallies are tired.

Commodities

Gold and Silver have both seen considerable weakness this week, and we exited our long Gold trade on a break of resistance. In spite of this weakness, Palladium made new all-time highs and Copper also made new highs for the current move.

Currencies

The long-term trend remains up for the dollar against most of the majors, and there are possible long dollar breakout within range this week. These include resumptions of the long-term trend for the Dollar Index (up) and the EUR/USD (down). USD/JPY is within range of a change of long-term trend breakout to up.

The British Pound is the exception, which tested long-term trend resistance this week and is in range of completing a change of long-term trend to up.

Interest rate futures

Interest rate futures remain in long-term uptrends, but all have seen weakness this week. Bull market RSI support is being tested with the markets closing just above the 40 level on Friday. Next week could be a pivotal week for the sector because if support is broken there is plenty of room for additional weakness before the next level of support is reached.