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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.