This week will be a shortened trading week as Friday is Good Friday so US and UK markets will be closed.
The stock markets continue to rally higher towards the all-time highs printed last year.
The Nikkei 225, which has been the laggard of the four global stock indices that we trade at LS Trader could rally sufficiently to complete a change of long-term trend to up. This would put all four indices in a long-term uptrend and confirm the uptrend.
From last week: “The Crude markets are likely to test resistance in the coming days and could also complete a change of trend. Volatility is expanding nicely and is currently in the sweet spot for a trend move.”
Crude broke through resistance as expected, completing a change of long-term trend to up. Both Brent Crude and Heating Oil are within range of similar tests and may also breakout and complete long-term trend changes.
Gold and Silver continue to show weakness. There is a potential head and shoulders top formation in Gold, and a break of the neckline may lead to continued weakness towards 1222, very near to trend-defining support.
The dollar has seen some weakness this week but not enough to bring the trend against the Euro to an end. The dollar remains in proximity of breakouts against several of the major currency markets. Across the sector, there is an environment of collapsing volatility, and very low volatility levels are evident in several majors, which usually precedes a directional move.
Interest rate futures
From last week: “This makes last week’s lows in the sector a key support area. For now, the long-term trend remains up.” The key lows from the prior week were broken, bringing the uptrend to an end for now. The long-term trend remains up across the sector, but further short-term weakness looks likely before the trend reverses back to the upside.
The recent rally in stocks continued this week, and the S&P 500 and Nasdaq 100 may rally further to test the all-time highs printed last year.
The Dax rallied sufficiently to complete a change of trend to up, leaving the Nikkei as the only stock index that we trade in a long-term downtrend.
RBOB Gasoline is the first market in the energy complex to complete a change of trend reversal and is now back in a long-term uptrend. The Crude markets are likely to test resistance in the coming days and could also complete a change of trend. Volatility is expanding nicely and is currently in the sweet spot for a trend move.
The grains markets remain in a long-term bear market. None of the markets is likely to complete a change of trend soon, and unless something changes and we get a catalyst, it’s expected to be at least a few weeks before that changes.
From last week: “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.” The Dollar Index is testing resistance once again, and may breakout to the upside this week.
Also from last 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 Euro did break to new lows for the year as expected, but as yet without follow-through. A decisive upside breakout in the Dollar Index would confirm Euro weakness.
The British Pound does not know which way to turn and is back to almost the middle of the trading range that has been in place since last summer.
Interest rate futures
Interest rate futures have seen continued weakness this past week and tested support on Friday. Support held and buying returned, leaving a demand tail on the daily chart. This makes last week’s lows in the sector a key support area. For now, the long-term trend remains up.