Weekly Update – 26 May 2019 – LS Trader

Monday is a Bank Holiday in the UK and is Memorial Day in the US. Therefore, most markets will be closed.

Stocks

The stock markets ended the week lower, but all remain in long-term uptrends except for the Nikkei, which was unable to complete a change of trend. The Nikkei found support just above a critical shelf of support which could be tested this week. If support here is broken, there is substantial room for further weakness, possibly back to the December low.

Commodities

From last week: “However, the long-term trend remains down, with Soybeans and Soybean Oil still in current downtrends and below resistance.” Soybean Oil and Soybeans remain weak and below resistance. However, Rough Rice completed a change of trend to up, and Oats also broke out to the upside. Corn may follow this week.

The energy markets got crushed this week, but remain in long-term uptrend expect for Natural Gas. Metals also remain weak, with Silver already in a downtrend and Gold could follow with weakness this week.

Currencies

The currency markets have seen mixed trading as the Dollar Index rallied to a new high for the current move, its highest print since May 2017. The index was unable to hold those levels and dropped back into the range, and may test support this week. The trend continues to favour the dollar against most of the majors, and if strength returns this week, further breakouts are within range.

Interest rate futures

From last week: “The 3 Month Eurodollar, basis the March 2020 contract, rallied to a new high for the current move. The remaining markets in the sector may test their March highs this week. The trend for interest rates, which move inversely to prices, remains down.” Interest rate futures rallied as expected, with all markets in the sector that we trade at LS Trader breaking out to new highs for the current move.

As we have been writing for months, the trend globally is towards lower interest rates, not higher. US interest rate futures posted their highest levels in 18 months this past week. UK Long Gilts made their highest print since October 2016 as events of the past week drastically increase the changes of Brexit happening.

Weekly Update – 19 May 2019 – LS Trader

Stocks

Stocks had a mixed week after a weak opening on Monday before a recovery during the middle of the week, which still resulted in a down week. The RSI on the daily S&P 500 dropped below the 40 level but only for a day. However, that breach of 40 was enough to have the RSI in a bear range. The long-term trend remains up.

Commodities

From last week: “Silver is the most likely to complete a change of trend to down shortly.” Silver broke support as expected, and completed a change of long-term trend to down, making its lowest print since December. The RSI remains in the bear range, as it has since March.

The grains markets may have bottomed this week as aggressive buying was seen shortly after the open. However, the long-term trend remains down, with Soybeans and Soybean Oil still in current downtrends and below resistance.

Currencies

It’s been a bullish week for the Dollar, which has advanced against most of the majors. The Dollar Index may test the late April high this coming week. The RSI crossed back above the 60 level this week.

The British Pound had a large head and shoulders bottom forming on the daily chart, but that pattern did not complete. Instead, the right shoulder has formed a head and shoulders top, and the neckline was violated. This indicates further weakness towards the January low and a possible change of long-term trend to down in the coming weeks.

The EUR/USD effect, which we have written about many times, stating that January tends to set the high or low for the year, continues to suggest that the Euro peaked at 1.1718 basis the back-adjusted continuous contract, back on January the 10th, and that the Euro will trade below that level (Dollar bullish) for the remainder of 2019.

Interest rate futures

From last week: “Interest rate futures continue to show signs of strength as the long-term uptrend appears to be getting back underway. The March high could be tested in the coming weeks.” Interest rate futures continued to rally this week. The 3 Month Eurodollar, basis the March 2020 contract, rallied to a new high for the current move. The remaining markets in the sector may test their March highs this week. The trend for interest rates, which move inversely to prices, remains down.

Weekly Update – 12 May 2019 – LS Trader

Stocks

From last week: “..the continued collapse in volatility does put a question mark against much further rally.” Both the Nasdaq 100 and the S&P 500 failed to make new highs this week and sold off aggressively. However, the daily chart shows long bull shadows on the daily bars, especially on Thursday and Friday, which suggests that the lows are being rejected and that buyers are stepping back in. Added to that, the RSI found support in the 40-50 range, and the long-term trend remains up.

From last week: “The Nikkei tested resistance and only needs to exceed last week’s high to complete a trend change to up to join the other three stock indices that we trade at LS Trader in long-term uptrends.” The Nikkei opened the week lower and, therefore, never completed the trend change and remains in a long-term downtrend.

Commodities

The metals markets remain in long-term uptrends overall, but price action continues to remain sloppy and without short-term directional bias. Silver is the most likely to complete a change of trend to down shortly.

The energy markets may have made a significant top in late April. Short-term price action suggests lower prices in the coming weeks. However, for now, the long-term trend remains up.

The grains markets remain weak, with most of the sector in extended downtrends. Soybeans printed its lowest price since late 2008; such is the extent of current price weakness. Soybean Oil may test the 25.70 level in the coming week or so, which is the lowest print since 2006.

Currencies

Price action remains mixed in the currency markets but continues to favour the dollar overall. The Aussie made its lowest print since January, and the Kiwi its lowest since October, but the Dollar Index corrected lower.

Interest rate futures

Interest rate futures continue to show signs of strength as the long-term uptrend appears to be getting back underway. The March high could be tested in the coming weeks.

Weekly Update – 5 May 2019 – LS Trader

Monday is a Bank Holiday in the UK, but US markets will be open as usual.

## Stocks
The S&P 500 printed a new all-time high this week but reversed sharply on the same day, before recovering most of those declines on Friday. The trend remains up, and new highs look likely. Similar price action was seen in the Nasdaq 100. The RSI remains in the bull range. However, the continued collapse in volatility does put a question mark against much further rally.

From last week: “The Nikkei tested resistance this past week but stands a good chance of a breakout this week ahead.” The Nikkei tested resistance and only needs to exceed last week’s high to complete a trend change to up to join the other three stock indices that we trade at LS Trader in long-term uptrends.

## Commodities
The energy markets saw further weakness this week but remain in long-term uptrends, except for Natural Gas.

The long-term trend remains up for metals, but they all are showing corrective price action at present with no directional bias.

The grains sector remains weak with all markets except for Oats in long-term downtrends.

## Currencies
The currency markets remain mixed, but with the long-term trend still favouring the Dollar against most of the majors.

The long-term trend for the British Pound remains up, and it’s possible that the recent correction is at an end and that a right shoulder low of a head and shoulders bottom formation has been completed. It is premature to front-run head and shoulders patterns and waiting for a breakout above the neckline is standard procedure. The RSI is testing 60 again having just about held the 40 support level during the last week of April.

## Interest rate futures
Interest rate futures continue to trade in a choppy, sideways mess in the short-term, but remain in long-term uptrends. The only market in the sector within range of a change of long-term trend to down is the UK Long Gilt.