Weekly Update – 18 August 2019 – LS Trader

Stocks

The Dax completed a change of long-term trend to down, but so far without follow-through. The Dax joins the Nikkei in a long-term downtrend, but neither index has made any progress to the downside since the breakout.

The S&P 500 and Nasdaq 100 both continue to trade in volatile fashion but remain in long-term uptrends.

Commodities

Gold reached its highest level since May 2013. Silver reached its highest level in 14 months. Both remain in long-term uptrends. Copper is the only metal currently in a long-term downtrend. Copper retraced this week to test the prior breakout level, which is now acting as resistance. The RSI remains in the bear range.

The energy markets continue to trade in a volatile fashion. Brent Crude, Natural Gas and Heating Oil are all in long-term downtrends. The latter rallied above short-term resistance this week.

Currencies

The British Pound has held support. The trend remains down, but new strength suggests resistance may be tested soon. Commercials remain very near an all-time net long position.

The long-term trends continue to favour the dollar overall. The Dollar Index itself has continued its receiver since support held.

Interest rate futures

The 30-year T-Bond made a new high print since October 2016 as interest rate futures continue to rally. Commercials are back to a net long position.

Interest rate futures remain in long-term uptrends across the board.

Weekly Update – 11 August 2019 – LS Trader

Stocks

Stocks saw considerable weakness during the week, followed by a strong recovery to retrace most of the week’s declines. This has left a strong hammer-like pattern on the weekly chart. It is not a hammer because the trend is wrong. There was not enough downtrend for it to be a reversal pattern, and, in terms of strict definition, the lower shadow was too long. However, the long-term trend remains up for the Nasdaq 100 and the S&P 500.

 

The trend is also still up for the Dax, but a change of trend to down is within range and could be completed in the coming weeks if we see additional weakness. The weakest of the stock indices is still the Nikkei, which never completed a change of trend to up when the other indices did. The Nikkei, therefore, remains in a downtrend.

 

Commodities

Gold advanced another 3.82% to reach its highest level since 2013. Silver also rallied and crossed above the 1700 level for the first time in 14 months. Except for Copper, the metals remain in strong uptrends.

 

Currencies

The British Pound made a new low print since January 2017, narrowly holding to the 1.20 level. The trend is down and may continue further, but sentiment is near a bearish extreme, with only 12% bulls, and, more importantly, record commercial buying. This week’s COT data shows that commercials now have their biggest net long position in history. Commercials are nearly always right at extremes, but often early. When this market turns, the move to the upside could be explosive.

 

Interest rate futures

Interest rate futures exploded higher again this week. The 30-year T-Bond made its highest print in almost three years, as the long-term uptrend remains intact. UK Long Gilts rallied to a new all-time high.

Weekly Update – 4 August 2019 – LS Trader

This past week saw the expected heightened volatility surrounding the Fed meeting on Wednesday. The Fed cut rates by 25 basis points, but the market was expecting more.

Stocks

Stocks broke lower in volatile fashion this week, breaking short-term support in the process. The long-term trend remains up, but this week’s action has done some technical damage. The RSI on the S&P 500 has closed right on the 40 level, which is bull market support, so next week could be a pivotal week. A decisive move below the 40 level will indicate considerable further weakness and a range shift in the RSI to bearish.

Commodities

The metals sector saw some wild swings this week. Gold, Silver and Palladium all remain in long-term uptrends. Copper, the only one of the four metals that is in a downtrend, broke recent support to fall to its lowest level since January.

Currencies

The British Pound fell to its lowest level since January 2017. The long-term trend is still down. However, there has been some evidence of buying due to the long lower shadow on Thursday’s candle followed by a bullish engulfing candle the next day, so we may see a corrective bounce. Another factor of interest is that commercials, the smart money, registered their third-largest long position in history on the Pound, so the smart money does not perceive Brexit to be bearish.

Interest rate futures

Interest rate futures rallied sharply this week, breaking to the upside. We have written in recent weeks that the long-term uptrend was intact and that price structure was incomplete and that we were expecting new highs in these markets. We got them this week.