The S&P 500 and the Nasdaq 100 both ended the week lower, but remain in long-term uptrends. However, price has now fallen to the middle of the range, and a change of trend to down is within range and could be seen over the coming weeks.
The Nikkei held below resistance and remains in a long-term downtrend. The Dax rallied sufficiently to kick us out of our short position, but the trend remains down, and we may soon see a new breakout to the downside.
Gold declined during the week but put in a strong rally on Friday. Silver traded similarly. Both markets ended the week with a new high close for the current move.
Copper remains the only metal in a long-term downtrend. Friday saw Copper decline to a new low for the current move. The weakness seen on Thursday and Friday was accompanied by above-average volume.
From last week: “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 Pound rallied and broke resistance as expected, bringing an end to the downtrend for at least the short-term. The long-term trend remains down, but prices are rallying in the short-term. Powered by near-record net long commercials, this rally could go further than many expect.
Interest rate futures
Interest rate futures declined during the week but found support on Friday to keep the uptrend intact. The long-term trend remains up across the board.
UK Long Gilts were the weakest in the sector, and they broke short-term support this week, resulting in the LS Trader system exiting its second-most profitable trade of the year, where we had been long since May, capturing a huge move.
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.
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.
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.
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.
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.
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.