Weekly Update – 25 July 2020 – LS Trader

Stocks

The Nasdaq 100 did not make a new all-time high this week and sold-off from Tuesday, violating the trendline and short-term support. Friday did see some buying come in to close the market off the lows with a sping. The trend remains up.

Commodities

The metals markets have seen some big moves, with Gold and Silver making multi-year highs. Silver looks vulnerable to a correction due to reaching a volatility extreme this week.

From last week: “Lumber was the big mover of the week, closing the week with a 10.33% gain. Volatility has reached its highest level in almost 18 months so we may be due a correction back to fair value.” Lumber opened the week higher but then reversed from the volatility extreme mentioned last week and pulled back to value. Buying came in from Thursday’s low. The market remains extended and will likely move sideways for a bit from here. The trend remains up.

Currencies

The currency markets have started to move following weakness from the dollar. The Dollar Index itself completed a change of trend to down, while EUR/USD completed a change of trend to up. The long-term trend is now down for the dollar against all majors except the British Pound.

Interest rate futures

Interest rates futures continue to grind gradually higher in a very low volatility environment, with a slight upward bias. The eventual breakout from this low volatility range should yield a decent move, with the bias currently to the upside in the direction of the primary trend. However, the price action is far from compelling.

Weekly Update – 18 July 2020 – LS Trader

Stocks

The Nasdaq 100 made a new all-time high on Monday but then corrected lower to trendline support, and spent the rest of the week trading sideways. The trend remains up, and the market is above short-term support.

Commodities

From last week: “Copper has rallied strongly since completing a change of trend to up two weeks ago. Copper prices are now testing this year’s high posted back in January.” Copper printed a new high for the year, but printed a long-legged doji on the weekly chart, suggesting indecision. The trend is up. Silver made its highest print since September last year.

From last week: “Lumber also completed a change of trend and has broken out to new highs for the year, and its highest level since July 2018. Volatility has reached elevated levels in Lumber.” Lumber was the big mover of the week, closing the week with a 10.33% gain. Volatility has reached its highest level in almost 18 months so we may be due a correction back to fair value.

Currencies

The currency markets continue to trade mostly sideways, with breakouts in range. These markets have been subdued for quite some time and are due a volatility expansion. Whether there will be a catalyst to deliver that remains to be seen.

Interest rate futures

Interest rates futures remain at exceptionally low volatility levels and continue to trade in an extremely tight range. The eventual breakout from this low volatility range should yield a decent move, with the bias currently to the upside in the direction of the primary trend.

Weekly Update – 11 July 2020 – LS Trader

Stocks

The Nasdaq 100 remains the global leader for stock indices and printed new all-time highs again this week. The trend remains strong and has expanding volatility, suggesting there could be further gains. As we have said previously, when long, one should be long the strongest market in that asset class or sector, and when short, short the weakest.

The other stock indices continue to lag and remain in long-term downtrends with downside and upside breakouts within range. It’s not impossible that we could see the Nasdaq 100 continue to make new all-time highs while the other indices break to the downside. The Nasdaq 100 is the outlier.

Commodities

Gold broke above the 1800 level to reach its highest level in seven years basis the back adjusted contract. Silver reached its highest level since September last year. Copper has rallied strongly since completing a change of trend to up two weeks ago. Copper prices are now testing this year’s high posted back in January.

Lumber also completed a change of trend and has broken out to new highs for the year, and its highest level since July 2018. Volatility has reached elevated levels in Lumber.

Currencies

The currency markets remain subdued overall. NZD/USD completed a change of long-term trend to up this week and is now back at its highest level since January. There are a few other breakouts within range this week, including the dollar index.

Interest rate futures

Interest rates made another move to the upside but continue to trade in a very low volatility environment. The 5 Year T-Note reached a new all-time high. The long-term trend remains up across the sector.

Weekly Update – 4 July 2020 – LS Trader

The past week was a shortened trading week due to the US Independence Day Holiday.

Stocks

The Nasdaq 100 continues to be the leader in global stock indices, rallying for each of the four trading days this week to print new all-time highs. Friday’s close was a new weekly and daily all-time high close. This is not something you see in downtrends! When long, one should be long the strongest market in that asset class or sector, and when short, short the weakest.

However, the strength in the Nasdaq 100 is not present in other stock indices, so we continue to have bearish non-confirmation. The S&P 500, by contrast, remains below its June high and significantly below its all-time high printed back in February.

Commodities

From last week: “Gold exceeded resistance at 1789 but so far without follow through. The long-term uptrend remains intact, and we may see further rally if the market can clear 1800.” August Gold made its way above the 1800 level but has been unable to close above it. Silver continues to lag Gold but is within range of a change of long-term trend to up. For now, the trend remains down for Silver and downside breakouts below the 200-day moving average are also within range.

Copper completed a long-term trend change to up this week and is now at pre-crisis levels not seen since January.

Currencies

The currency markets remain quiet and continue to consolidate. The long-term trends remain mixed.

Interest rate futures

The 5 Year T-Note rallied to a new all-time high. The 10-year also moved out of the sideways channel briefly this week. As yet, neither market has made further gains.