From last week: “Stocks appear to have put in a short-term bottom on the 30th October and have rallied since. This week has seen both the S&P 500 and the Nasdaq 100 rally to test the upper trendline of a symmetrical triangle. If the breakout is successful, we may see a test of the all-time highs.”
The S&P 500 did make a successful breakout and printed new all-time highs on Monday, but ended up with an ugly candle. However, the weakness of that candle came back to re-test the symmetrical triangle, and that level held, and the market made a new all-time closing high on Friday.
The Nasdaq 100 made a test of all-time highs also on Monday but was unable to breakthrough. However, a breakout is within range. The Nikkei reached its highest level since January 1992. Stocks remain bullish and in long-term uptrends.
The metals and energy markets have seen some volatile trading this week, but both sectors remain mostly rangebound. The long-term trend is still up for metals and remains down for energies.
Grains, especially the Soybean markets, remain bullish, having printed new highs for the current move once again.
The currency markets have seen mixed trading this week, with the long-term trend against the dollar across the board.
Interest rate futures
Interest rate futures completed a change of trend to down, but have since reverted back to within the prior range. The trading range had gone on for so long and been so narrow, that it would not require much in the way of strength to turn the trend back to bullish.
The long-term trend picture has not changed despite the trading activity this week. The long-term trends are up for stocks, metals, interest rates, and grains. The long-term trend remains down for the Dollar and energies.
From last week: “The long-term trend remains up for global markets. US markets remain above medium-term support, and until that breaks, bearishness is premature.”
Stocks appear to have put in a short-term bottom on the 30th October and have rallied since. This week has seen both the S&P 500 and the Nasdaq 100 rally to test the upper trendline of a symmetrical triangle. If the breakout is successful, we may see a test of the all-time highs.
The metals markets could be on the move and may be set to test their recent highs. The long-term trend remains up across the sector.
The energy markets recovered sharply following their decline to their lowest levels since May. This week’s rally was not able to change the long-term trend to up, so the trend remains down.
Dollar weakness resumed this week as the Dollar moved lower across the board. The long-term trend remains against the Dollar.
Interest rate futures
Interest rate futures fell to a new low for the current move on Wednesday but then reversed sharply, printing a multi-bar key reversal day. This keeps the long-term uptrend intact for now.
Stocks moved lower this week which included a sharp down day on Wednesday. Despite this week’s selling and all the noise about increased volatility ahead of the US election this coming Tuesday, the downswing that began on the 13th October is comparable to the swing down from the all-time high that started on the 3rd September. The long-term trend remains up for global markets. US markets remain above medium-term support, and until that breaks, bearishness is premature.
The Dax has been the weakest index of late and could complete a change of trend to down early this week. The FTSE, which is not a market that we trade at LS Trader, but reflects European weakness, never by our proprietary measures completed a change of trend to up when the others did back in the summer and is still in a downtrend. Friday’s low was the lowest print since April.
The energy markets completed a change of long-term trend to down this week. The metals remain in long-term uptrends but are mostly consolidating in a corrective range.
Some Dollar strength has been seen this week, which is counter to the long-term Dollar downtrend. This has us currently flat in the currency markets as we wait for the markets to show direction. It will take significant Dollar strength for most majors to complete a change of long-term trend.
Interest rate futures
Interest rate futures remain in long-term uptrends but continue to trade mostly sideways, but towards the lower end of the range that has been in place for many months.