Weekly Update – 20 April 2019 – LS Trader

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

## Stocks
Stock indices hit new highs for the current move. The RSI on a weekly level has cleared the 60 level on both the S&P 500 and the Nasdaq 100 and is testing it on the Dax. This suggests that there is still potentially further to go in this rally. As before, only the Nikkei remains in a long-term downtrend of the four stock indices we trade at LS Trader and could complete a trend change this week.

## Commodities
From last week: “Crude broke through resistance as expected, completing a change of long-term trend to up. Both Brent Crude and Heating Oil are within range of similar tests and may also breakout and complete long-term trend changes.”

Both Brent Crude and Heating Oil made breakouts and completed the trend change to up. Natural Gas, the only energy market in a downtrend, broke to the downside.

Also from last week: “Gold and Silver continue to show weakness. There is a potential head and shoulders top formation in Gold, and a break of the neckline may lead to continued weakness towards 1222, very near to trend-defining support.” Gold fell through the neckline and may now head lower towards 1222, but for now, the long-term trend remains up.

## Currencies
From last week: “Across the sector, there is an environment of collapsing volatility, and very low volatility levels are evident in several majors, which usually precedes a directional move.” The Dollar Index rallied sharply on Thursday to exceed the March peak and move to its highest level of the current move. The Euro remained below support and moved sharply lower on Thursday, moving inversely to the Dollar Index. The Dollar also broke to the upside against the Swiss franc.

## Interest rate futures
From last week: “The long-term trend remains up across the sector, but further short-term weakness looks likely before the trend reverses back to the upside.” It’s possible that a short-term low may have been printed on Thursday as the RSI bounced off the 40 level, keeping these markets in the bull range. In addition, price action saw a 3-day morning star bullish reversal printed. The trend remains up.

Weekly Update – 14 April 2019 – LS Trader

This week will be a shortened trading week as Friday is Good Friday so US and UK markets will be closed.

Stocks

The stock markets continue to rally higher towards the all-time highs printed last year.

The Nikkei 225, which has been the laggard of the four global stock indices that we trade at LS Trader could rally sufficiently to complete a change of long-term trend to up. This would put all four indices in a long-term uptrend and confirm the uptrend.

Commodities

From last week: “The Crude markets are likely to test resistance in the coming days and could also complete a change of trend. Volatility is expanding nicely and is currently in the sweet spot for a trend move.”

Crude broke through resistance as expected, completing a change of long-term trend to up. Both Brent Crude and Heating Oil are within range of similar tests and may also breakout and complete long-term trend changes.

Gold and Silver continue to show weakness. There is a potential head and shoulders top formation in Gold, and a break of the neckline may lead to continued weakness towards 1222, very near to trend-defining support.

Currencies

The dollar has seen some weakness this week but not enough to bring the trend against the Euro to an end. The dollar remains in proximity of breakouts against several of the major currency markets. Across the sector, there is an environment of collapsing volatility, and very low volatility levels are evident in several majors, which usually precedes a directional move.

Interest rate futures

From last week: “This makes last week’s lows in the sector a key support area. For now, the long-term trend remains up.” The key lows from the prior week were broken, bringing the uptrend to an end for now. The long-term trend remains up across the sector, but further short-term weakness looks likely before the trend reverses back to the upside.

Weekly Update – 7 April 2019 – LS Trader

Stocks

The recent rally in stocks continued this week, and the S&P 500 and Nasdaq 100 may rally further to test the all-time highs printed last year.

The Dax rallied sufficiently to complete a change of trend to up, leaving the Nikkei as the only stock index that we trade in a long-term downtrend.

Commodities

RBOB Gasoline is the first market in the energy complex to complete a change of trend reversal and is now back in a long-term uptrend. The Crude markets are likely to test resistance in the coming days and could also complete a change of trend. Volatility is expanding nicely and is currently in the sweet spot for a trend move.

The grains markets remain in a long-term bear market. None of the markets is likely to complete a change of trend soon, and unless something changes and we get a catalyst, it’s expected to be at least a few weeks before that changes.

Currencies

From last week: “Strength looks to be returning to the dollar, at least in the short-term The Dollar Index has retraced most of its decline since the March 7th high and may breakout this week.” The Dollar Index is testing resistance once again, and may breakout to the upside this week.

Also from last week: “Similarly, the Euro, a near perfect inversion of the Dollar Index, may this week break to the downside and new lows for the year.” The Euro did break to new lows for the year as expected, but as yet without follow-through. A decisive upside breakout in the Dollar Index would confirm Euro weakness.

The British Pound does not know which way to turn and is back to almost the middle of the trading range that has been in place since last summer.

Interest rate futures

Interest rate futures have seen continued weakness this past week and tested support on Friday. Support held and buying returned, leaving a demand tail on the daily chart. This makes last week’s lows in the sector a key support area. For now, the long-term trend remains up.

Weekly Update – 31 March 2019 – LS Trader

Stocks

Stocks pulled back and tested support this week but support held, and the uptrend remains intact. Both the S&P 500 and Nasdaq 100 are undergoing volatility compression, so we may see an increase in volatility and a sharp move in the coming week or so.

Commodities

From last week: “Palladium hit a new all-time high but put in a reversal on Friday, giving back all of the gains for the week. The weekly chart indicates a shooting star, which may indicate further weakness this week. The trend is mature, the sentiment is high, and weekly volatility is at its highest ever level.” As expected, Palladium’s rally came to an end this week and did so in dramatic fashion. Wednesday saw the market fall through support, bringing the uptrend and the most profitable trade so far this year for the LS Trader system to an end. Weakness followed on Thursday. Palladium closed the week lower by 11.46%.

Gold and Silver have also seen weakness, but Copper, currently the strongest of the metals, looks set to test resistance in the coming days.

Currencies

Strength looks to be returning to the dollar, at least in the short-term The Dollar Index has retraced most of its decline since the March 7th high and may breakout this week.

Similarly, the Euro, a near perfect inversion of the Dollar Index, may this week break to the downside and new lows for the year. The British Pound, the subject of much Brexit speculation, remains in a broad range between 1.2570 and 1.3470 basis the back-adjusted continuous futures contract as it has since July last year. Sentiment remains low on the Pound, but commercials remain net long, where they have been accumulating Pounds since June 2018.

Interest rate futures

The bull market in interest rate futures remains intact. All five markets that we trade at LS Trader hit new highs for the current move, but there has been some weakness seen on Thursday and Friday. The trend remains up with markets well above support.

Weekly Update – 24 March 2019 – LS Trader

Stocks

The Nasdaq 100 completed a trend reversal breakout to the upside this week and reached a new high for the move on Friday before closing the day lower. The long-term trend is up for the Nasdaq 100, S&P 500 and Dax, but remains down for the Nikkei, which remains the weakest of the four stock indices that we trade at LS Trader.

Commodities

Metals have seen weakness this week with the trend for Copper coming to an end for now with a break of support. Gold and Silver both edged higher. Palladium hit a new all-time high but put in a reversal on Friday, giving back all of the gains for the week. The weekly chart indicates a shooting star, which may indicate further weakness this week. The trend is mature, the sentiment is high, and weekly volatility is at its highest ever level.

Currencies

The dollar has had a mixed week, trading sharply lower and then reversing on Friday, forming a v-bottom on the daily Dollar Index. The long-term trend remains up for the Dollar Index. The long-term trend continues to favour the dollar for all the majors except for GBP/USD, NZD/USD and USD/JPY.

Note that the January EUR/USD effect is still in place, and suggests that the January high of the year, currently at 1.1718 basis the back-adjusted continuous contract, currently on June, will not be exceeded.

Interest rate futures

As anticipated and covered in recent weeks, interest rate futures have risen to new highs for the current move. We have been saying for months that interest rates would move lower, not higher. Rates move inversely to price, so higher prices equals lower rates and vice versa. This is a bull market in interest rate futures.

Weekly Update – 17 March 2019 – LS Trader

The S&P 500 completed a change of long-term trend reversal back to up this week, and the Nasdaq 100 and Dax may complete the same this week. Interest rate futures also resumed their long-term uptrend, while the dollar and most commodities remain mixed.

Stocks

Stock indices have shrugged off declining momentum and have rallied this week. The S&P 500 completed a breakout and change of long-term trend to up for the first time since October last year. The Nasdaq 100 may complete a similar trend change this week, as could the Dax. The Dax has been in a downtrend since September. All three markets mentioned above have seen their RSIs already breakout above 60, entering the bull range.

Commodities

Copper and Palladium both held above support this week, with Palladium rallying back to just below recent all-time highs. Copper will likely test support again this week.

The energy markets continue to rally against the long-term trend and are still some distance away from a change of trend to up.

Most of the grains markets have rallied sharply from their lows this week, and resistance will likely be tested on Monday.

Currencies

The currency markets remain mixed with the long-term trend mostly favouring the dollar. The British Pound did make an intra-day breakout to the upside, so far without follow-through, and remains in an uptrend against the dollar. The COT report continues to show a significant net long position in the Pound from commercials.

Interest rate futures

Interest rate futures saw further strength and some breakouts this week. The markets have closed with their RSIs either at or just below the 60 level. A decisive break above 60 would suggest further rallies to test the January highs. The long-term trend remains up across the board.

Weekly Update – 10 March 2019 – LS Trader

The dollar uptrend resumed this week, and there could be further long dollar breakouts in the coming days. Interest rate futures also look set to resume their long-term uptrend, while stocks continue to look tired as momentum wanes.

This week sees quarterly stock and currency expiration, where the March contract rolls to the June contract.

Stocks

From last week on stocks: “It is also notable that volatility and volume have contracted and that there is bearish momentum divergence. This shows that the current rallies are tired.” The stock markets have shown continued weakness this week as the corrective rally from the late December lows continues to look like it may be in its latter stages.

Commodities

Copper and Palladium have both seen weakness this week, and it’s likely that both markets will test support in the coming day or so, with the trends under pressure. Palladium has been a monster move, and the LS Trader system has been long since the 19th of September. If the trade is exited this week, which appears likely, it will be the largest winning trade of the year to date.

Currencies

From last week on the dollar: “The long-term trend remains up for the dollar against most of the majors, and there are possible long dollar breakouts within range this week. These include resumptions of the long-term trend for the Dollar Index (up) and the EUR/USD (down)”. Both of these markets broke out as expected, resuming the long-term dollar uptrend. Further breakouts this week are within range for the dollar against the Australian and Canadian dollar.

Interest rate futures

From last week on interest rate futures: “Bull market RSI support is being tested with the markets closing just above the 40 level on Friday”. RSI bull market support held firm and interest rate futures put in a rally, and we could see multiple breakouts this week. The long-term trend remains up across the sector, and new highs for the current move could be seen within the coming weeks.

Weekly Update – 3 March 2019 – LS Trader

Stocks

Global stocks have continued to recover since the late December lows. A change of long-term trend to up is moving within range, but there is clear resistance at current levels. It is also notable that volatility and volume have contracted and that there is bearish momentum divergence. This shows that the current rallies are tired.

Commodities

Gold and Silver have both seen considerable weakness this week, and we exited our long Gold trade on a break of resistance. In spite of this weakness, Palladium made new all-time highs and Copper also made new highs for the current move.

Currencies

The long-term trend remains up for the dollar against most of the majors, and there are possible long dollar breakout within range this week. These include resumptions of the long-term trend for the Dollar Index (up) and the EUR/USD (down). USD/JPY is within range of a change of long-term trend breakout to up.

The British Pound is the exception, which tested long-term trend resistance this week and is in range of completing a change of long-term trend to up.

Interest rate futures

Interest rate futures remain in long-term uptrends, but all have seen weakness this week. Bull market RSI support is being tested with the markets closing just above the 40 level on Friday. Next week could be a pivotal week for the sector because if support is broken there is plenty of room for additional weakness before the next level of support is reached.

Weekly Update – 24 February 2019 – LS Trader

The past week was a shortened week due to the Presidents’ Day holiday in the US. It was also a very active week for rollovers as multiple March contracts were rolled forward to the next contracts.

Stocks

The S&P 500 edged higher this week but with volume and volatility are in decline. The RSI hit 70.9 on Wednesday, its highest level since the 29th of August. The long-term trend remains down. The Nasdaq 100 is trading in a very similar fashion to the S&P 500.

All 4 of the stock indices that we trade at LS Trader continue to grind higher in the short-term, in counter-trend rallies to the primary long-term trend, which remains down.

Commodities

Metals remain strong with new highs being seen this week in Gold and Palladium, the latter of which was a new all-time high. High-Grade Copper completed a change of long-term trend to up, having rallied to its highest level since July last year. Silver, which is the weakest of the metals at present, may test resistance in the coming week or so.

Currencies

The long-term trend remains up for the dollar against most of the majors, and therefore, for the Dollar Index. However, the index moved lower this week, breaking below short-term support printed the prior week. Volatility continues to contract and does volume. The RSI remains in the bullish range.

The Euro, which is a near-perfect inversion of the Dollar Index naturally moved higher this week but remains below resistance. Recall that based on the EUR/USD January effect, that the January high at 1.1632 basis the continuous back-adjusted contract (currently on March) should not be exceeded if that pattern is to hold this year.

The British Pound, much the focus of Brexit, continues to climb higher and is beginning to move towards a potential change of long-term trend to up. The Commitments of Traders report continues to show massive buying from commercials of the British Pound. For now, the long-term trend remains down.

Interest rate futures

The long bond pierced resistance on Monday but as of yet without followthrough. The RSI remains in the bull range, and the long-term trend is up, Volatility is at extremely low levels, and a significant move is likely to be seen soon. The long-term trend remains up for the sector.

UK Long Gilts are close to their all-time highest level, which means that ten-year interest rates are near their all-time lows.

 

Weekly Update – 17 February 2019 – LS Trader

This Monday is Presidents’ Day in the US, so US markets will be closed, and it will, therefore, be a shortened trading week. Seasonally we are in a bullish time of year for stocks, but the long-term trend remains down.

Elsewhere, the trend remains up for the dollar, metals and interest rate futures, and mixed for the remaining commodities.

Stocks

The Nasdaq 100 is leading stocks to the upside, and the RSI has moved decisively above the 60 level, which is bullish. However, the long-term trend remains down for global stocks.

Commodities

Gold managed to hold just above support and closed very near its highest close in almost ten months. The long-term trend is up for all the metals except for Copper. Copper is, however, within the range of an upside breakout and change of long-term trend to up.

Palladium remains in a monster bull market and posted new all-time highs on Friday, as well as making an all-time closing high. Sentiment remains elevated, but it has been at or near extremes many times since September. The LS Trader system has been long Palladium since the 19th September 2018, and it is by far the most profitable open position at present.

Currencies

The Dollar has had a mixed week, gaining against some majors and declining against others. The Dollar Index itself tested resistance but has been unable to push through. The RSI is also finding resistance at the 60 level. The Euro fell to its lowest level since April 2017, basis the back-adjusted continuous contract, but did see some buying coming in from the low on Friday, with a strong demand tail evident on the daily charts. The RSI is finding support at the 40 level, so last week’s low appears to be a critical support level.

Interest rate futures

Interest rate futures have been unable to break through resistance so far, but remain in long-term uptrends. The UK Long Gilt did break resistance intra-day, but so far without follow-through.

Commitments of Traders reporting data is catching up after the US government shutdown. The data is still a week or so behind, but still shows commercials as net long, indicating further price strength and lower interest rates.