Weekly Update – 9 August 2020 – LS Trader

Stocks

From last week on the Nasdaq 100, “The market continued its rally from the spring pattern printed during the prior week but has not yet completed the recovery to print a new all-time high. We may see that this week.” The Nasdaq 100 did complete the recovery and broke out to new all-time highs once again. The S&P 500 also completed a breakout and change of long-term trend back to up but remains below its all-time high.

Commodities

Gold and Silver have both continued their sharp rise this week, until Friday, where both markets experienced sharp reversals. The trend remains up for both, but as we have written in recent weeks, volatility is extremely elevated and likely at unsustainable levels short-term. The trend is up and is expected to remain so for the foreseeable future, but a correction back to fair value is probable.

Currencies

The Dollar has had a mixed week. The rally that began with a bullish engulfing pattern on the prior Friday fizzled out quickly, and the market came back down to test that previous week’s low. Friday again saw a bullish candle, so the index is trying to bottom. For now, the trend remains against the Dollar.

Interest rate futures

Interest rate futures made new highs for the current move but ended the week slightly lower. They continue to trade in a shallow volatility environment. The trend remains up.

Weekly Update – 2 August 2020 – LS Trader

Stocks

The S&P 500 ended July with an all-time high close but remains below its all-time high posted back in February.

From last week on the Nasdaq 100 “Friday did see some buying come in to close the market off the lows with a spring. The trend remains up.” The market continued its rally from the spring pattern printed during the prior week but has not yet completed the recovery to print a new all-time high. We may see that this week.

Commodities

From last week: “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.”

Silver began the week with strength to reach an even higher volatility extreme than was seen the prior week, followed by a large long-legged doji-style candle on Tuesday. The market has since consolidated within Tuesday’s wide range.

Gold crossed the $2000 level for the first time in history and made a new all-time high close. However, price closed $20 off the high of the day. As with Silver, Gold is at elevated volatility levels.

Currencies

From last week “The long-term trend is now down for the dollar against all majors except the British Pound.”

The Dollar has seen continued weakness across the board but did print a bullish engulfing pattern on Friday from a position of elevated volatility. We may see some corrective rally from here, but the trend remains down.

Interest rate futures

Also from last week “Interest rates futures continue to grind gradually higher in a very low volatility environment, with a slight upward bias…However, the price action is far from compelling.” Interest rate futures have made the long-anticipated breakout and continue to grind very slowly higher. The trend remains up across the board.

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.

Weekly Update – 27 June 2020 – LS Trader

Stocks

The Nasdaq 100 broke out to new all-time highs on Tuesday but has been unable to hold on to those gains and has pulled back towards the prior February highs. The February highs, which previously acted as resistance, may now provide support. Weakness below that support level will indicate probable further declines.

The S&P 500 and other global stock indices continue to lag the Nasdaq 100, and they remain in long-term downtrends. Downside breakouts to resume the long-term downtrend are within range.

Commodities

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.

Crude Oil tested the 50% retracement level of the decline from January to the April low and has been unable to make progress. The area above current prices includes the large gap down on the 9th March, which remains unfilled and is likely to provide further resistance if we get an additional rally. Despite the rally in the energy markets, the long-term trend remains down across the board.

Currencies

The currency markets remain mixed, with the long-term trend still up for the Dollar index, but down for the dollar against the Australian dollar, Japanese Yen, and Swiss Franc. There are some currency breakouts in range this week.

Interest rate futures

Interest rate futures have rallied up to the top of their ranges and look set to test resistance at the upper boundary of the rectangles that have been in place since March. With the current low levels of volatility and the length of the consolidation, any breakouts have potential to yield decent-sized moves.

Weekly Update – 21 June 2020 – LS Trader

Stocks

The Nasdaq 100 continued lower on Monday, breaking short-term support in the process. The market then reversed and moved higher to test the prior all-time high. So far, the market has been unable to break through resistance. The rally this past week has been on declining volume and volatility.

The S&P 500 and other global indexes remain weaker than the Nasdaq 100, leaving a bearish non-confirmation in place. Currently, of the global indexes, only the Nasdaq 100 is in a long-term uptrend.

Commodities

The commodity markets remain quiet as many markets continue to undergo volatility compression. Multiple markets, such as Gold, continue to trade in rangebound consolidations. The pressure is building for the eventual breakouts. Breakouts from consolidations usually go in the direction of the prior trend. In the case of Gold, that suggests an upside breakout.

Currently, the LS Trader system is flat all metals and energy markets. The energy markets continue to recover from their rout earlier in the year. Crude Oil traded at a high of 72.50 on the 8th January, before declining all the way down to the mid-April low at 8.17. (prices as per the back-adjusted continuous contract). This week, Crude reached the 50% retracement level of the decline from the January high on Friday.

Currencies

The long-term trend remains up for the Dollar Index. The index continues to recover from the recent sell-off, which led to a volatility extreme. We may see a test of the 200-day and 50-day moving averages this week.

Interest rate futures

Interest rate futures remain in long-term uptrends but continue to trade within the trading range that has been in place since March.

Weekly Update – 14 June 2020 – LS Trader

Stocks

The Nasdaq 100 continued to make new highs through to Wednesday. Thursday saw a sharp one-day reversal, which took the market back below the change of polarity from the February all-time high. Friday printed a long-legged doji, which is an indecision pattern. Bulls have so far defended the index at fair value. The trend remains up.

Divergence continues between the Nasdaq 100 and S&P 500, which remains well short of its all-time highs printed in February. The S&P 500 also saw weakness this week but remains in a long-term downtrend. For now, the only stock index of the four we trade at LS Trader in a long-term uptrend is the Nasdaq 100.

Commodities

Gold ended the week higher, regaining the 50-day moving average and moving back into the prior range. The long-term trend remains up.

One of the big movers recently has been Rough Rice. Rice had been in a massive bull market, reaching a high of 23.565 before trading limit down for four days, which took the market back below support, bringing the uptrend to an end.

Currencies

Selling in the Dollar Index reached a volatility extreme and buyers returned during the second half of the week, keeping the long-term trend up. The long-term trend continues to favour the dollar against most of the majors.

Interest rate futures

From last week: “The market finally broke out of the range but did so to the downside. However, for now, at least, the long-term trend is up.” Interest rate futures had a good week, retracing almost all of the prior week’s decline. This has taken the sector back above the 50-day MA and into the previous range. The trend remains up.

Weekly Update – 7 June 2020 – LS Trader

Stocks

The Nasdaq 100 broke out to new all-time highs on Friday and is the first of the global stock indices to complete their recovery. Of potential significance is the fact that the Nasdaq closed above prior resistance of the February high, which is also a weekly closing high. Volatility is at a relatively subdued level for an all-time high, so this rally could still have legs. There will be many market participants who have remained on the sidelines since the February decline, who will be looking for a way to get on board. There will be others that want to fade the breakout. This week could be explosive.

Commodities

Gold had a bad week, closing below its 50-day moving average and the low of the hammer pattern printed two weeks ago. Price ended the week at a 2-month low. The trend remains up.

Currencies

From last week on the Dollar Index: “If last week’s low is taken out, we may see a cascade of selling, potentially down to the March low, which is the next structural level of support.” The Dollar did take out the low and moved sharply lower. Price action on Friday could be stopping action, and a move above Friday’s high may lead to a short-term rally. The long-term trend remains up for now.

Interest rate futures

From last week: “Volatility continues to contract in the interest rate futures markets as price continues to coil. The eventual breakout from this range could be substantial, and it could be to the upside or the downside.” The market finally broke out of the range but did so to the downside. However, for now, at least, the long-term trend is up.