LS Trader Weekly Update 20th August 2012

Stocks have continued to press higher with S&P 500 futures clearing the April high to hit a new high for the year. The Nasdaq 100 has moved to within touching distance of its April high and may break through this week. The dollar remains mixed with the dollar index advancing by just 0.04% this week. The index formed a doji on the weekly chart, which indicates indecision. Commodities also remain mixed.

Stocks

As mentioned above, the S&P 500 did hit new highs for the year on the September futures contract, with the Nasdaq 100 only just behind and threatening to do the same this week.

The biggest advance of the week from the stock indexes came from the Nikkei 225, which advanced 3.25%, to reach a 15-week high. However, the long-term trend is still down for this index and further strength will be required before that changes.

The Dax advanced for a sixth straight week, adding another 1.21% weekly gain to the run. The long-term trend for the Dax is still down but that looks set to change soon and may do so this week.

Commodities

Grains markets have been mixed but have on balance been lower. Wheat ended the week lower by 1.21% but had been much lower earlier. Wheat has since formed a hammer pattern on the weekly charts, which suggests the selling earlier this week may have been overdone and that the bull market may yet resume. Rough Rice ended the week lower by 3.29% but as with Wheat had been considerably lower mid-week before recovering about half of the week’s losses.

Gold is still in a long-term downtrend and ended this week down by 0.21%. As we wrote last week, a break above $1650 may lead to a test of the 200-day moving average and a possible continuation towards the $1700 level.

The energy markets continue to press higher with moves that are still counter to the long-term trend. Continued strength may lead to a change of trend for some of the sector in the not too distant future.

Coffee continued the long-term down trend, declining by 3.63% this week and continues to head for our target around the 15300 level on the December contract.

Currencies

The dollar index ended the week virtually flat and is still clearly undecided on future direction. Support is still in place around 8200 and the long-term trend is still up. The dollar is in fact a mixed bag at present against most of the majors. However, the dollar is rising against the Yen having finally pushed up through resistance at the 200 day moving average. There is potentially plenty of upside in this move if resistance around 8050 can be cleared.

The Canadian dollar still leads the way and continues to push the US dollar down towards our target at the April lows.

The Euro is still being held down by the 50-day moving average and the long-term trend is still very much down and we still expect to see further weakness to take the Euro back down towards the recent 2 year lows.

Interest rate futures

Interest rate futures are beginning to look a bit ugly in the short-term but are still very much in a long-term uptrend. The long-term bull market is still in place and further confirmation will be required to the downside before the trend will change to down. However, many traders have been waiting for this sector to head sharply lower so if longer-term support does get taken out in the next few weeks we could see the downside move gather momentum.

Good trading

Phil Seaton

www.LSTrader.co.uk

LS Trader Weekly Update 13th August 2012

Stocks have continued with recent strength and all four of the stock indexes that we trade at LS Trader have advanced this week, even the two indexes that are in a long-term downtrend, the Nikkei and the Dax. As a general rule the dollar moves in the opposite direction to stocks so the rise in stocks would normally equate to a drop in the dollar, but that has not been seen this week as for the most part the dollar has gone sideways, remaining undecided on future direction.

The long-term trends are still mixed across the different market sectors

Stocks

The S&P 500 continued with recent strength, making new highs for the current move and remaining on target for a test of the year’s highs posted in early April

The Nasdaq 100 advanced 1.87% for the week and still looks set for a test of the year’s highs, although this market remains further back from the highs than the S&P 500.

The Nikkei 225 had the biggest up-move for the week, advancing 2.82%, bringing the downtrend to an end for the short-term. However, the long-term trend is still down and considerable further strength will be required before that changes. The 9200 area looks like the next target to the upside if the rally continues.

The Dax also advanced, for a fifth straight week and also looks as though it may continue to test the highs of the year.

Commodities

Grains markets continued with recent strength with new all time highs being reached on Friday before the markets slipped back again. The drought in the U.S. that is behind these price moves is still very much underway. Reports show that a sixth of this year’s Corn crop has been destroyed just in the month of July, the hottest month on record in the U.S.  Corn actually hit new all time highs on Friday before reversing that move and closing on the low of the day to end the week slightly lower. Following Friday’s pullbacks it remains to be seen whether we have seen the top of these markets. For now the up-trends are very much intact.

Gold remains in a long-term downtrend but has risen this week and is now moving towards the top of the recent trading range. A break above $1650 may lead to a test of the 200 day moving average and a possible continuation towards the $1700 level.

Coffee has broken lower again, continuing weakness from the rounded top formed in July and may head down towards the lows of the year, around the 15300 level on the December contract.

Currencies

The dollar index managed a small gain for the week having recovered from weakness seen on Monday and Tuesday. The long-term trend is up and support looks to be forming around 8200 in the short-term.

The Canadian dollar continues to lead the way, having pushed the U.S. dollar further down away from parity. The April lows still look to be the next target.

The Euro managed to clear the 50-day moving average but was unable to stay above it and push higher. The long-term downtrend remains in place and we may see further weakness down towards the recent 2 year lows.

Interest rate futures

Interest rate futures took out the next level and continued lower before new support was found, enabling the markets to recover much of the week’s losses. As before the long-term uptrend still remains in place and further weakness will be required for a change of trend to down.

Good trading

Phil Seaton

www.LSTrader.co.uk

LS Trader Weekly Update 6th August 2012

The past week has seen an increase in volatility in the currency markets and in the stock indexes. The dollar in particular has made some large swings this past week but has ended the week lower. The long-term trends still mostly favour the dollar but this may be going to shift soon. Stocks recovered initial weakness and rallied to new highs for the current move on Friday. The long-term trend for US stocks remains up.

Stocks

The S&P 500 rallied to new highs for the current move and the highs of the year posted in early April now look to be a realistic target. The Nasdaq 100 also hit new highs for the current move and the target now will be the highs of the year.

The most bullish daily move came from the Dax on Friday, which posted a tall white candle to hit new highs for the current move. The index did run in to resistance around 6890 but will likely have another go at that level this week. If it can clear resistance then 7000 will be the next focus point and possibly the highs of the year around 7200.

The Nikkei has continued to grapple with the 50 day MA and remains the weakest of the indices that we trade at LS Trader. The long-term trend is still down.

Commodities

Gold continues with its sideways consolidation within the $100 box range. As before, a break out of this range may lead to a move of around $100 in the direction of the breakout. The long-term trend is still down.

The energy markets have been mostly bullish, which is counter to the long-term trends, all of which are down with the exception of Natural Gas. The biggest move came from no leaded gas, which advanced 4.8% for the week. No leaded gas continues to lead the sector and will likely be the first market to give a change of trend to up should the current strength continue.

The grains markets remain bullish and are still not that far from the all time high prices that a few of the markets hit a couple of weeks ago.

The largest down move for the week came from Lean Hogs, which ended the week lower by some 6.74% to reach new lows for the October contract.

Currencies

The forex markets have seen a sharp increase in volatility with large daily swings being seen in many markets. On balance the long-term trend still favours the dollar but this is beginning to shift, especially against the commodity based currencies of Canada, Australia and the New Zealand dollar, the latter of which is on the verge of a change of long-term trend to up.

The Euro did press higher, almost exactly to the 50 day moving average as we suggested may happen in last week’s update. The long-term trend is still down.

Interest rate futures

The interest rate futures sector saw further weakness this past week, especially on Friday. However, as we wrote last week the long-term uptrend still remains in place across the sector and further weakness will be required for a change of trend to down.

Good Trading

Phil Seaton

www.LSTrader.co.uk

LS Trader Weekly Update 30th July

Stocks began the week on the back foot, but bottomed on Wednesday and a sharp rally followed, which took the S&P 500 to new highs for the current move. The dollar did the opposite, giving up initial gains from early in the week and ending lower.

The grains markets, which are still in a bull market fell back this week but the trends remain intact.

The long-term trends are still mixed for stocks and commodities but the trends in the currency markets are becoming less clear, but still on balance favouring the U.S. dollar.

Stocks

The S&P 500 pull back early in the week but found support once again just above the 1320 area, which formed a platform for an impressive rally which took the index to new highs for the current move.

The Nasdaq 100 moved in similar fashion but is not quite so bullish as it did not clear recent resistance and has subsequently not made a new high for the current move. The trend remains up for U.S. induces.

The Nikkei is still the weakest but even that managed to advance. Friday’s close was just below the 50 day MA but the momentum looks as though it will take it through the moving average and possibly to the recent highs. The long-term trend is still down.

Commodities

October Gold ended the week ahead by 2.23% but still remains range-bound and in a sideways consolidation that suggests it is building up for a breakout. The range is currently around $100 with support around $1550 and resistance around $1650. A break of either level could be good for a move of around $100 in the direction of the breakout.

We wrote that the grains markets are often very much weather driven so any sign of rain could send prices in to a sharp correction. This week did see some rain and prices corrected but still remain in the long-term uptrend and the bull market is still intact.

Currencies

The dollar index initially cleared our 8400 target but then pulled back to end the week lower by 0.97%. The long-term trends still mostly favour the dollar, with the exceptions being the Pound and the Canadian dollar.

The Australian dollar continues to rise and the trend looks set to change to up. The New Zealand dollar also advanced and that too may be on the verge of a trend change in the not too distant future as the commodity based currencies come back into favour.

The Euro fell to new 2 year lows on Tuesday but then put in a decent recovery, finishing the week ahead by 1.22%. The Euro now looks like it may continue higher towards the 50 day moving average. The long-term trend is still down.

Interest rate futures

We wrote last week that we thought there was limited upside potential in this sector and having clawed up to new all time highs early in the week, Wednesday saw the beginning of some serious selling that culminated in a large down-day on Friday that brought the trend to an end, at least for the short-term. The long-term uptrend still remains in place and further weakness will be required for a change of trend to down.

Good trading

Phil Seaton

LS Trader

LS Trader Weekly Update 16th July 2012

It’s been a mixed week in many markets this past week with the S&P 500 ending the week flat and the currency markets also being mixed. The big moves have once again come from the grains sector where a bull market is in progress and some markets have reached new all time highs. Corn was the biggest mover, advancing by 6.51% for the week.

The long-term trends are still mixed for stocks and commodities but continue to favour the U.S. dollar.

Stocks

The S&P 500 ended the week flat but had been as low as 1320 before mounting a recovery. Friday saw a bullish engulfing pattern form on the daily charts and the weekly charts show a hammer type pattern. This suggests that the lows are being rejected and that last week’s lows at 1320 may now provide support. The trend is still up.

The Nasdaq 100 ended the week lower by 1.23% but once again found support just north of 2500, which continues to be a critical support level. In similar fashion to the S&P 500, the lows were rejected on Thursday, followed by bullish price action on Friday, which took the Nasdaq back above the 50-day moving average. The trend remains up.

Commodities

Gold ended the week ahead by 0.83% but had been considerably lower during the week before some nice bullish price action on Friday where the futures gapped higher at the open and closed above the previous 4 days’ closing prices. As before support remains at $1547 and the long-term trend remains down, but the shorter term action is effectively a sideways move with no clear trend.

Although in the U.K. we’ve had the wettest summer on record so far, in the U.S. they are suffering with heat waves and droughts. This has caused havoc with some of the U.S. crops and has led to a bull market in grains, a bull market that the LS Trader system has caught nicely. One of the great things about trend following is that you don’t need to stay up on or follow the news, as all events are eventually reflected in the price. The price moves in this sector over the past few weeks have been very aggressively bullish. This past week saw both Soybeans and Soybean Meal reach new all time highs and saw Corn limit up during the week.

Currencies

The dollar index did test the 8400 level as we suggested might happen last week but was unable to clear it, closing marginally down for the week. Similarly, the trend overall has been mixed.

The dollar had been advancing almost across the board until Friday, which saw some decent moves for most of the majors against the dollar. The Euro fell once again to new 2 year lows and remains on course for our longer-term downside target at $1.18, which is a level that has held firm since 2005. If the Euro does fall as far as $1.18 it will be a key level to watch for the markets reaction.

The Australian dollar bounced nicely off the 200-day moving average and saw some continuation higher on Friday but the long-term trend is still down. We may see a test of the recent highs at $1.0261 this week.

Overall the long-term trend still favours the dollar against all the majors with the exception of the British Pound.

Interest rate futures

Interest rate futures remain in a strong uptrend and the sector advanced across the board this past week with prices once again approaching new highs as yields fell once again towards record lows. There are signs once again of a lack of conviction in taking these markets higher, reflected by the small real bodies and doji shown on the daily charts. There still appears to be limited upside but that could have been said for much of the past few months but the sector has continued to rise.
Good Trading

Phil Seaton

LS Trader Weekly Update 9th July 2012

The past week has seen the dollar recover from recent short-term weakness and resume the longer-term uptrend, which included pushing the Euro down to 2 year lows. Commodities remain mixed although the long-term trend overall remains down for commodities. Much of the initial strength in commodities markets wore off before the end of the week, with the most bullish moves coming in the grains sector, which continue to benefit from the recent drought. The trend remains mixed for the stock indexes with the U.S. indexes still the strongest.

Stocks

The S&P 500 initially header higher but stalled at 1375 before moving lower again. The index ended the week lower by just 0.34% and the trend is still up. The market may well continue down towards the 1330 area, where the 50-day moving average currently sits. The 1330 area also represen ts a key area, which previously had provided resistance and may now provide support should the index decline that far.

We wrote last week that the Nasdaq 100 may move higher towards resistance at 2626 and that did happen, with a new high for the current move posted at 2656. A doji was formed here which represents indecision, and this was followed by a long black candle on Friday, which completes a 3 day evening star reversal pattern, which suggests that weakness may continue in the short term, although the trend is still bullish. Support may be found roughly mid way through the tall white candle formed on the 29th June, which is approximately at the same level as the 50 day moving average.

Commodities

Gold initially continued with last week’s bullishness but fell just short of the $1640 level that we highlighted last week. From there gold reversed, and may now head lower towards $1547. T he long-term trend remains down.

Crude and the other energy markets also initially continued with the prior week’s bullishness, before retracing much of those gains. The trend still remains down across the sector.The most bullish sector of all at present continues to be the grains, all of which made sharp gains throughout the first half of the week before running out of steam on Friday. The bullishness of the sector from a technical perspective is highlighted by the gaps higher seen on a few of the grains charts.

Currencies

The dollar had a strong 2-day rally to close out the week, advancing from 8189 to 8356 in just 2 days, which is a significant move for the index. This culminated in the highest weekly close for the current move and suggests a test of the 8400 level in the not too distant future. The support area that we highlighted last week may be key was not quite tested and support should still be found around 8140 should the index reverse again.

The British Pound, currently the only major still in a long-term uptrend against the dollar according to our proprietary long-term trend indicators was rejected at the 200-day moving average, which we suggested last week may be tested. From there the Pound headed lower and may now decline towards the recent lows posted on the 1st June, a break of which would give a change of trend to down.

The Euro opened the week higher but then spent pretty much the rest of the week moving lower, ultimately taking out the recent low and falling to its lowest level in 2 years against the dollar. This move opens the door once again to our longer-term downside target at $1.18.

Overall the long-term trend still favours the dollar against all the majors with the exception of the British Pound.

Interest rate futures

Interest rat e futures advanced once again as the seemingly never-ending long-term uptrend continues. The markets continue to hold above the 50 day moving averages and short-term support levels and as long as that remains the case there is a good probability that the recent all time highs in these markets will be tested once again. There is however a limit as to how high these markets can go with yields moving once again back towards all time lows. There will come a point if the uptrend continues where the risk/reward for long positions is not there and that may lead to an unravelling of longs.

Good Trading

Phil Seaton

LS Trader Weekly Update 2nd July 2012

Friday saw some big moves in the markets following events in Europe and some large reversals followed. Up to that point the dollar had been gaining and stocks for the most part had been in retreat. That all changed on Friday as stocks and commodities short higher and the dollar lower. It remains to be seen as to whether this is any more than a one-day move or the beginning of some new trends. The long-term trends are so far unaffected so the odds favour this being just a short-term move but time will tell.

Long-term trends remain mixed for stocks, mostly down for commodities and up for the dollar and bonds.

Stocks

The S&P 500 headed lower initially to support around 1300 and as could be seen by the lower shadows on the daily candles, there was demand around 1300. Friday saw a huge move higher, which took out the rece nt highs and took the market back to resistance at 1360. Friday’s close at 1356.4 on the September contract is a new high close for the current move and that is potentially bullish. 1360 resistance still needs to be cleared. If it can then we may still see a move potentially up to the highs of the year around 1408.

The Nasdaq 100 moved in similar fashion, this time finding support from just over 2500, but falling just short of the recent highs. The target will now be resistance at 2626 on the September contract.

Commodities

Commodities had a highly bullish day on Friday as the dollar collapsed. Metals and energies had big reversal moves, which for most markets were counter to the long-term trend. Gold looked to be heading for the recent lows until Friday’s reversal and may now have another go at the $1640 resistance level. The long-term trend remains down.

Crude advanced 9.36% on Friday having fallen to new 18 month lows on Thursday. Friday’s rally suggests that the downtrend is over for now and that a break of short-term resistance will follow. The long-term trend is still however very much down.

The grains sector had bullish moves, lead by Wheat, which advanced 10.15% for the week, reaching its highest level since September last year. Soybeans also broke out to new highs since 2008, advancing 3.8% for the week. The prior resistance area around 1400 should now provide support.

Currencies

The dollar had been slowing gaining throughout the week until a big reversal on Friday. The dollar index declined 1.51% on Friday and tested the 50-day moving average. The index will likely test key support at 8140 in the coming week. If support there fails the next support level does not come in until 7900.

The Pound had a bullish week, most of the bull move came on Frid ay. The Pound looks set to test the 200 day moving average again this week and the recent highs and just below $1.58. The long-term trend is still up for the Pound, the only market still in an uptrend against the dollar.

The long-term trend is still down on the Euro but Friday’s reversal suggests a test of the 50-day moving average and the recent highs just below $1.28. Overall the long-term trend still favours the dollar.

Interest rate futures

Interest rate futures ended the week pretty flat but had been considerably higher earlier in the week prior to Friday’s sell-off. The long-term trend is still up across the interest rate futures sector and the markets are still holding above short-term support. The 50-day moving average is still in range and is looking like it may be tested. There is good support in the area of the 50-day MA so if the markets do get as low as that a bounce may be expected.

Good Trading

Phil Seaton

LS Trader Weekly Update 25th June 2012

Stocks began the week in bullish fashion but were unable to continue to push higher after initial strength. The dollar saw the inverse of that move and recovered well after initial weakness at the start of the week. The dollar formed a few morning star/evening star reversal patterns which are short-term bullish for the dollar and for the most part the long-term trend still favours the dollar.

Commodities markets remain in a long-term downtrend with energies and metals showing continued weakness.

Stocks

The S&P 500 cleared the 1340 area resistance level and pushed higher initially before running in to resistance around 1360. The index then pushed lower from there and fell back through the prior 1340 resistance level which due to change of polarity should really have acted as support if the market was solid in the short term. This led to a move down to 1317.5 before support was found. The S&P 500 then formed a bullish harami pattern on Friday that suggests that the selling may have run out of momentum. The pre-market futures will give a clearer picture of short-term direction if last week’s lows hold firm. The trend is still up for the S&P 500 and we may yet see a move potentially up to the highs of the year around 1408.

Both the Nasdaq 100 and S&P 500 are still in long-term up-trends. The trend for the Nikkei and Dax is still down, the latter being held down this week by the 50 day moving average.

Commodities

Gold failed once again to clear resistance around $1650 and moved lower. The long-term trend is still down and we may now see a test of the recent lows formed in May at $1529.3 on the August contract. Silver is also approaching a key long-term support level, a break of which may lead to a decent downside move.

US Crude oil fell through support at $81 that we wrote about last week and almost reached our $77 downside target but found some support at $77.56. The trend is still down and $81 may now provide some short-term resistance. Brent Crude has also fallen to 18-month lows as the downtrend for the energy sector continues.

Currencies

It’s been a better week for the dollar following the short-term weakness that has been evident in the couple of prior weeks. This week has seen the dollar index regain the 8200 level having formed a morning star bullish reversal pattern from support at just below 8150. These lows should now provide support and may form a base for the index to move back towards the recent highs at 8400 on the September contract.

Other major currencies have also seen similar reversal patterns, with an evening star forming on the Australian dollar, which took the Aussie back below the 200-day moving average. The long-term trend is still down and last week’s highs should now provide resistance.

The dollar came within a few pips of an upside breakout against the Yen and we may see such a move this week. It seems that the seemingly ever-present threat of the Bank of Japan stepping in to weaken the Yen is supporting the market. The British Pound is also pressing higher against the Yen.

The Euro hit a wall of resistance early in the week and has moved lower during the course of the week and may now move further lower to test the recent lows, the downtrend remaining intact.

Interest rate futures

The long-term trend is still up across the interest rate futures sector and the longer term markets are still holding above short-term support. The 10 year T-note and the 30 year T Bond remain the most bullish but we may see a test of support again this week and a test of the 50 day moving average, which is now coming in to range.
Good Trading

Phil Seaton

LS Trader Weekly Update – Monday 18th June 2012

The past week has seen stock indexes continue to move higher following the bounce from the 200-day moving average seen a couple of weeks or so ago. As was the case during the previous week, the stock index advance has been met with dollar weakness. Some strength in the coming week for U.S stock indexes may see the up-trend resume. Overall the trend for the dollar is up, commodities are still down and stock indexes are mixed.

There are some key events in the week ahead which have the potential to make considerable moves in the markets, such as the outcome of the Greek election and the U.S. Federal (FOMC) meeting on Wednesday.

Stocks

The S&P 500 initially advanced to test the 1340 area that we have been writing about recently as key but was unable to clear it. The index then pulled back but recovered to close the week at the week’s high. This suggests that there may well be sufficient momentum to keep the market moving up through the 1340 level. If the 1340 level can be cleared we may see a move potentially up to the highs of the year around 1408.

A move above the 1340 level on the S&P 500 would be a bullish sign and from a technical perspective the uptrend would be back in progress. Such a move would likely see a move higher for the Nasdaq 100. Both the Nasdaq 100 and S&P 500 are still in long-term up-trends. The trend for the Nikkei and Dax is still down.

Commodities

Gold advanced by 2.31% for the week and may yet reach our target of $1675. The long-term trend is still down.

Crude oil has gone mostly sideways over the past week but is still very much in a long-term downtrend. There are some signs that a short term bottom may be forming around 8100 but some consolidation following the prior sharp decline is not all that unsurprising. If 8100 gives way, the next target is still $77.

The overall trend for commodities is still down with Coffee showing continued weakness. The grains markets were also lower almost across the board. Soybean Meal hit new all time highs but was unable to continue higher and moved back into the range but the trend is still bullish long-term.

Currencies

The dollar index fell through the 8220 level again as the dollar lost ground across the board. This past Friday was quarterly currency expiration so we are now trading the September contracts.

The Euro did clear the prior resistance level that we have been writing about recently but was unable to hold above it. This led to a move lower followed by a recover by the end of the week. The market has now closed with a doji right on the level in question so the Euro can certainly go in either d irection in the short-term.

The British pound, which remains in a long-term uptrend against the dollar broke above the change of polarity resistance level that we have written about previously and may now continue higher towards $1.60.

All the other majors moved higher against the dollar but the long-term trend still favors the dollar against all markets except the Pound. The New Zealand dollar in particular had a good week, advancing by 2.68% and the Aussie also got back above parity with the dollar (the September contract closed at 1.0003) and now looks like it will test the 200 day moving average in the coming week. The long-term trend for both is still down but short-term momentum is up.

Interest rate futures

Interest rate futures were sharply lower on Monday and took out support on the 5 year T-note. The 10 year T note just about held on to support and both markets formed a large hammer pattern on the daily charts, indicating that at least for now the lows are being rejected. The long-term trend is still up across the sector.

Good Trading

Phil Seaton

LS Trader Weekly Update – Monday 11th June 2012

The past week has seen stock indexes recover some of their recent losses with a bounce from the 200-day moving average. As ever we have seen the inverse of the stock indexes move with declines for the dollar. The long term trends are still mostly intact however, and are still up for the dollar, down for commodities and mixed for stock indexes.This week is triple witching on Friday so stock index futures roll out of June into the September contracts. Forex futures also roll on Friday.

Stocks

The S&P 500 fell to new lows for the current move dipped below the 200 day moving average but then bounced higher and has formed a bullish engulfing pattern on the weekly charts. The long-term trend is still therefore up but only just. A break below last week’s lows would change the trend to down. As for the shorter term, the market is s till below resistance from the change of polarity where prior support becomes resistance so needs to push above the 1340-1345 area that we have been writing about the past few weeks in order to be considered bullish.

The Nasdaq 100 is still the strongest of the major indexes and remains above change of polarity support. It also held above the 200 day moving average and also formed a bullish engulfing pattern on the weekly charts. As with the S&P 500, the Nasdaq also finds itself near change of polarity resistance and that resistance area will need to be taken out if this rally is going to continue.

Commodities

The gold rally stalled before reaching $1675 and the reversal took the yellow metal back below the $1600 level that should have acted as support if the market was strong. This suggests that there may be further weakness ahead and that we may yet see another test of the year’s l ows.

The long-term trend for Silver is still up but only just. However, silver continues to find very good support between 2620 and 2700 as evidence by the series of hammers on the weekly charts where the lows are being rejected. Similar price action can be traced back all the way to October so it is clear that this is a key support zone. As long as this support holds then the up trend is still in place and the outlook remains bullish. A break of that support zone may though open the way to considerable downside. One negative for silver though is failure to clear 3000 and the fact that prior resistance did not act as support around 2900. As with gold, this is not normally indicative of a solid market. If either of these markets were solid in the short-term both of those levels should have held.

Crude oil managed a small advance this week, ending the week higher by 1.05% but the trend is still very much down. The past week was in fact the first up week in 6 but it was far from convincing. The longer-term target remains around $77 to the downside.

Currencies

The dollar index fell to just below our 8220 support level before moving higher and recovering some of the week’s losses. The trend is still up and the market has closed back above 8220, ending the week at 8256. Last week’s lows will now be the new support area and the trend remains up as long as those levels hold.

The British Pound just about held on to the long-term uptrend but the shorter-term trend is still down. The prior support level acted as resistance around $1.56 and pushed the Pound lower from there. The range is now between last week’s highs and the lows of the current move. A break of either level could be good for a decent move in the direction of the breakout.

The Euro had similar price action to the Pound and also stalled at a prior change of polarity and has moved low er since. The long-term downtrend is still intact and the targets remain at 12100 and further out as low as 11800.

Interest rate futures

Interest rate futures ended the week lower across the board for the longer-term markets. The weekly charts show dark cloud cover patterns on the 30-year T-bond and the 5 & 10 year T notes. These are bearish reversal patterns and suggest further short-term weakness ahead. However, the long-term trends are still up for the sector and the markets are holding above support. As long as this remains the case, interest rate futures should be considered bullish.t

Good Trading

Phil Seaton