LS Trader Weekly Update – Monday 9th April 2012

The past week has seen stocks finally correct somewhat, something that has been on the cards for the past few weeks. However, the long term trend is still very much up across the stock indexes and each of the indexes we trade remain above their 50 day moving averages and still a long way above their 200 day MAs.

The dollar saw an end to its recent short term weakness as it ended the week higher against all the majors with the exception of the Japanese Yen. The long-term trends are still up for stocks but mixed for the dollar and commodities.

Stocks

The S&P 500 failed to make new highs this past week and has subsequently fallen back below the 1400 level. This suggests that in the short term a top has been put in at 1419.6 on the June futures contract, although Friday did see buyers return at the lows of the day at 137 3, taking the index back to close at 1390.2.

As has been the case for much of the recent rally, the Nasdaq 100 is still the strongest and is still holding up better than the other indexes and still remains above support. As long as that remains the case there has not been a huge change in sentiment and the other indexes could recover, but if the Nasdaq joins the breakdown then that may accelerate the down moves.

As we wrote last week, on a seasonal basis April is a good month but as ever price and trend is far more important than any seasonal indicator or tendency. Looking further ahead, the old adage often applied to stocks of “Sell in May and go away” is only a few weeks away and given the extent of the recent up moves for stocks, a reasonable correction is not out of the question.

Commodities

Last week we wrote “Gold ended the week higher by 0.42% but having had a brief look ab ove the 200 day moving average on Tuesday, where it ran into the $1700 level, ended back below the 200 day MA. The long-term trend is still down and conditions bearish as long as $1700 resistance holds.” $1700 did hold and the market remains in a long term downtrend and below the 200 day MA having fallen to new lows since the First week in January.

Crude ended the week higher by 0.28% and formed a doji on the weekly chart, which represents total indecision. In the longer term the trend is still up but the short term is without direction. Support from the psychological $100 level is still in place but if that level is taken out there is little in the way of support until the 200 day moving average, which currently sits around the $97 level.

Coffee did break though the $1.90 level that we wrote about last week but was unable to push higher and the trend is still down.

Currencies

The dollar index held on to the previous week’s lows on a closing basis (although the lows were briefly taken out intra-day on Tuesday) and this formed a platform for a decent push higher as the market remains above the February low and also above the 200 day MA. The long term trend is still up but the market is currently in the middle of the range that spans from the lows at 7842 and the local top at 8116 (June contract).

The British Pound fell just short of giving a confirmed change of trend to up and reversed this week to remain in the box range that has been in place for quite some time. The long term trend therefore remains down and the market is currently sitting almost exactly on the 200 day MA, which may provide some support.

The Euro was unable to clear $1.34 resistance and this failure led to a move down back towards $1.30, a level that will likely be tested this week. A break of $1.30 would likely see a test of the February lows and failure there may op en the way for a move further down towards $1.2640. The trend remains down.

Interest rate futures

The morning star reversal patterns that formed in the interest rate futures sector 3 weeks ago have proven to be a strong reversal, as they often are, and the 5 & 10 year T notes as well as the 30 year Bonds have continued to advance higher and the long term uptrend which narrowly stayed in place looks to be getting back on track. We may yet see a continuation higher towards the highs of the year.

However, as we wrote last week, should the market eventually break the low of the morning star pattern, which is now a key support area, there could be some large moves lower as such a move would not only break that pattern but also change the long term trend to down.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 2nd April 2012

The past week has seen stocks push on to new highs but then pull back slightly into the weekend. Nevertheless, stocks still ended up having their best first quarter in 14 years, with large gains being seen in the S&P 500, Nasdaq 100 and the Nikkei 225.

Elsewhere we have seen continued short-term weakness for the US dollar, which has continued to decline against most of the majors, but commodities have remained mixed. The long-term trends are still up for stocks but mixed for the dollar and commodities.

Stocks

The S&P 500 did manage another week of gains but did pull back in the latter part of the week having earlier hit new highs. The trend is still very much up and the index has just about managed to close north of the 1400 level. We wrote last week that a close back above 1400 would be bullish and that is what we have seen last week but the market has so far been unable to push on from there.

Typically, the start of new quarters and new months end up being bullish for the first couple of trading days so we may see another go at last week’s highs in the next few days. Additionally, there are some fairly long lower shadows on some of the daily candles and this indicates that the lows are being rejected and that buyers are still stepping in at the lows. On a seasonal basis April is a good month but as ever price and trend is far more important than any seasonal indicator or tendency.

Commodities

Gold ended the week higher by 0.42% but having had a brief look above the 200 day moving average on Tuesday, where it ran into the $1700 level, ended back below the 200 day MA. The long-term trend is still down and conditions bearish as long as $1700 resistance holds.

Crude has fallen to its lowest level in six weeks and has taken out the $104 level on a closing basis that has been acting as support recently. The long term trend is still up but aside for support from the psychological $100 level, there is little in the way of support until the 200 day moving average, which currently sits around the $97 level.

Coffee put in its first up week in eleven weeks but the trend is still clearly down, although a test of the $1.90 resistance area looks likely again in the near future.

Currencies

The dollar index ended the week lower for a third straight week and may continue further down. 7950 was taken out, as was the 7932 level that we wrote about last week so we may now see a test of the February low at 7842 (June contract).

The British Pound has continued with short-term strength and is now looking to break out of the box range that it has been in for the past couple of months to the upside and is now on the verge of a change of long-term trend to up.

Interest rate futures

Interest rate futures rose for the second straight week, continuing higher from the morning star reversal patterns that formed a couple of weeks ago, which continue to provide support. The long-term trend is still up across the sector, and with the expectation increasing that “Helicopter Ben” will start the printing press running again with more QE3 in the not too distant future, yields may continue their recent decline, sending prices higher once more.

However, should the market eventually break the low of the morning star pattern, which is now a key support area, there could be some large moves lower.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 26th March 2012

The past week has seen stocks continue to stall, following on from the loss of momentum seen the week earlier. Of the 4 stock indexes that we trade at LS Trader, only the Nasdaq ended the week ahead and this week saw the Nasdaq 100 hit a new 11 year high.

Last week we wrote “Contrary to popular opinion, doji are not reversal signals in and of themselves but more an indication that the bullishness has lost a bit of momentum and are often just the markets pausing for breath before continuing higher. That said, they do present a possible warning for the short term.” As mentioned above, these doji have so far translated into some small short term weakness and there are now similar formations on the Nasdaq 100 daily chart.

Stocks

The warnings that we wrote about for stocks and the S&P 500 last week did lead to a down week but not by much. The S&P 500 retreated 0.31% for the week but the spinning top that has formed on the weekly charts could once again be a further potential warning of more weakness ahead in the short term. However, the trends, both long and short term are still up and these factors are more important than the loss of momentum until there is confirmation of a down move, which as yet we do not have. The 1400 level was taken out but the market has been unable to make a weekly close above that leve so far. A weekly close above 1400 would be bullish.

We wrote last week that a correction was due on the Dax and we did see that with a weekly decline of 2.12%. As with the other indexes though the trend is still up and as long as short term support holds (on a closing basis the 7000 level is still holding) then the upside target at 7680 is still in play.

Commodities

Gold ended the week below the 200 day moving average once again but buyers did come back in at $1627 and the market may now continue higher to test the 200 day MA. The trend however remains down.

Continuing its major downtrend is Coffee, which this week completed a 10th consecutive down week. There was a semblance of buying on Friday but the trend is still clearly down.From the energy sector, the only gainer was No Leaded Gas, which pushed through resistance intra day to reach its highest level since July 08. However, there was a bit of profit taking on Friday, which has taken the market down to close right on a support level from prior highs. If the trend is good the prior highs should provide support and lead to a continuation higher, otherwise we may see some short term weakness.

Currencies

The dollar index ended the week lower for a second straight week and may continue further down. 7950 did get taken out in tra day but held on a closing basis. A close below 7950, or more precisely last week’s low at 7932 would be bearish short term and would likely lead to a test of the February low at 7842.

Interest rate futures

We wrote last week “There are many hedge funds that are itching to short interest rate futures so if last week’s lows do get taken out we could see further selling pressure. For now though the long term trends are still up.” The prior week’s lows did hold, albeit only just, but this did lead to a formation of quite a strong reversal on a couple of the markets, a morning doji star formed on both the 5 & 10 year T notes. The morning doji star is quite a strong reversal pattern so short term strength may continue. However, this makes the low of the pattern a very key support point and if support there fails there could be some large moves lower.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 19th March 2012

The past week has been another bullish week for stocks but the initial bullishness did wear off a bit by the end of the week, as evidenced by the smaller bodied candles/northern dojis. Contrary to popular opinion, dojis are not reversal signals in and of themselves but more an indication that the bullishness has lost a bit of momentum and are often just the markets pausing for breath before continuing higher. That said, they do present a possible warning for the short term.

Bullishness in stocks has translated as it often does to dollar weakness, and although the dollar began the week in quite a strong fashion that developed into weakness by the end of the week. Therefore is the same old story with the trends being up for stocks and mixed for the dollar and commodities.

Stocks

As covered in the introduction, stocks have continued in bullish fashion but some warnings are present in the short term that a possible loss of momentum is upon us. Not really surprising considering the extent of recent moves higher and the fact that the June S&P 500 is now banging its head against the 1400 level.

The other indexes also look good in spite of similar hesitation patterns forming as the Dax advanced 3.85% for the week. The 2011 high at 7680 will be a longer term upside target now that the Dax appears to have firmly closed above 7000. However, a correction is due and we may see some weakness before that target is reached, if indeed it is in this current uptrend.

Commodities

Soybeans have continued their bull run, this week advancing by 2.76%. The upside target remains at 1450 for beans and this past week has also seen bean oil and meal following along nicely, with meal being the most bullish of the sector.

Gold ended the week down by 3.25% and continues the long-term downtrend. This past week saw the yellow metal move once again below the often watched 200 day moving average. Copper fared better, advancing by 0.51% for the week and still remains in a long term uptrend with a test of 40000 being the critical level.

Currencies

The dollar index ended the week lower by 0.51% having earlier made an upside breakout that eventually reversed. The trend for the index is still up as it is for the dollar against a few of the major currencies.

The Aussie dollar fell to a 7 week low against the dollar but then made a recovery, forming a nice hammer pattern on the weekly chart and we also saw a similar pattern of trading for the kiwi. The Canadian dollar continues to be the weakest of the 3 commodity currencies and is still in a long term downtrend whereas the trend for the other 2 is still up.

In spite of a bit of a pause from weakness towards the tail end of the week, the Yen continues to be the whipping boy of the currency markets, having declined for a seventh straight week, this past week declining by a further 1.01%. Resistance has appeared at 8400 but if that can be cleared then our target at 8500 is still on the cards.

Both the Euro and the Pound advanced for the week against the dollar but the trend is still down for both markets.

Interest rate futures

We wrote last week “We may see some decent moves lower should those support levels eventually give way”. We were referring to the medium term support levels that have held the interest rate futures markets up very well of late. This week those support levels were tested and support failed, leading to quite a dramatic sell off, which in the case of the 30 year T Bonds, this mean a weekly decline of 2.76%. There are many h edge funds that are itching to short interest rate futures so if last week’s lows do get taken out we could see further selling pressure. For now though the long term trends are still up.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 12th March 2012

The past week has been quite a volatile one with some large moves seen in stocks, commodities and currencies. Much of the losses incurred by these declines were almost completely erased by the end of the week and some markets made a complete recovery and actually ended the week higher.

Long-term trends are still up for stocks and still mixed for the dollar and commodities.

Stocks

We wrote last week that momentum on the S&P 500 may be running out of steam and right on cue weakness came in to the market, taking the market out of the recent bull channel and bring to an end the recent rally. The correction was however short lived and the S&P 500 made almost a complete recovery by the end of the week and is now only a few points off recent highs.

The Nasdaq 100 was not immune to early weakness but it did make a complete recovery and even went on to make new highs, albeit narrowly, and completed a tenth straight week of gains. However, in spite of making new highs and a new high close it’s not all bullish for the Nasdaq as there is a formation of a dragonly doji/hanging man pattern on the weekly charts, which is a bearish sign for the short term. It would not therefore be surprising to see a new test of last week’s lows in the not too distant future.

Commodities

April Crude moved around a bit during the week but did end up with an advance of 0.66%. Upside resistance is in at the local top at $110.55 but if the market can reach and clear that we would be looking at a further rise towards last year’s highs at $114.

Soybeans continued in bullish fashion until Friday where we saw some weakness. It’s been a very strong move of late so some selling pressure is not all that unusual and an further rise towards 1450 is still a possibility but we may see some further weakness in the short term prior to that.

Metals all ended the week lower but the whole sector had been significantly lower earlier in the week and the weekly charts show long lower shadows on many of the metal charts, which is bullish. The trend remains mixed for metals with the long term trends being up for some but still down for gold. Gold is currently grappling with the 200 day moving average but a move above 1800 will be required for a confirmed change of trend to up.

Currencies

The dollar index advanced for the second consecutive week, this time gaining 0.78%. This move was once again facilitated by advances against the ended the Euro, Pound and Japanese yen. We wrote last week that we were still looking for a move higher to 8200 in the USD/JPY and that should that level be taken out that 8500 would come into focus a nd that is the case now since 8200 resistance was cleared on Friday.

Respective resistance levels at $1.35 and $1.60 for the Euro and the Pound continue to look like a short term top and the failure to take out those levels has pressured both markets lower and downside breakouts look to be on the cards for both markets, with a $1.52 target for the Pound and $1.27 for the Euro.

Interest rate futures

Interest rate futures all ended the week lower but all continue to hold on to medium term support. The 5 year note formed a hammer pattern at support, which is a bullish reversal pattern, indicating buyers are trying to hammer out a bottom and push prices higher once again. As we wrote last week, we may see some decent moves lower should those support levels eventually give way but for now a continuation towards the higher end of the recent ranges looks more likely.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 5th March 2012

The past week has seen stock indexes continue to climb higher but there are signs that momentum may be beginning to wane. The dollar has also advanced for the week overall and commodities have been mixed. With a few exceptions volatility is at much lower levels than it has been for much of the past 2-3 years and many markets are trending well.

Long-term trends are up for stocks and mixed for the dollar and for commodities.

Stocks

The S&P 500 advanced by 0.40% for the week and the trend is clearly still up. However, there are signs that the momentum may be running out of steam. The bull channel that we have been writing about for several weeks is just about holding on a closing basis but the market is right on that lower trendline as of Friday’s close. If the lower level holds then we may yet see a move back towards t he top of the channel and the 1385 target.

The Nasdaq 100 continues to lead the way as far as the indexes are concerned with this past week being the ninth straight up week, for a weekly gain of 1.61%. The weekly chart still looks bullish but the daily charts are showing some indecision with a northern doji printed on Friday.

Commodities

April Crude cleared $110 on Thursday before pulling back on Friday but the trend remains up and it was a similar story for heating oil and no leaded gas. The trend remains up for all three markets at present but it remains to be seen as to whether last week’s weakness translates to a stronger pull back. Last week’s highs in all three markets will be the resistance levels that will need to be cleared.

Last week we wrote about the indecision that was present in gold and that was clearly resolved this past week with a steep sell off on Wednesday, whi ch took the market easily through he $1765 support area. The long term trend remains down but last week’s lows may provide support, as may the 200 day moving average which currently sits at $1765. Silver ended up sharply lower also on Wednesday but the trend still remains up.

Soybeans had a very bullish week, moving ahead 3.59% for the week for a third consecutive week of gains. The soybeans chart still looks bullish with little in the way of resistance between current levels and the September highs around 1450.

Currencies

The dollar index ended the week higher by 1.35% helped mainly by gains against the Euro, Pound and Japanese yen. We wrote last week that we were looking for a move higher to 8200 in the USD/JPY pairing and that level was almost reached this last week. If that resistance level can be cleared there is little in the charts by way of resistance until around the 8500 level.

Both the Euro and the Pound made sharp reversals lower having been rejected at $1.35 and $1.61 respectively. The long-term trend remains down for both of these currencies and lower prices may be ahead.

Interest rate futures

Interest rate futures continue to hold on to medium term support and both the 5 & 10 year notes advanced but the longer term 30 year bonds ended slightly lower. The long-term trend is still up across the sector and these markets must still be considered bullish as long as medium term support holds. We may however see some decent moves lower should those support levels eventually give way but for now a continuation towards the higher end of the recent ranges looks more likely.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 27th February 2012

The past week has seen stock indexes continue to climb higher, in some cases to new multi-year highs. We have also on balance seen the dollar continue recent weakness and commodities advance.

Long-term trends are up for stocks and are heading that way for commodities. The trend for the dollar is up on balance but may be changing soon.

Stocks

Friday’s high on the S&P 500 was the highest level seen since May 2008 and as we wrote last week this gives us our next target at 1385. We wrote a couple of week’s ago about the importance of the lower support from the bull channel holding and it did again this week, bouncing directly off it on Thursday before pushing to new highs. just about this week, and new highs for the year followed.

The Dax hit another new high since August and ended the week ahead by 0.37%. As was the case with the S&P 500 and with the prior week, the Dax continues to find support from the trendline that has held since December last year. Each decline towards the trendline is being met with buying.

The trend for stock indexes remains up across the board and we may yet see new highs, especially if these markets remain in the bull channels. However, although the Dow and Nasdaq 100 have cleared their 2008 highs, the S&P 500 has not and as we have written many times before, the S&P 500 is the most important of the indexes so the 1385 level will be an important level to watch as failure there will likely put the brakes on the other indexes.

Commodities

Crude oil remains in a highly bullish trend and looks to be heading towards last year’s highs around $114. The current chart shows no sign as yet of a reversal and there is nothing in the chart to suggest that the market won’ t reach that level, aside from the fact that the market is possibly a little overextended in the short term. The weekly advance for Crude was an impressive 5.96%. No leaded gas and heating oil are also on a bullish run and are following crude higher.

Gold advanced 2.93% for the week, forming a bullish candle on the weekly charts but that does not perhaps tell the full story as the last 3 trading days of the week were spinning tops and Friday was a down day. This is why the Japanese Candlestick traders counselled against using candles on weekly charts, and only using daily charts, as much of the message can be lost on a weekly chart. That said, the recent highs around $1765 may now provide some support due to change of polarity where prior resistance becomes support.

Currencies

The dollar index ended the week lower by 1.33% and now looks to be heading lower to the 7800 level and the 200 d ay moving average. For now the long term trend is up overall for the dollar but with much more continued weakness that may change soon.

The British Pound continues to trade within the box range between $1.56 and $1.59. A break of either level may give rise to a decent move but for now the trend is down. For the box range to continue, resistance around $1.59 needs to hold to send the pound lower again. The Pound had a good week against the Yen, giving a confirmed change of trend to up for the first time since July last year.

For the second week running one of the big moves of the week was in USD/JPY, with a 1.93% gain for the dollar. This has taken the dollar back above the 8000 level, which suggests a continuation higher towards 8200.

Interest rate futures

Interest rate futures headed lower and tested medium term support as expected, which held once again, leaving futures slightly ahead for the week. The long-term trend still remains up for the sector.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 20th February 2012

The past week has seen stocks reach and move above our long-standing target of 1355 on the S&P 500 and U.S. stocks have now all but erased their losses since June 2008. The trend remains up for stocks with indexes either at or near multi year highs (the Dow 30 hit a 4 year highs this past week and the Nasdaq 100 reached its highest level since 2001).

Considering the above the dollar has held up quite well and with the exception of against the Australian and New Zealand dollars, still remains in a long term uptrend.

Stocks

For the past several weeks we have been writing about our 1355 target on the March S&P 500 and it was finally reached and cleared this week and we now have new targets at 1385. We wrote last week about the importance of the lower support from the bull channel holding and it did just about this w eek, and new highs for the year followed.

The Dax also moved higher, reaching its highest level since August and continues to find support from the trendline that has held since December last year. Each decline towards the trendline is being met with buying and this week was no exception as Thursday’s lows bounced exactly off this trendline, propelling the market to new highs on Friday. This week also saw a change of long term trend to up for the Nikkei, so the trend is now up across the board for all the indexes we trade at LS Trader.

Commodities

Last week we wrote on Crude “The market remains above the 200 day moving average and the trend is still up so an upside breakout remains more likely” and we did see a breakout to the upside. April Crude reached its highest level since September last year and the trend remains up. Heating oil and No leaded gas followed Crude higher and gasoline is now moving towards last year’s highs and we may see those levels tested this week.

We have a third consecutive doji on the weekly chart on Gold so indecision in this market is very much the current status. Buyers are so far coming in just above $1700 but if that level fails we may see a move lower towards the 200 day moving average and support around $1650. The long-term trend still remains down and resistance is still in place at $1770 on the April contract.

Currencies

The dollar index ended the week higher by 0.29% and does appear to have formed some decent short-term support around 7850 with support provided by the stick sandwich pattern and the bullish engulfing pattern that we wrote about last week. The long-term trend remains up for the dollar overall but is down against the Aussie and New Zealand dollars.

The British Pound did not quite make it as far down as $1.56 and t he 50 day moving average but did make quite a strong recovery on Thursday and Friday. Resistance is still in place at the 200 day moving average around $1.59 and that may be tested this week.

Big move of the week came as the Yen declined against the dollar by 2.41% for the week, a move that saw the dollar push above the 200 day moving average for the first time since April last year. More significant than that though was the break above the highs formed on the 31st October last year. The trend is now up for the USD/JPY.

Interest rate futures

Interest rate futures ended the week lower and the uptrend may be coming to an end, at least for the near term. Longer term markets are holding up slightly better than the shorter-term markets and medium term support is still holding. Those support levels may be tested this week.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 13th February 2012

The past week has seen stocks and the dollar end the week relatively flat although stocks did rise to new highs for the year. The trend for the dollar remains up overall and commodities remain mixed.

Stocks

For the past several weeks we have been writing about our 1355 target on the March S&P 500 and this past week saw the market rise to 1352.3 before pulling back to close the week at 1340.6. This resulted in a small gain for the week of 0.11%. In spite of the small correction towards the end of the trading week, the S&P 500 remains in a bull channel and the trend is still up. The bottom of the bull channel is currently around 1325 and it will be interesting to see if that lower support line of the channel is hit this week and if it once again hits support.

Last week we wrote that resistance at 1355 can be expect ed but if it can be taken out we could see a move to the next target at 1385, and that still applies, especially of support at the bottom of the channel holds.

Commodities

Crude ended the week ahead but remains within the box range that it has been in for the past several weeks. The market remains above the 200 day moving average and the trend is still up so an upside breakout remains more likely although this would change on a break below $95.

Gold ended the week lower by higher by 0.86%. Last week we wrote that in spite of recent strength Gold was showing signs of a possible turn. We also wrote “The weekly bars show a doji, which at resistance can be a prelude to a turn, but the stronger signal comes on the daily charts where there is a large bearish engulfing pattern. This could lead to a move lower.” So far the move lower has been reasonably well contained but the long term trend doe s remain down. On the April contract there is resistance around $1770 but the next level of support is not until $1650.

Grains are not doing a great deal and the trend remains down. Most of the grains markets are showing numerous doji candles, which represent indecision. A break to the downside continues to look more likely.

Currencies

The dollar index did briefly fall through a short term support level but had regained it by the end of the week. Medium term support at 7800 is still holding so the medium term trend is still up for the indexs as is the long term trend. On the daily charts there was a stick sandwich support pattern followed by a bullish engulfing pattern on Friday so there is certainly some buying pressure coming in around 7850.

Last week we wrote that the British Pound looked to be heading for the 200 day moving average, at that point around $1.59, and that is exac tly where the pound reached before reversing and making a move lower. The trend remains down for the Pound and it may now be heading down towards the 50 day moving average around $1.56.

Interest rate futures

Interest rate futures ended the week pretty much flat but all of the markets had been lower earlier in the week. All of the markets did hold at short term support and the trend remains up across the sector.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 6th February 2012

It’s been another week or risk on, which has seen stocks continue in bullish mode and the dollar continue its recent weakness. The trend continues to be up for stocks and is still up overall for the dollar but that may be going to change. Commodities for the most part have continued to benefit from dollar weakness.

Stocks

January ended the month up, which according to the January Barometer means that there is a good chance of stocks ending the year higher. At present things are continuing in a bullish fashion and risk-on remains the primary strategy for traders.

We have been writing about the likely target of 1355 on the S&P 500 March contract and that still looks to be the likely destination. Resistance at 1355 can be expected but if it can be taken out we could see a move to the next target at 1385. We will review from there if and when that target is reached.

The Nasdaq 100 once again continues to lead the way, which as we wrote last week is generally the most bullish set up. The Nasdaq 100 is now approaching 11 year highs. The Dax is also moving higher having recently changed long-term trend to up. Of all the indexes that we trade at LS Trader, the Nikkei is the weakest and still in a long-term downtrend. Whether that changes or not remains to be seen.

Commodities

Crude found support on from the 200 day moving average but still ended the week lower by 1.73%, ending the week once again below the $100 level. If support at $95 fails then a move to $93 will likely follow.

Gold ended the week higher by 0.33% but is showing signs of a possible turn. The weekly bars show a doji, which at resistance can be a prelude to a turn, but the stronger signal comes on the daily charts where there is a lar ge bearish engulfing pattern. This could lead to a move lower. If however, the market can close above the bearish engulfing pattern we may see a move higher towards $1800. For now the trend is still down for Gold. We have similar action on silver, but the reversal pattern on gold looks stronger.

Currencies

The risk-on move has continued, as has dollar weakness. The dollar index though ended the week flat and has so far not fallen to the next support level at 7800. There are a series of lower shadows on the daily candles, which suggest some buying coming in around the lows of last week.

Last week we wrote about the ultimate risk-on currency, the Australian dollar and said that close on its heels was the New Zealand dollar. Both of these currencies continued higher and these are the first 2 markets to give a change of trend to up. The third commodity currency is the Canadian dollar and tha t may be the next to give a change of trend.

The pound has also continued its good run and may be heading for the 200 day moving average, currently around $1.59.

Interest rate futures

Interest rate futures continued to climb higher until Friday, where having made new highs initially, heavy selling followed. The trend is still up across the sector.

Kind Regards

Robert Stewart