Weekly Update 13 December 2015 – LS Trader

The markets have returned to a more normal state this week following the extremely volatile price swings seen in numerous markets during the previous week. Volatility remains elevated in many markets, but this week has seen some markets trend better than they have in recent weeks.

The long-term trends are still mixed, but remain mostly down for stocks and commodities, up for interest rate futures, and up for the US dollar.

Stocks

The S&P 500 was unable to take out recent highs and moved sharply lower this week. The RSI, which has been unable to move above the key 60 level, turned sharply lower and fell through 40, which puts it back in the bear range. Additionally, the index fell below the 200-day moving average, so we may see lower prices again this week.

The Nasdaq 100 also traded lower this week but remains stronger than the S&P 500. This week saw the tech index trade below its 50-day moving average but remain above its 200-day moving average. The RSI has fallen to test bull market support at 40, which is currently holding, but only just.

The Dax fell further this week, keeping the long-term downtrend intact. The Dax has now shed almost 1200 points in the space of two weeks, which is a big move. The RSI has fallen below the 40 level, returning it to the bear range. Lower prices may be ahead, and we may ultimately see a test of the double bottom around 9300.

Commodities

The energy markets have continued with weakness, with Brent Crude dropping below $40 per barrel for the first time since 2009. Light crude oil remains on target to test its 2009 low, which was at 33.55 basis the futures contracts, printed in February 2009.

Heating oil had a hugely bearish week, declining some 14.66%, which included a 6.49% decline on Friday alone. This has seen the RSI fall to 21.35. Natural gas also had a bearish week, ending lower by 8.97% and printing below the 2.00 level for the first time since April 2012.

Once again, therefore, we see that the energy complex is still the most profitable to trade, as it has been for quite some time, and the LS Trader system is currently sitting on excellent profits by being short four markets in this sector. The exception being the strongest enemy market in the sector, No Lead Gas, where we remain flat. No Lead gas was the only market in the sector that managed a gain this week, having bounced from just above support.

Metals have also seen some weakness with Silver falling to a new low since 2009. The new low in Silver has not been confirmed by Gold. Although resistance held in Gold, the yellow metal remains some $30 above its lows for the year. Regardless, the long-term trend for the metals remains down, as it does for nearly all commodities markets.

Currencies

The US dollar had an excellent week against the Canadian dollar, where it rallied to its highest level since 2004, having narrowly exceeded the 2009 highs.

Overall, the US dollar has seen further weakness following the large moves seen during the previous week. The dollar index fell below last week’s low and the RSI has fallen to test the key 40 level, which is bull market support. Should we see a decisive move below 40, we may see further weakness towards the 200-day moving average, which currently sits at 96.29. For now, the long-term trend is up for the dollar index, as it is also for the dollar against most of the majors.

Interest rate futures

Interest rate futures have seen some strength this week with the sector rising to its highest level in around six weeks. The long-term trends remain mixed in the sector and are still up for the shorter-term markets but down for the long bond.

Good trading

Phil Seaton

LS Trader

Weekly Update – 6 December 2015 – LS Trader

This past week has seen a mixture of decent moves and some highly volatile trading, particularly on Thursday, following the ECB announcement. The markets have since retraced some of those moves, which is particularly the case in the stock markets, and the long-term trends have not been affected. It’s likely that several of the affected markets will completely retrace Thursday’s moves over the coming weeks.

Stocks

The Nasdaq 100 rallied to new highs on Wednesday but then reversed lower in volatile trading. The move to the downside was clearly a knee-jerk reaction, and it was reversed again on Friday and the market recovered back to within touching distance of Wednesday’s multi-year high. It is likely that we will see the tech index rally to new highs this week. It’s worth noting that the Nasdaq 100 is very much within range of rallying to its all-time high print of 4884 back in March 2000.

The S&P 500 once again fell short of new all-time highs and reversed lower. Interestingly, the RSI held firm at 60, and the market was unable to break through. Following almost identical price action to the Nasdaq 100 (save for reaching new highs) the S&P recovered well on Friday. We will likely see major resistance tested this week, both in terms of price and RSI. A breakout would be bullish and would open the way for a year-end rally to new all-time highs.

As has been the case for the past few months, both the Dax and Nikkei continue to lag the U.S. market, and both remain some distance below their highs for the year. The trend for these two indexes is still down and considerable rally over the coming weeks will be required for that to change.

Commodities

In spite of the volatility seen in several markets, the energy markets continued their bear trend. Both Brent and Light Crude Oil fell to new multi-year lows, as did Heating Oil and Natural Gas. RBOB remains the strongest in the sector and is still above its November low. Even dollar weakness was unable to lift energy prices.

The metals were significantly affected by the moves in the currency markets (metals are priced in dollars, as are most commodities, so a weaker dollar tends to support metals and commodities prices in general). All four of the major metals moved higher, but Copper remains the weakest in the sector. Gold rallied to test resistance, which has so far held firm, but due to its proximity to Friday’s close, we will likely see resistance tested early this week.

Currencies

The currency markets had reached new extremes this week, with the dollar index reaching new highs for the current move. The Euro fell to new lows as well before both markets reversed sharply on Thursday. Thursday’s trading in the Euro was the most volatile in five years. However, none of the moves seen have impacted the long-term trends in the currency markets, all of which remain intact for now. The long-term trends, therefore, continue to favour the dollar, although both the New Zealand and Australian dollars are moving within range of key trend-defining levels.

Interest rate futures

The long bond displayed some strength during the first part of the week but then reversed sharply lower on Thursday, printing an evening star bearish reversal in the process. The RSI had earlier moved slightly through the 60 level but was unable to hold. This suggests further weakness ahead.

The other interest rate futures markets are also showing weakness, and we may see both the 5 & 10-year T-Notes complete a change of trend to down over the coming weeks.

Good trading

Phil Seaton

LS Trader

Weekly Update 29 November 2015 – LS Trader

The past week was a shortened trading week due to the Thanksgiving Holiday in the US. The long-term trends remain as before across the market sectors. Commodities, in particular, have been bearish.

Stocks

The S&P 500 exceeded the highs of the previous week but fell short of testing the all-time highs posted earlier this year. The RSI tested the 60 resistance level on the RSI multiple times but has so far been unable to break through. As before, a decisive move through 60 on the RSI would indicate a likely test of the recent all-time highs.

The Nasdaq 100 is in a very similar position to the S&P 500, within touching distance of its recent highs. Here too the RSI continues to trade around the 60 level but the needed decisive break through this range has yet to materialise.

The Dax finished higher this week having reached its highest level since early August. The Dax, however, remains in a long-term downtrend and considerably lower than its US counterparts in relation to its all-time highs. The same is true for the Nikkei.

Commodities

Gold and Silver both fell to new lows for the year, and the long-term trend for the metals sector remains bearish. Gold’s low print was its lowest since early 2010, and Silver dropped to its lowest level in over six years. Copper’s low for the week was its lowest print in six and a half years. Palladium, however, managed to find support just above its recent lows, but still ended the week lower. Each of these metals still has the potential to move lower. Ideally, we’d like to see Palladium and Silver decisively break their respective support levels to assist with the other metals moving lower still.

Currencies

The dollar index finished the week higher, once again rallying to its highest level since April and remains on course for a test of 101.43. The long-term trend remains up, and the RSI is in the bull range. However, the price action is not totally convincing as we have a series of small real bodies on the daily charts, and several have upper and lower shadows, which indicate some indecision in the near-term. The chart pattern is also that of a rising wedge.

The Euro also fell to its lowest level since April and remains on target for the March low at 1.0503. The British Pound, which is normally highly correlated with the Euro, has yet to break to the downside. A test of support looks very likely this week, and there is potential for a decent move lower over the coming weeks.

The biggest move in the currency markets at present is USD/CHF, which this week moved to a multi-year high. There is little in the way of overhead resistance to prevent this market from rallying another few hundred pips higher.

Interest rate futures

The long bond traded slightly higher this week, but price action is far from convincing. Shadows are evident above the daily candles, which indicates that the sellers are taking control near the top of the daily range. The long-term trend remains down, and the RSI is still in the bear range. Unless we see a move above 60 on the RSI, we can expect this market to turn over once again.

Good trading

Phil Seaton

LS Trader

Weekly Update 22 November 2015 – LS Trader

The past week has seen mixed trading in numerous markets. The stock markets traded higher this week, as did the US dollar against most of the major currencies. Commodities markets remain in a long-term bear market, and interest rate futures moved higher.

The long-term trends remain as before and are mixed for stocks and interest rate futures, up for the dollar and down for commodities.

Stocks

The stock markets shrugged off the tragic events in Paris and moved higher this week. Both US indices are within range of testing their recent highs. The S&P 500 gained an impressive 90 points this week, which has taken the RSI back to a test of the 60 level. A decisive move through 60 on the RSI would indicate a likely test of the recent all-time highs.

The Nasdaq 100, which is still the strongest of the four stock indices that we trade at LS Trader, has already seen its RSI move through 60, so there is a good probability of new highs for the index in the coming days.

The Dax and Nikkei continue to lag their US counterparts but are also continuing higher. For now, the long-term trends in both the Dax and the Nikkei remain down, but if strength persists, in what is seasonally a bullish period for stocks, we could see both markets complete a trend change to up between now and the end of the year.

Commodities

Both Copper and Gold dropped to new lows this week. Copper’s low was its lowest print since April 2009, and Gold fell to its lowest level since 2010, which was some eighteen months before it printed its all-time high. Both markets have since bounced a bit higher, but a look at the long-term charts shows clearly how far these markets have fallen. From a technical standpoint, both markets still have potentially further to go.

Silver remains slightly stronger and is trading just above a key low, which is its lowest level since 2009. If this key low can be broken, in a move confirmed by Gold, we could still see lower levels.

Palladium has also found support just above its key support level but remains in a deep bear market. Last week’s lows and the multi-year lows in Silver and Palladium could be key to the metals’ price action over the coming weeks.

Currencies

The dollar index moved above last week’s high to reach its highest level since April and remains on target for further gains towards our target at 101.43

The Euro fell to its lowest level since April and remains on course for further weakness down towards and ultimately below the March 2015 lows.

Interest rate futures

Interest rate futures have seen mixed trading this week as we approach the expiry of the December contract and roll forward to the March contract in the next few days. The long-term trends remain up for four of the five markets that we trade at LS Trader, with only the 30 Year T-Bond in a long-term downtrend.

The long bond has shown some strength in the past couple of weeks, but the trend remains down and the RSI is still in the bear range. A turn lower from not much above current levels will be required to keep the downtrend intact, a view that would be bolstered by the RSI not exceeding the 50-60 bear market resistance zone.

Good trading

Phil Seaton

LS Trader

Weekly Update 15 November 2015 – LS Trader

The past week has seen stocks turn lower once more and has also seen the dollar give back some of its recent gains. The long-term trends are, however, still intact in these markets.

Commodities had a highly active week, and many markets broke out from their recent trading ranges in what could be the start of a strong trending period for many financial markets.

Stocks

The S&P 500 failed to break out to new all-time highs, and this failure to confirm the Nasdaq 100’s rally to new highs contributed to further weakness for the tech index. The long-term trend is up for the Nasdaq 100 but remains down for the S&P 500, Dax and Nikkei. The tragic events in Paris may weigh on stocks once they reopen next week.

The LS Trader system is currently flat the four stock indexes that we trade, but short entries are within range in two of the four indexes should the markets break lower next week.

Commodities

The commodities markets remain in a deep bear market, with only a few exceptions. From all the commodity markets that we trade at LS Trader, only London Cocoa, and Orange Juice are showing signs of strength. OJ this week reached a 16-month high, and London Cocoa has reached its highest level in 4 1/2 years.

The energy markets resumed their long-term downtrends this week as expected. Heating oil has already fallen to a new low for the year and the other markets in the sector don’t look far behind. Natural gas, which has been the weakest market in the sector in recent months, looks like it may test resistance this week having found support at the recent lows.

Metals have also seen further weakness, with copper, silver and palladium all breaking to the downside this week to add to the gold short position. Gold, basis the back adjusted continuous contract, tested it low for the year to date, but so far without follow through.

Copper fell to its lowest level in over six years and still has further room to the downside. Palladium looks set to test and possibly exceed its lows for the year printed back in the summer, and we may also see Silver do the same.

Currencies

The dollar showed some weakness this week as it was unable to build on the gains from recent weeks. However, the long-term trend continues to favour the dollar almost across the board, and we will likely see dollar strength resume over the coming days.

The dollar index corrected slightly lower this week but remains near its highest level in six months. If last week’s high can be exceeded, we should see further gains towards the high of the year at 101.43 and likely beyond. The RSI remains in the bull range, and the long-term trend is up.

It’s the opposite view for the Euro, which is an inversion of the dollar index. Once last week’s lows are exceeded, further weakness down towards and ultimately below the March 2015 lows should be seen.

Interest rate futures

The 30 year T-Bond dropped through the next level of support but has so far been unable to continue lower, and last week’s low now represents key support in this market.

For now the long bond is the only market in the sector that is in a long-term downtrend. Further weakness will be required for the others to follow suit. As of Friday’s close, change of trend levels are some way below current levels.

Good trading

Phil Seaton

LS Trader

Weekly Update 8 November 2015 – LS Trader

The period of choppy, consolidating markets that have dominated most markets for the past few months could now be at an end. Friday saw some key breakouts in several markets and some decisive moves that may be the early stages of some decent trends in several markets.

Stocks

The Nasdaq 100 posted new 15 1/2 year highs this week but as before, the breakout is still unconfirmed by the S&P 500. The S&P 500 came close to testing its all-time high posted earlier in the year but has as yet been unable to break through. The price action of the last few days reflects some indecision and has also seen momentum decline slightly. However, the RSI remains in the bull range.

The Dax has recovered to its highest level since mid-August, and the Nikkei has reached an 11-week high. The long-term trend remains down for both markets, and they continue to lag the US markets.

Commodities

The energy markets have seen some fairly volatile trading, with strength during the first part of the week taking a few energy markets through short-term resistance, before reversing and ending the week lower. We could see the long-term downtrends resume this week.

There were some decent moves seen in the metals section, with Gold, in particular, making a decisive move to the downside, resuming the downtrend in the process. We should now see a test of the July low at a minimum over the next week or so. The other metals have also declined and are close to testing key support levels in the days ahead.

Wheat once again ran into price and RSI resistance, which has kept the trend down. There is price resistance at 531, and the RSI continues to reject the 60 level. If both of these levels can be exceeded, there is potential for a large up move over the coming weeks, with the next level of technical resistance almost $1 higher.

Currencies

There have been numerous key moves in the currency markets this week. The dollar index broke through resistance to complete a change of trend to up; the Euro and British Pound both broke support, changing their respective trends to down, and the dollar broke parity against the Swiss France to reach its highest level since January.

One currency market that we have written about for several weeks, and which we viewed as potentially the key to unlocking the currency and other markets from their long consolidation, was USD/JPY. This week finally saw the two-month box range broken, and this resulted in a big move in this market as well as other related markets. This should result in a period of further dollar strength and large moves in many other markets over the weeks and months ahead.

Interest rate futures

The 30 year T-Bond has been the sole interest rate futures market not to confirm a change of trend to up. Therefore, as expected, it has been the first one to make its move to the downside, having fallen sharply this week. There is support around Friday’s low, which if broken could open the way to further declines towards the year’s lows around the 146.00 mark, so 600+ points below Friday’s close.

For now the long-term trend remains up for other markets in the sector, but that could change over the coming weeks if recent weakness persists.

Good trading

Phil Seaton

LS Trader

Weekly Update 1 November 2015 – LS Trader

The past week has seen the Nasdaq 100 rally briefly to new 15-year highs and has seen the Euro continue its recent decline. Interest rate futures were lower this week, and commodities have seen mixed trading.

Stocks

The Nasdaq 100 completed the recovery and rallied to a new 15-year high this week. However, the index was unable to hold the breakout level on Friday and closed back below prior resistance. The breakout was confined by the RSI, which reached its highest level since November 2014, but has so far been unconfirmed by the S&P 500. Should we see new highs for the Nasdaq 100 over the coming days, confirmed by a breakout on the S&P 500 to new all-time highs, we could see further strength through to year-end. Strength will need to be seen this week, or we will likely see the Nasdaq 100 move lower.

As has been the case for the past couple of months, the Dax and Nikkei lag considerably behind their US counterparts and both indexes remain a considerable distance below their respective highs of the year.

Commodities

Heating Oil dropped to its lowest level since January as the energy markets continued with weakness early in the week. Following the break to new lows, Heating Oil has made a recovery rally, along with the other markets in the energy sector, with the exception of Natural Gas. Natural Gas, which is down 14.64% in a month, dropped to its lowest level since June 2012 on Friday before finishing the week with a strong close. The trend remains down for the entire energy sector in spite of strength seen this week.

Strength has been seen in some commodities, particularly Wheat, which looks set to test a major resistance level in the coming days. The RSI has risen to 60.85, and a decisive move above 60 would suggest further strength and a probable break of resistance.

Sugar has also continued its rally but has run into resistance at 14.80. If this level can be broken, then it could be clear skies above and continued rally towards the next resistance level around 16.50.

Currencies

The Euro fell hard in the middle of the week but recovered some of its losses by Friday’s close. The recovery bounce occurred just above key trend-defining support, which if broken would have changed the trend for the Euro to down.

The dollar index had a similar week, but being the near-perfect inversion of the Euro, moved in the opposite direction up towards trend-defining resistance. For now the long-term trends remain up for the Euro and down for the dollar index, but this could change soon. When it does, we will likely see some large moves in the currency markets, which for the most part, have spent much of this year consolidating. Such breakouts should also give rise to large moves in other markets that are impacted by the dollar, namely commodities.

Another important currency market is USD/JPY, which has been in a box range for over two months now. This week saw resistance tested but not broken, and so far price continues to trade sideways within the box range. An eventual breakout from this box range should also yield a decent move in this and other related markets.

Interest rate futures

Interest rate futures were lower this week, and it’s possible that the top may be in for the sector. The long-term trend is still up for four of the five markets that we trade in this sector, remaining down only for the 30 Year T-Bond. The long bond may test support this week, and if successful, may lead the entire sector lower over the coming weeks.

Good trading

Phil Seaton

LS Trader

Weekly Update 25 October 2015 – LS Trader

The stock markets continue to recover and could be set to test the highs of the year in the coming days. The dollar has seen a large reversal and may be heading higher to test key resistance levels against several of the majors. Commodities remain weak and in long-term downtrends with only a few exceptions

Stocks

From last week: “This week has seen further rally in the S&P 500 and the market is now right back at this key level. The RSI has also moved above 60 for the first time since March. Should we see continued strength this week, confirmed by a higher RSI, we may see a move higher to test the double top.” The S&P 500 has continued higher, and the RSI has risen to its highest level since December. The market has now retraced more than 78.6% of the decline from the all-time high to the August 24th low. It’s common to see a market complete a full retracement once the 78.6% level has been exceeded.

The Nasdaq 100 has been stronger still and broke through the underside of the trend line from the October 14 lows. This, coupled with an RSI up to 69.78 suggest that the Nasdaq will complete the recovery and test its high posted back in July.

The Dax and Nikkei have also rallied, but both remain considerably weaker than the U.S. markets and both require considerable further rally to complete a change of trend to up.

Commodities

Both Gold and Silver have pulled back this week, with Gold pulling back from levels that were approaching a change of trend to up. The failure to break through resistance keeps the trend for both precious metals down. The trend also remains down for Copper and Palladium, in spite of recent strength seen.

Natural Gas did fall to new lows and dropped to its lowest level since June 2012. The long-term trend remains down for the entire energy sector, and we could see new lows for the year in the Crude markets over the coming weeks.

Sugar completed a change of long-term trend to up this week for the first time in tow years, such has been the extent of the recent bear market. However, there has as yet been little in the way of follow-through following the breakout. Last week’s high now becomes a key level for this market, which if taken out could see further rally towards the 17.00 level.

Coffee has put in a huge reversal lower in the direction of the long-term trend, and the RSI has broken back below the 40 level, suggesting new lows lie ahead.

Currencies

The dollar had a sharp reversal this week against most of the majors. The Euro at one stage was lower by just shy of 400 pips and may be set to complete a change of long-term trend back to down in the coming week or so. Should the trend change be completed, we can look for a test of the March low, still 500+ pips below current levels.

The Dollar Index, which is a near perfect inversion of the Euro, rallied to its highest level in nine weeks and may also complete a trend change over the next week or so.

Interest rate futures

Interest rate futures all ended lower this week, and the recent uptrend could be coming to an end. For now, four of the five interest rate futures markets that we trade at LS Trader remain in a long-term uptrend. The 30 Year T-Bond remains the weakest and is still in a downtrend.

Good trading

Phil Seaton

LS Trader

Weekly Update 18 October 2015 – LS Trader

The stock markets have continued their recent recovery, but all remain in long-term downtrends at present. The dollar has continued to weaken and looks like it could be set to resume its downtrend against some of the majors in the coming weeks.

Commodities remain mixed, with strength being seen in the metals sector, but weakness persists elsewhere, such as the energy sector.

Stocks

From last week: “If the S&P 500 moves decisively above this 2015-2020 area, further strength may be seen over the coming weeks, possibly back towards the all-time highs posted earlier in the year.” This week has seen further rally in the S&P 500 and the market is now right back at this key level. The RSI has also moved above 60 for the first time since March. Should we see continued strength this week, confirmed by a higher RSI, we may see a move higher to test the double top.

The Nasdaq 100 is in a similar position but has been stronger than the S&P 500, already moving above the key prior support level. The RSI here has also moved above 60, indicating further strength near-term.

The Dax and Nikkei both remain weaker than their U.S. counterparts and as before look the most likely to break to the downside in the event of renewed weakness. The long-term trend remains down for global stock indices.

Commodities

Both Gold and Silver have continued their recent rallies, and both metals continue to move higher towards key change of long-term trend levels. Gold at present is the leader and could complete the upside breakout in the next week or so. The RSI suggests that further strength lies ahead, and the trend could change for the first time since January.

The energy markets have resumed weakness following their corrective rally of the past month or so and could test key support levels in the next few days. Should these support levels be broken, it is likely that we will see a test of the August lows and quite possibly lower levels still. The technical structure of these markets suggests that we have not seen the bottom in any of these markets yet.

Natural Gas, currently the weakest market in the energy sector, looks set to test its recent low, which if broken will see the market make its lowest print since June 2012. The long-term trend remains down across the board in the energy sector.

Sugar was unable to take out the key level recovery high this week but looks likely to do so this week. Should the breakout be successful, a change of long-term trend to up will be completed.

Currencies

The dollar fell to test a short-term support level against the Yen almost to the pip but reversed higher. This market, as we have mentioned previously, has been a key factor in keeping the currency markets in a tight range. Should last week’s low be taken out we will likely see further weakness to test the August 24th low at a minimum. The RSI remains in the bear range, but a decisive move has yet to be seen.

It’s possible that we could see several currencies breakout against the dollar in the coming week or so, with the dollar index, Yen and Euro all close to testing key levels. Should these levels be broken, then we could be in the early stages of the next leg down for the dollar.

Interest rate futures

The 3 Month Eurodollar, basis the September 2016 contract, rose to a new all-time high on Wednesday but gave back some of its gains by Friday’s close. The long-term trend is clearly up, but short-term support is not much lower than current price levels. Friday’s low tested a very short-term trendline that has so far held.

The long-term trend remains up for all markets in this sector with the exception of the long bond, which continues to lag. However, key levels in this market could be reached if we see strength return to the sector.

Good trading

Phil Seaton

LS Trader

Weekly Update 11 October 2015 – LS Trader

The stock markets have continued with counter-trend rallies, but all four indices that we trade at LS Trader remain in long-term downtrends. The currency markets remain mixed, but dollar weakness is evident against several of the majors in the short-term. Interest rate futures remain in an uptrend, and commodities are mixed. There are a few commodity markets that are showing some early signs of strength, Sugar being one, in particular, but overall the commodities markets are still in a bear market.

Stocks

Stocks have continued to press higher this week. Friday saw the S&P 500 reach its highest level since the 21st August and are now just below the prior support level that held the markets up for several months earlier in the year. This makes last week’s high a very key level as prior support should now be resistance and should provide a barrier to further gains. If the S&P 500 moves decisively above this 2015-2020 area, further strength may be seen over the coming weeks, possibly back towards the all-time highs posted earlier in the year.

The Nasdaq 100 has seen similar price, and it may rally further to test the underside of the long-term trendline, which currently intersects the market around the 4565 level.

The two weakest indices are still the Nikkei and Dax. Both ended the week higher but are clearly still in long-term downtrends. These two indices look likely to be the first to turn lower again should weakness return to global stock markets.

Commodities

Gold and silver have shown continued strength this week, and there are further signs that the bottom may be in for now. Silver, which broke its trendline a few weeks back, has this week seen its RSI move above the key 60 level, which suggests further strength over the coming weeks. Gold, which was stronger on Friday than Silver, reached its highest level since August. Here, the RSI has just crept above the 60 level at 60.48, also indicating further strength over the coming weeks. Whether either of these metals rallies sufficiently to complete a change of trend to up remains to be seen.

Sugar has had another strong week, and the bottom looks to be in on this market. The RSI has reached a very bullish 80.76 this week, and price has rallied to its highest level since mid-May. The long-term trend has been down for Sugar since July 2014, but a change of trend to up looks imminent and may complete this week.

Currencies

The past week has seen some dollar weakness, particularly against the commodity-based currencies of Australia, New Zealand and Canada. The long-term trends are still mixed in the currency markets but remain up for the Euro and down for the dollar index. The dollar index is heading down towards the lower end of the recent range and may fall further to test 92.77, the August low. Such a move would lead to further Euro strength.

The British Pound, already in a downtrend against the dollar, has rallied this week but does look like it may be running out of steam. The RSI has turned over below the 60 level, which keeps it in the bear range. This suggests price weakness may be seen next week.

The most important currency market at present is USD/JPY because it has such an impact on global markets. One of the reasons that many markets have been consolidating is due to the Yen moving sideways in a box range against the dollar. This consolidation has been in place now for almost two months. Once we get a breakout from this range, we should see some large moves in several markets.

Interest rate futures

The long bond was unable to exceed the prior week’s high and traded lower throughout most of the week. This weakness has kept the long-term trend down in this market, which is the only once of the five interest rate futures markets that we trade at LS Trader that is still in a downtrend.

The other markets in the sector were all weaker this week, but they remain in uptrends. Tests of key short-term support levels could be seen this week, and the markets will need to turn higher from near current levels to keep the uptrends intact.

Monday is Columbus Day in the U.S., so the bond market is closed.

Good trading

Phil Seaton

LS Trader