LS Trader Weekly Update – Monday 26th September 2011

In a week that has seen the global financial crisis come to the fore once again, stock indexes failed to clear resistance and headed sharply lower as the dollar moved higher. Commodities were also sharply lower almost across the board and these are trends that are likely to persist for the time being, although nothing ever moves up or down in straight lines and there will always be corrections and bear market rallies along the way.

The long term trend remains down for stocks indexes and is now down for most commodities but is now up for the dollar against nearly all of the majors.

Stocks

In last week’s update we wrote “So far this year the seasonal September weakness has not come to the fore but we may yet see the September selling rear its head. The S&P 500 is currently flat for the month so if the record of being t he worst month of the year for the S&P 500 is going to pan out this year there will have to be some considerable weakness before month end from here. For now it looks as though resistance around 1220 may be tested and the market’s reaction at that level will be a good indicator of short term action.” Short term resistance at 1220 was nearly tested before a steep sell off returned the indexes to bear market territory.

The VIX soared 33.15% for the week, bouncing higher from the support area just above 30 and closed the week out at 41.25 as fear returns to the market.

The Dax did not quite fall to the prior week’s lows at 4971, bottoming for the week at 4980 but we may still see a move towards the next support target around 4600 a bit further out and the trend still remains very much down.

Commodities

Last week we wrote “Further gold weakness has increased the possibility that w e have seen a major top as indicated by the possible double top formation. If dollar strength does resume then this would add further pressure to gold”. The double top pattern was confirmed this week with a breach of the low point between the 2 highs, which in this case was the low of the hammer pattern at $1705. We can therefore subtract the low of $1705 from the high of $1923 to give $218, which when subtracted from the low at $1705 gives a target of $1487 for Gold. For now though the trend remains up for gold although it is down for the other metals in the sector.

Last week we also wrote “Crude continues to grapple with the resistance at $90 that we have been writing about for several weeks and appears as though it may be winding up for a decent move in the not too distant future. The short-term range on Crude therefore still spans some $15, from $75 to $90.” Further failure to clear $90 led to a big move as suggested, a decline of 9.45% for the week. The next targ et will be the $75 and the $70 level, although steeper declines may follow further out.

Currencies

The dollar resumed its recent uptrend and continues to be the beneficiary of the current global financial crisis and its perceived safe haven status, which is somewhat ironic considering that it is effectively a fiat currency. But as we have written many times before, it is only the fact that it is still the world’s reserve currency that it has safe haven status. The other safe haven currencies of Japan and Switzerland are both being devalued by their respective central banks, leaving the dollar as the only viable alternative, and it will likely continue to rise as the global economic crisis deepens over the coming months.

Interest rate futures

The trend remains bullish for interest rate futures but we still may be a pproaching a top. 10 year yields will likely find support around 1.70, which is pretty much the high price point equivalent on the charts seen last week and we may see a move lower from there. We still see interest rate futures as being a likely candidate for a very steep decline over the next few years.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 19th September 2011

Stock indexes had a good week after initial weakness saw them first head lower before making a good recovery. The long term trend however remain down for stocks indexes. The dollar was also lower for the week but had seen some swings in some major pairings before ending lower and the trend remains mixed for commodities.

Stocks

So far this year the seasonal September weakness has not come to the fore but we may yet see the September selling rear its head. The S&P 500 is currently flat for the month so if the record of being the worst month of the year for the S&P 500 is going to pan out this year there will have to be some considerable weakness before month end from here. For now it looks as though resistance around 1220 may be tested and the market’s reaction at that level will be a good indicator of short term action.< br>
The VIX made a sharp weekly decline of 19.57%, which included 5 down days in succession as stocks rose and now finds itself at the major 30 support area.

We wrote last week that the Dax would likely target the obvious round number at 5000 and that we could expect some support around that level and that is exactly what happened. The December contract initially moved as low as 4971 before finding support and ending the week ahead. We may still see a move towards the next support target around 4600 a bit further out and the trend still remains down.

Commodities

Further gold weakness has increased the possibility that we have seen a major top as indicated by the possible double top formation. As we wrote last week this is not confirmed as yet and for it to be an actual double top the low point between the 2 highs must be taken out, which in this case is the low of the hammer pattern j ust above $1700. If dollar strength does resume then this would add further pressure to gold, but for now the yellow metal is just about holding on to the $1800 level and the trend remains up with the market above support.

Crude continues to grapple with the resistance at $90 that we have been writing about for several weeks and appears as though it may be winding up for a decent move in the not too distant future. The short-term range on Crude therefore still spans some $15, from $75 to $90.

Currencies

The dollar ended the week lower having begun the week on strong footing and continuing the recent uptrend from prior weeks. Strength evaporated and the dollar index ended lower by 0.81% having earlier been at its highest level since February.

The Euro was as ever the inverse of the dollar index, having begun the week sharply lower, falling all the way to $1.35 before recovering and ending the week ahead by 0.94%.

The Pound was one of the majors that actually ended the week lower, and fell to its lowest level since early January and now may potentially fall as low as $1.53.

Interest rate futures

Interest rate futures retreated as stocks and riskier assets advanced. The trend is still bullish in the interest rate futures sector but the markets may be headed for a test of short term support. Only the 3 month Eurodollar managed a gain in this sector and that was by a miniscule amount.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 12th September 2011

The past week was a shortened trading week due to the US Labor Day holiday. As we wrote last week, this holiday is often followed by some strength for stock indexes early in the week but that often runs out of steam relatively quickly, and that’s exactly what happened with some strength being seen up to mid-week followed by a continuation of prior weakness.

The past week was an eventful one on several counts due largely to the unprecedented intervention by the Swiss National Bank to weaken and peg their currency and this led to some huge moves in the forex markets, with the US dollar as the prime beneficiary. These moves have begun to shift the long term trend in favour of the US dollar. The long term trends remain down for stocks and mixed for commodities.

Stocks

As we wrote in last week’s update, “September is historic ally the weakest month of the year for stock indexes on a seasonal basis but the month can often start on strong footing after the Labor Day US holiday, which is this Monday. Weakness often gets underway towards the latter part of this coming week and into the following week.’ As mentioned in the introduction, this is exactly how the week panned out, and after a reasonable start to the week the S&P 500 ended lower and may now continue lower towards the recent lows.

We also wrote last week about the German Dax and that we expected the index to continue lower to target the next support level around 5270, and this target was hit and then exceeded as the Dax fell 6.42% for the week. The Dax has now been lower in 6 of the past 7 weeks. The next target will be the obvious round number at 5000, where we can expect some psychological support especially in view of the extent of the recent decline. Further out we may see a move towards the next support target around 4600.


Commodities

Last week wrote that we may see another go at all time highs in the weeks ahead and we did in fact briefly see new all time highs during the past week. New all time highs now stand on the December contract at $1923.7. Following the new all time highs the market did sell off in quite a sharp 2 day move before finding support and moving higher once again.

There is however a possibility of a double top formation on Gold following this recent rejection at very similar levels to the prior high. This is not confirmed as yet and for it to be an actual double top the low point between the 2 highs must be taken out, which in this case is the low of the hammer pattern just above $1700.

Crude has had a couple of attempts at pushing out of the range and has moved briefly above the $90 level but has been unable to stay there and has subsequently moved back within the range. The shor t-term range on Crude therefore still spans some $15, from $75 to $90.

Currencies

The dollar index shot higher over the past week as the Euro and Pound fell and the Swiss Franc made a huge one day move following an unprecedented intervention by the Swiss National Bank to weaken the Franc. In the long run this will be a terrible decision by the SNB as they will ultimately end up buying back all the other currencies that they have bought at a substantial loss that will probably run into the billions. It seems that policy setters around the globe are uniform in the fact that they completely fail to understand economics and the long term impact of their actions. Whilst in the short term this intervention may have the desired effect, in the long run the market is larger and will go where it wants to go.

Interest rate futures


Interest rate futures continue to press higher as yields remain at or near historic lows. The long-term trend remains up across the sector. How much further room there is to the upside remains to be seen but as yet there is little in the way of reversal signals to indicate that the trend is coming to an end.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 5th September 2011

This coming week is a shortened trading week due to the US Labor Day holiday and US markets will therefore be closed. This holiday is often followed by some strength for stock indexes early in the week but that often runs out of steam relatively quickly.

Stocks

We wrote last week that if the S&P 500 could clear 1200 that we may see some further short term strength, and we did. It was however relatively short lived and the S&P 500 came up short of the 1250 level which many may have been looking for it to reach as a minimum. On Thursday we saw a bearish engulfing pattern and continuation lower again on Friday. The weekly charts show a large shooting star patter, which is bearish.

September is the historically the weakest month of the year for stock indexes on a seasonal basis but the month can often start on strong footing after the Labor Day US holiday, which is this Monday. Weakness often gets underway towards the latter part of this coming week and into the following week.

We also wrote last week about the German Dax and it’s continued weakness and further weakness was seen during the past week, which included Friday’s 3.19% decline on the September contract. We continue to target the next support level around 5270.

Commodities

Following the huge volatility and large decline for Gold seen during the previous week, normal service resumed this week and Gold ended the week ahead by 4.43% and we may well see another go at all time highs in the coming weeks, currently at $1917.90 on the December contract, not all that far from Friday’s $1876.9 close. As we wrote last week, the hammer pattern formed on the 25th august should provide good support.

The current short-term range on Crude still spa ns some $15, from $75 to $90 as resistance at $90 just about held this week and Crude moved lower again from Thursday’s highs at $89.90. A break of either level could be good for a decent move in the direction of the breakout. For now the trend remains down.

Currencies

The dollar index gained 1.31% for the week as the index continues to find support from the recent lows around 7350. The index may yet push higher towards the next resistance levels around 7560 but the trend remains down.

The British Pound declined for a second straight week and now looks set to test support from both the recent lows and a long rising trendline on the weekly charts.

Interest rate futures

Interest rate futures rose for the week as yields declined once again. The 10 year note is now close to it’s recent all time high and strong resistance can be expected at current levels. The sector as a whole continues to remain near the highs of the year and the long-term trend remains up across the sector. How much further room there is to the upside remains to be seen.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 29th August 2011

Volatility has remained high once again over the past week, with some large swings seen in stocks and commodities, especially Gold, which made a new all time high and then a steep sell-off followed. The long-term trends remain down for stocks and the dollar and mixed for commodities.

Stocks

Stocks endured another volatile week and continue to have large swings on an almost daily basis. This was epitomised by Friday’s price action surrounding Ben Bernanke’s speech at Jackson Hole, which initially saw stocks decline 2% but then end the day ahead by 1%.

Amidst all the volatility, which still remains at very high levels, the odds are still that we have seen a major top for stocks back in April but if the S&P can decisively move above 1200 we may see some short-term strength. However, the trend is down without question an d downside targets remain at 1076, 1026 and 1000 on the September contract.

As we wrote last week, with the exception of the Nasdaq 100, all of the indexes that we trade at LS Trader have been unable to clear the 2007 highs and this means that on a long-term basis the indexes are making lower highs and this is a bearish set up.

The German Dax continues to be the weakest of the indexes and we’re still looking at the next support target around 5270.

The VIX ended the week substantially lower by over 10% for the week but had earlier been approaching the recent highs seen 3 weeks ago at 48.

Commodities

The main commodity story of the week is Gold, which made 2 records during the past week. The first was the new all time high posted on Tuesday at $1917.90 on the December contract, which was followed by a huge $200+ decline over 3 sessions, before finding support at $1700 and the n moving higher. The daily charts show the formation of a hammer pattern on Thursday, with the low of the hammer just above $1700 and that level may now provide good support.

October Crude Oil clawed back most of the losses from the prior week but still remains in a downtrend and below the $90 resistance area. The current short-term range spans some $15, from $75 to $90. A break of either level could be good for a decent move in the direction of the breakout.

The grains sector had a strong week with gains seen across the board.

Currencies

The dollar index ended the week lower again but did not quite fall to new 17-week lows. The trend remains firmly down for the dollar index as it does for the dollar against most of the majors. The US dollar continued to advance against the Swiss Franc and the recent long-term downtrend appears to be over for the immediate future.

The dolla r did not fare so well elsewhere and was lower against the majority of the majors, including against the Yen, Euro, New Zealand and Australian dollars.

Interest rate futures

Interest rate futures yields pushed marginally higher this week, sending prices lower. Prices however remain near the highs of the year and the long-term trend remains up across the sector.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 22nd August 2011

Volatility has remained high over the past week, which has overall seen continued weakness for stocks and the dollar, as well as several commodities. The exception to that is the metals sector, which has once again seen new all time highs for Gold.

Stocks

It continues to look as though we have seen a major top in the stock markets and prices continue to head lower. We may yet see a test of the prior week’s lows at 1076 and at this stage that looks quite likely. Further below that we have support at 1026 and 1000 on the September contract. There does appear therefore to still be considerable room to the downside on the S&P 500 and the same can be said for the other major indexes.

From a longer term perspective, all of the indexes that we trade at LS Trader were unable to clear the 2007 highs with the exception of the Nasdaq 100. This means that with the exception of the Nasdaq that on a long term basis the indexes are making lower highs and this is a bearish set up. For this reason the Nasdaq 100 remains the most bullish of the indexes.

The German Dax is probably the weakest of the indexes at present as it is the only index that moved below the lows of the prior week and we’re now looking at the next support target around 5270.

We wrote last week about the VIX and the proximity of current volatility to the second quarter of 2010 at 48.20. This week saw the VIX rise to 45.40, which is still a very high reading and reflects a lot of fear present in the markets.

Commodities

Crude oil resumed the downtrend and the October contract declined 3.83% for the week and the $75 level will remain the downside target.

Irrespective of the increased margin requirements imposed by the CME, Gold’s rise c ontinues unabated and Silver has also broken out of the recent range once again, having also been subject to earlier margin increases and the trend for metals overall remains bullish. Gold registered a new all time high at 1881.4 on the December contract on Friday although the market did come considerably off that by Friday’s close. It’s worth noting that on the December contract that Gold opened the month at $1622 and now just 3 weeks later we stand at 1852.2!

Currencies

The dollar index drifted lower once again with the September contract at one stage trading at its lowest level in some 16 weeks and only marginally above the May lows at 7332, which continues to be the next downside target.

The dollar fell to its lowest level against the Japanese yen since the second world war and the markets will certainly be on the lookout for a move from the Bank of Japan this week to weaken the Yen.

Interest rate futures

Interest rate futures continued higher with yields falling to 60 year lows although there are signs on the 10 year T Notes that the market is wavering at these levels as there have been a couple of long higher shadows on the daily bars, which indicate the higher levels being rejected, as well as a doji pattern on Friday’s candle, which although not a reversal pattern in and of itself does reflect indecision and is often a precursor to a reversal. The trend remains up across the sector.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 15th August 2011

It’s been another very dramatic week in the markets, which has once again seen volatility spike higher and seen some of the largest daily swings in the stock indexes. The early panic for stocks sent them tumbling lower but go on to make partial recoveries by the end of the week. The trend continues to be down for stock indexes. The trend also continues to be down for the US dollar and is still mixed for commodities.

Stocks

Over the past couple of weeks we have been writing about the large head and shoulders top formation on the S&P 500 and the likely downside target of 1125. That target was hit and exceeded this week and included a one-day decline of 6.66% for the S&P, which was the largest daily decline since the Lehman collapse in 2008. We then saw the September contract fall to 1076.2 on Tuesday before mounting a rec overy of 4.74%, which was the biggest one-day gain since 2009. Moves of this magnitude are clearly not the norm and volatility may remain high in the short term so we may see further wild swings in the week ahead. The VIX rose to 48 on Monday, which was the highest reading since the second quarter of 2010, and just shy of that high at 48.20. To see higher VIX levels than 48.20 we need to look back all the way to the March 09 highs, which coincided with the March 09 stock market lows.

The trend still remains down for the S&P 500 and we may now have seen a major top in this market at the April highs. Volatility may remain high in the short term so we may see further wild swings in the week ahead.

Commodities

September Crude declined all the way to $75.11, which is the preferred OPEC level of $75. We then saw a strong rally but the black gold was still down for the week and the trend re mains down.

December gold rose to new all time highs this past week, clearing $1800 for the first time. The CME then changed the margin requirements and some selling followed. Irrespective of this the trend is still very much up and the long-term trend still only looks to be heading in one direction.

Currencies

We wrote last week “As a general rule, the dollar comes into favour during times of crisis. This is primarily because it is the world’s reserve currency and is perhaps erroneously viewed as a safe haven.” The dollar benefited early in the week from all of the panic that was evident in many markets and moved higher on its perceived safe haven status. Then dollar strength reversed as the equity markets rallied. The dollar index traded within a relatively tight trading range considering all the volatility elsewhere. The higher risk currencies of Australian, Canada and New Zealand all suffered early in the week but there was some recovery seen by the end of the week.

Interest rate futures

Interest rate futures continued higher early in the week as yields fell to new record lows after the Federal Reserve pledged to keep interest rates at record low levels for another 2 years. Yields did however rise towards the end of the week as an auction of 30 year Treasuries was not well received and prices subsequently fell. The trend however remains up across the sector.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 8th August 2011

In last week’s update we wrote “It is in reality a joke that the US still holds this status as their debt levels are already beyond the point of no return and the fact that the US still holds the triple A rating shows how much of a joke the rating agencies are.” This weekend has seen the S&P downgrade the US from their triple AAA rating for the first time in history. This may have a considerable effect on global markets over the coming months and other rating agencies will likely follow suit and possibly begin downgrading other Countries as well.
It’s been a very dramatic week in the markets, which has seen volatility spike higher and stocks move lower, falling to the new levels of the year. The trend for stock indexes is now down. The trend also remains down for the US dollar and is mixed for commodities.

Stocks

We wrot e last week “The current formation on the S&P 500 is of a very large head and shoulders pattern. We may see move lower towards the neckline of the pattern and key support around 1250 on the September contract. If that level is reached and support taken out we may see a further decline all the way to the 1125 to 1150 area, approximately 140 to 165 points lower than Friday’s close.” When writing that I did not expect that we would fall almost to that target within the next week but that’s not far short of what happened as the S&P 500 fell to 1163.5 on the September contract before mounting a partial recovery on Friday. Perhaps significantly the market closed below 1200. Other indexes were also sharply lower.

Commodities

We indicated last week that the $90 level would be watched closely as it represented the lower end of the short term trading range and this level was tested and support ta ken out, leaving Crude with a heavy decline for the week.
December gold added 1.26% for the week and reached new all time highs yet again, this time at $1684.9 before falling back to the close on Friday at $1651.8. Silver did not fare well and ended the week lower, falling below the $40 level. The trend for silver looks as though it is in danger of coming to an end, at least for now as short term support is well within range.

Currencies

As a general rule, the dollar comes into favour during times of crisis. This is primarily because it is the world’s reserve currency and is perhaps erroneously viewed as a safe haven. This has been the case for quite some considerable time but is not so much the case now. Previously the chaos and panic selling seen in the markets would have led to a sharp rally for the dollar and whilst the dollar has rallied against several majors, the gains for the week wer e perhaps less than many would have expected.
The dollar index fell just short of declining to our short-term downside target at 7330 and recovered a bit but still ended the week down. The dollar has fallen to all time lows or multi year lows against several currencies this past week, underlining how bad the plight of the dollar actually is.
We also wrote last week “Another popular safe haven currency is the Japanese Yen, which has continued to climb of late and is now at levels last seen when the Bank of Japan intervened to prevent the Yen from appreciating further. Further intervention may follow this week from the BOJ.” This week saw intervention once again from the BOJ, right on cue and this weakened the Yen initially but Friday did see another gain for the yen. One wonders how long the BOJ will be able to keep intervening but for now this looks as though it may continue around the 7700 dollar/yen level. The Swiss national bank also intervened to weaken their curre ncy, dropping rates to zero. The impact of this was short lived and the Swiss Franc still ended hitting new all time highs.

Interest rate futures

Interest rate futures rallied sharply at the beginning of the week as the long-term uptrend continues and rates continue to fall to new lows for the year. Friday did see some weakness though with Bear sash reversal patterns being seen on the daily charts for the 10 year T note and 30 year Bond. What happens this week will be very interesting to see as the markets grapple with the US downgrade.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 1st August 2011

All the focus will be on the US debt debate relating to raising the US debt ceiling in order for the US to avoid default and lose their AAA credit rating. It is in reality a joke that the US still holds this status as their debt levels are already beyond the point of no return and the fact that the US still holds the triple A rating shows how much of a joke the rating agencies are.

Stocks and the dollar have continued to edge lower whilst commodities remain mixed. Events from across the pond later today when the US senate votes and later this week will likely give a clearer perspective on future market direction. Some big moves may be on the cards.

Stocks

The S&P 500 reversed, having failed to clear 1354.5 and sold off sharply, taking out support at 1290 and bringing the current bullish run to an end. The current for mation on the S&P 500 is of a very large head and shoulders pattern. We may see move lower towards the neckline of the pattern and key support around 1250 on the September contract. If that level is reached and support taken out we may see a further decline all the way to the 1125 to 1150 area, approximately 140 to 165 points lower than Friday’s close. To the flipside of that argument, head and shoulders patterns have the habit of failing as so many people look at them so we may see a bounce higher from the neckline should the market decline that far. For now the long term trend remains up for US stock indexes.

Commodities

Crude once again failed to clear the $100 level on a closing basis and failure this time led to a move lower, culminating in a weekly loss of 4.18%. In the very short term the current range spans approximately $10, from $90 to $100. Both levels will be watched closely.

December gold added 1.71% for the week and reached new all time highs yet again, this time at $1637.5. Silver did not for once follow gold’s lead higher and ended the week roughly flat narrowly holding on to the $40 level.

Currencies

The dollar index fell just short of declining to our short term downside target at 7330 and recovered a bit but still ended the week down. The dollar has fallen to all time lows or multi year lows against several currencies this past week, underlining how bad the plight of the dollar actually is.

As we wrote last week, we still have the unusual position of high risk currencies like the New Zealand and Australian dollars being in strong demand at the same time as the Swiss Franc also hitting new all time highs. The Swiss franc is very much a safe haven currency. Another popular safe haven currency is the Japanese Yen, which has continued to climb of late and is now at levels last seen when the Bank of Japan intervened to prevent the Yen from appreciating further. Further intervention may follow this week from the BOJ.

Interest rate futures

In spite of the debt debate going on in the US, interest rate futures have continued to advance and yields continued to decline, so treasury markets certainly don’t think there will be any chance of default and price in an expected agreement to raise the debt ceiling higher, a situation that will likely happen today. As well as this, there has been further poor economic data coming out of the US, so the prospect of QE3 is very much on the table, which will likely benefit treasurys but spell further trouble for the US dollar.

Kind Regards

Robert Stewart

LS Trader Weekly Update – Monday 25th July 2011

Risk appetite has returned to the markets after a week of volatility but some safe haven markets such as gold and the Swiss franc are still in demand, so investors still remain undecided on future price moves. Stocks resumed the long-term uptrend having bounced nicely off short term support levels early in the week and the dollar has resumed the long term downtrend, falling virtually across the board over the past week. Commodities have been mixed but have benefited from a weaker dollar and this has seen Gold hit new all time highs once again.

Stocks

We wrote last week that if support around 1290 to 1300 holds that we may see a test of 1340 on the S&P 500 and that’s exactly what happened. The S&P 500 fell to 1291.3 before finding support and then moving higher before closing the week at 1341. The next target will be 135 4.5 resistance and then 1361.6, the highs of the year on the September contract. The current phase must be considered bullish as long as 1290 support holds.

The Nasdaq 100 also had a good week and reached its highest level in a decade, perhaps significantly closing above the highs of this year. Further out we may see a continuation higher towards 2565.

Commodities

Crude moved higher again but has still been unable to clear the $100 level on a closing basis. This week saw a rollover into the September contract, which briefly edged above $100 intra day but closed the week out at $99.87. Some resistance at $100 is to be expected but a close above $100 may open the way for $104.

Both Gold and Silver were higher again with Gold going on to make new all time highs. December gold posted a new all time high at $1612.3 on Tuesday before pulling back slightly, but still ending the week abov e $1600 and with a new all time high weekly close. Silver also pushed higher and retook the $40 level, which completes a 50% retracement of the massive decline seen back in early May.

Cotton had another down week and closed below the 100 level for a second consecutive week. As we wrote last week, the next major support point comes in around 80 and that will be the next target.

Currencies

The dollar index ended moved lower and pierced support at 7440. The index also broke below and upward sloping trendline that has been in place for several weeks and may now target the bottom of the wider range at 7330.

Recent weakness for both the Pound and the Euro came to an end against the dollar this week as dollar weakness took effect across the board. The dollar was also lower against the Yen and may push lower towards the March lows.

The best performing currencies continue to be the Swiss Franc and the New Zealand dollar, both of which are near to all time highs. This is an unusual position as both of these markets do not as a rule perform all that well together as one is considered higher risk and the other a safe haven. This is a clear indication of the current indecision in the markets.

Interest rate futures

Interest rate futures drifted lower this week having failed to push on and make further new highs. The trend still remains up but the highs of the year will need to be taken out to prevent further weakness.

Kind Regards

Robert Stewart