Weekly Update – 12 April 2020 – LS Trader

Monday is a Bank Holiday in the UK, but US markets will be open as normal.

Volatility continues to undergo compression in most markets as it declines from the recent peak, which shows that markets are correcting against the primary trend. We can expect the resumption of most trends over the coming weeks.

Stocks

Stocks have retraced to the 50% range and have met the minimum requirements for a retracement. Indices could turn down as early as this week. However, markets are now back within the middle of the range and with the Fed throwing the kitchen sink at them, confirmation that the downtrend has resumed is required. Markets could continue to rally further, and the old adage of don’t fight the Fed is often prudent.

Commodities

Gold made an explosive move to the upside, taking out the prior highs as expected, and reaching its highest level in over seven years. Silver also rallied, bringing an end to a profitable downtrend.

Commodities overall have seen mixed trading with strength in some markets and weakness in others.

Currencies

The dollar moved lower this week against the majors, and the Dollar Index ended the week lower, back in the middle of the current range.

Interest rate futures

The trend remains up for interest rate futures, with the shorter-term markets still holidng above support. There are arguable head and shoulders continuation patterns forming on the 30 Year T-Bond and 10 Year T-Notes. A break of the neckline would suggest new highs and possibly negative interest rates in the US.

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