From last week: “..the continued collapse in volatility does put a question mark against much further rally.” Both the Nasdaq 100 and the S&P 500 failed to make new highs this week and sold off aggressively. However, the daily chart shows long bull shadows on the daily bars, especially on Thursday and Friday, which suggests that the lows are being rejected and that buyers are stepping back in. Added to that, the RSI found support in the 40-50 range, and the long-term trend remains up.
From last week: “The Nikkei tested resistance and only needs to exceed last week’s high to complete a trend change to up to join the other three stock indices that we trade at LS Trader in long-term uptrends.” The Nikkei opened the week lower and, therefore, never completed the trend change and remains in a long-term downtrend.
The metals markets remain in long-term uptrends overall, but price action continues to remain sloppy and without short-term directional bias. Silver is the most likely to complete a change of trend to down shortly.
The energy markets may have made a significant top in late April. Short-term price action suggests lower prices in the coming weeks. However, for now, the long-term trend remains up.
The grains markets remain weak, with most of the sector in extended downtrends. Soybeans printed its lowest price since late 2008; such is the extent of current price weakness. Soybean Oil may test the 25.70 level in the coming week or so, which is the lowest print since 2006.
Price action remains mixed in the currency markets but continues to favour the dollar overall. The Aussie made its lowest print since January, and the Kiwi its lowest since October, but the Dollar Index corrected lower.
Interest rate futures
Interest rate futures continue to show signs of strength as the long-term uptrend appears to be getting back underway. The March high could be tested in the coming weeks.