It’s been another great week in the markets and one that has seen the LS Trader System hit new all-time highs.
This week ahead sees the US Federal Reserve meeting. Current market expectations are for the Fed to cut rates by another 75 basis points and possibly more. They are expected to get to zero by the end of the year and stay there.
It’s been a wild week with huge swings daily, which included the second biggest down day in history. It also saw the 10th largest up day for the Dow on Friday. Expect more wild swings this week.
From last week on energies: “However, by our proprietary measures, volatility in the sector is not yet at an extreme, so the downtrend does have room to run.” The energy sector collapsed at the open on Sunday night with a huge gap lower. The market found support at Monday’s low and has bounced a bit higher, but remains in a steep downtrend.
The Dollar Index opened the week sharply lower but then put in an even sharper 4-day rally, and will likely test the highs of the year this week.
Interest rate futures
From last week: “Sentiment on the 30-year T-Bond is at 98% bulls. As of now, there are no reversal setups, but with such extremes, pullbacks are likely.” Interest rate futures rallied to a new high on Monday, but the sold off. The long-term trend remains up, but support could be tested this week.