Weekly Update – 18 July 2020 – LS Trader

Stocks

The Nasdaq 100 made a new all-time high on Monday but then corrected lower to trendline support, and spent the rest of the week trading sideways. The trend remains up, and the market is above short-term support.

Commodities

From last week: “Copper has rallied strongly since completing a change of trend to up two weeks ago. Copper prices are now testing this year’s high posted back in January.” Copper printed a new high for the year, but printed a long-legged doji on the weekly chart, suggesting indecision. The trend is up. Silver made its highest print since September last year.

From last week: “Lumber also completed a change of trend and has broken out to new highs for the year, and its highest level since July 2018. Volatility has reached elevated levels in Lumber.” Lumber was the big mover of the week, closing the week with a 10.33% gain. Volatility has reached its highest level in almost 18 months so we may be due a correction back to fair value.

Currencies

The currency markets continue to trade mostly sideways, with breakouts in range. These markets have been subdued for quite some time and are due a volatility expansion. Whether there will be a catalyst to deliver that remains to be seen.

Interest rate futures

Interest rates futures remain at exceptionally low volatility levels and continue to trade in an extremely tight range. The eventual breakout from this low volatility range should yield a decent move, with the bias currently to the upside in the direction of the primary trend.

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