Weekly Update – 18 November 2018 – LS Trader

This Thursday is the US Thanksgiving Holiday so it will be a shortened trading week as US markets will be closed on Thursday and have a shortened trading day on Friday.

Stocks

Stocks ended the week lower as the long-term downtrend remains in effect. As before, the Dax and Nikkei remain weaker than US indices. It’s possibly significant that the counter-trend rallies in the Nasdaq 100 and S&P 500, were unable to get beyond the 61.8% retracement levels and also did not get to the 60 level on the RSI. This keeps the RSI in the bear range.

However, it should be kept in mind that this is the strongest period of the year seasonally for stocks, so rallies cannot be ruled out. To change the trend back to up, new highs will need to be posted, which at present are out of range.

Commodities

Natural Gas has had a hugely volatile week with wild swings in both directions. However, in spite of the volatility, the trend remains bullish for Natural gas, and the market closed the week at its highest level in almost four years, up 17.88% for the week.

The other energy markets all remain in downtrends, with RBOB Gasoline the weakest, having fallen to its lowest level since August 2017.

The metals markets rallied for most of the week, but except for Palladium, all remain in along-term downtrends. Palladium rallied to a new all-time high.

Currencies

The Dollar Index posted new highs for the current move but ended the week lower. The long-term trend remains up for the index. There is some bearish divergence between price and RSI.

The New Zealand dollar continued its recent rally and is now on the verge of a change of trend to up. This would be the first of the majors to complete a trend change to up against the dollar. The Australian Dollar is also showing some signs of strength.

Interest rate futures

Interest rate futures have had a bullish week, but except for the UK Long Gilts, remain in a long-term downtrend. A change of trend to up for US interest rate futures, which means lower, not higher, interest rates, could be completed in the coming week or so if strength continues.

Good trading

Phil Seaton

LS Trader

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