Weekly Update 19 March 2017 – LS Trader

The past week was a busy week in terms of the calendar, due to the two-day Federal Reserve meeting and triple witching on Friday. Considering that, it was a quiet week in terms of price action.

Stocks

The Nasdaq 100 hit a new all-time high on Thursday before pulling back a bit, but still closing higher for the week. That makes eleven consecutive weeks where the market has closed the week higher than the open.

The S&P 500 once again failed to confirm the Nasdaq’s new high and continues to lag, remaining below its all-time high of 2391.25 printed on the 2nd March. Price has fallen back to approximately the middle of its recent range, from resistance at 2391.25 to support at 2351. The long-term trend for US stock indexes is unquestionably up, even if the internals are weak.

The Dax also posted a new high this week, but this was not an all-time high, just a high for the current move. Thursday’s high was the highest print for the Dax in almost two years, but still a few hundred points shy of its all-time high of 12429.5, which may yet be reached.

Commodities

The metals markets have recovered some of their recent declines this week, led by Copper, which has put in a six-day rally. Palladium has also seen bullish price action. These two metals remain in long-term uptrends, while Gold and Silver remain in downtrends.

The energy markets have also retraced some of their recent declines, and both Crude Oil markets remain in uptrends, for now, but both are working their way down towards trend-defining support levels.

Sugar fell to its lowest level since June last year but printed a large hammer pattern on the daily charts, which may put the downtrend under some pressure next week if we see additional strength.

Currencies

The dollar has seen some weakness this week, with the dollar index falling to its lowest level since the 9th February. The Index remains within a range between the January high and the December low. For now, the long-term trend continues to favour the dollar, but we are seeing weakness in the short-term. The dollar also fell against the Euro, which may be set to move higher to test strong resistance at 1.09.

The British Pound rallied this week and now sits almost exactly in the middle of the trading range that has been in place since October.

The Australian dollar is approaching the upper boundary of a rectangle pattern that has been in place for 11 months. A decisive breakout above the November 2016 high could see a continued rally higher, with projected targets around 700 pips above the November high, which would be circa 8450.

Interest rate futures

Interest rate futures made a counter-trend rally this week. This rally has retraced between the 38.2% and 50% of the prior swing down. If the market is going to fall lower again to test the recent lows, it should do so from at or near to last week’s high. If these markets rally much beyond that point, which is 148.97 on the long bond and 117.32 on the 5-Year T-Note, then the low may be in for a longer period, and we could be going to see a larger retracement of the larger swing down from the November 2016 high.

Good trading

Phil Seaton

LS Trader

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