Weekly Update 1st June 2014 – LS Trader

Stocks have risen to new all time highs once more in spite of supposed seasonal weakness. We are now historically in the weakest few months of the year, but that has so far yet to have any negative impact on stocks. The dollar has for the most part moved sideways this week as the long-term trends in the currency markets remain mixed, as they do also in commodities.

Stocks

The S&P 500 rose above the 1900 resistance level and posted new all time highs this past week, and sights will now be set on a continued rise towards the major psychological 2000 level.

The Nasdaq 100 rose to new highs for the current move, and indeed new multi-year highs as we suggested may happen in last week’s update. This past week’s high exceeded the highs posted last month and was the highest level the Nasdaq 100 has reached since October 2000.

From last week “The Dax looks good for another test of all time highs, with 9823.5 basis the back-adjusted continuous contract, printed 21st January as the current all time high.” The Dax easily rose to new highs and looks set to move higher still, as another psychological round number comes in to focus, in this case the 10,000 level

Commodities

Palladium rose to new highs since August 2011 once again and remains on track for further rise to 870. Palladium continues to be by far the strongest of the metals sector as copper, silver and gold all fell this week. Silver in fact fell to new lows since late June last year and a test of multi-year lows at 1832.5 look to be forthcoming. A break of that support level, particularly on a weekly closing basis would be bearish indeed. The RSI fell on gold to 28.89, its lowest level since late June last year.

London cocoa broke through resistance to reach its highest level since September 2009 and may now continue higher to test the 2000 level. The next level of technical resistance comes in at 2089.

Currencies

The dollar index ended the week flat, and for the most part price action in the currency markets has been fairly muted this week. The 80.77 level, basis the June contract could be key for near term price action as a break above that level would suggest further advance towards 81.65 resistance.

The Euro dropped to its lowest level since the 13th February but looks to be attempting at least a short-term reversal from last week’s low. The long-term trend here is still up, but further weakness towards a test of trend-defining support cannot be ruled out.

Interest rate futures

The 30 year T-Bond rose to its highest level in just over a year basis the continuation chart, but did pull back a bit from its high of the week. Both the 5 & 10 year T notes made similar moves and reached similar highs in time duration. The entire sector remains in a long-term uptrend and new high prices are still expected.

Good trading

Phil Seaton

LS Trader

Leave a Reply

Your email address will not be published. Required fields are marked *