Weekly Update – 21 October 2018 – LS Trader

The past week has been relatively quiet in comparison to recent weeks, but the long-term trends remain in effect. In spite of recent weakness in stocks, the long-term trends are still bullish for US stocks and the Nikkei. Only the Dax is in a downtrend. Interest rate futures remain in a downtrend. The trend remains mixed for commodities and down for interest rate futures.

Stocks

The Dax remains the weakest of the four stock index markets that we trade at LS Trader and is the only one currently in a long-term downtrend. The remaining three markets all currently remain long-term bullish but a change of trend to down is within range. Whether that change of trend completes remains to be seen. Once we get beyond this month, the historical seasonal record is bullish. At weekly chart level the RSI for the Nasdaq 100, S&P 500 and Nikkei 225 are all still in the bull range and above 40. Until this changes, the focus remains to the upside.

Commodities

Metals continue to show signs of turning bullish, although currently, the only metal in a long-term uptrend is Palladium, which looks set to print new all-time highs in the coming weeks. All the metals markets have recently seen commercial buying activity, which in the case of Silver is the first time in history. This is likely a bullish development longer-term, but as yet price action does not confirm it. Copper is forming a head and shoulders bottom but requires further rally to test the neckline.

Currencies

The dollar remains in a long-term uptrend and has moved higher this week. Breakouts could be seen in favour of the dollar against a few of the major currencies this week, and the dollar index may also test its mid-august high.

Interest rate futures

Interest rate futures remain in a long-term downtrend. Short-term markets remain the weakest, with the 3-month Eurodollar printing its lowest level for the current move, and also its lowest print in almost four years. The long-term trend remains down for all US markets but is still up for UK Long Gilts.

Good trading

Phil Seaton

LS Trader

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