U.S. stocks made new all-time highs again this week, and the dollar continues to weaken across the board. Interest rate futures continue their recent recovery and remain in long-term uptrends. Commodity markets remain mixed for the most part as they continue to build up for the next major move.
Both the Nasdaq 100 and the S&P 500 hit new all-time highs this week, and both made new all-time weekly high closes. Price action has not been convincing following the breakout and volatility, and volume remains subdued.
The Dax fell to its lowest level in four months and this week’s low fell within the large gap printed back in April. Price is now decisively below its 50-day MA and may head lower towards its 200-day MA, currently at 11906. The Dax is the weakest of the four indexes we trade at LS Trader and may complete a change of trend to down over the coming weeks.
Gold had a decent week, keeping the long-term uptrend intact. Volatility is expanding, and price may continue higher towards 1300 level over the coming week or so.
Copper reached its highest level since early March and could be poised to complete a trend change to up if it can successfully breakout from a five-month consolidation.
The energy markets reached their highest levels in six weeks but the breakout was rejected, and prices moved lower into the week’s close. The long-term trend remains down and a breakout to the downside to resume the downtrend remains on the cards.
The grain markets have seen increased volatility in recent weeks, and that appears to be the new norm. This is a good thing as it will result in some large trends over the coming months. Oats remains the strongest of the grains markets at present and the highs printed at the start of July could be tested this week. A successful breakout would firm up our longer range target of 350.
The dollar index fell to its lowest level since June 2016 and could be heading lower for a test of major support at 91.88. Volatility is expanding to fairly elevated levels so we may be nearing the point of a correction, but the long-term trend remains firmly down.
From last week on the Euro: “Further strength this week could see an additional rally towards the area of the 200-week MA, over the coming weeks.” The Euro continued its advance and may test the 200-week MA (currently at 1.1844) this week as the dollar continues to weaken across the board. The Euro matched its 2015 high to the pip this week, and a breakout here could open the way to a few hundred more pips. Long Euro/USD is currently our most profitable open position, with 703 pips profit since we went long back on the 25th April.
The Australian dollar tested the 8000 level but has so far been unable to break through. Our target at 8400 remains in place. The other two commodity based currencies are also doing well.
The British Pound posted another new high since September last year but fell back before a slight recovery on Friday.
Interest rate futures
Interest rate futures continue their recovery following the correction that began late last month. Price has moved decisively above both the 50 and 200-day MAs, and the RSI is testing the 60 level. If we see a decisive move above 60 on the RSI, we may see a test of the local top in these markets, printed during the last week of June. The long-term trend remains up across the sector.