Weekly Update – 24 February 2019 – LS Trader

The past week was a shortened week due to the Presidents’ Day holiday in the US. It was also a very active week for rollovers as multiple March contracts were rolled forward to the next contracts.

Stocks

The S&P 500 edged higher this week but with volume and volatility are in decline. The RSI hit 70.9 on Wednesday, its highest level since the 29th of August. The long-term trend remains down. The Nasdaq 100 is trading in a very similar fashion to the S&P 500.

All 4 of the stock indices that we trade at LS Trader continue to grind higher in the short-term, in counter-trend rallies to the primary long-term trend, which remains down.

Commodities

Metals remain strong with new highs being seen this week in Gold and Palladium, the latter of which was a new all-time high. High-Grade Copper completed a change of long-term trend to up, having rallied to its highest level since July last year. Silver, which is the weakest of the metals at present, may test resistance in the coming week or so.

Currencies

The long-term trend remains up for the dollar against most of the majors, and therefore, for the Dollar Index. However, the index moved lower this week, breaking below short-term support printed the prior week. Volatility continues to contract and does volume. The RSI remains in the bullish range.

The Euro, which is a near-perfect inversion of the Dollar Index naturally moved higher this week but remains below resistance. Recall that based on the EUR/USD January effect, that the January high at 1.1632 basis the continuous back-adjusted contract (currently on March) should not be exceeded if that pattern is to hold this year.

The British Pound, much the focus of Brexit, continues to climb higher and is beginning to move towards a potential change of long-term trend to up. The Commitments of Traders report continues to show massive buying from commercials of the British Pound. For now, the long-term trend remains down.

Interest rate futures

The long bond pierced resistance on Monday but as of yet without followthrough. The RSI remains in the bull range, and the long-term trend is up, Volatility is at extremely low levels, and a significant move is likely to be seen soon. The long-term trend remains up for the sector.

UK Long Gilts are close to their all-time highest level, which means that ten-year interest rates are near their all-time lows.

 

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