Weekly Update – 26 May 2019 – LS Trader

Monday is a Bank Holiday in the UK and is Memorial Day in the US. Therefore, most markets will be closed.

Stocks

The stock markets ended the week lower, but all remain in long-term uptrends except for the Nikkei, which was unable to complete a change of trend. The Nikkei found support just above a critical shelf of support which could be tested this week. If support here is broken, there is substantial room for further weakness, possibly back to the December low.

Commodities

From last week: “However, the long-term trend remains down, with Soybeans and Soybean Oil still in current downtrends and below resistance.” Soybean Oil and Soybeans remain weak and below resistance. However, Rough Rice completed a change of trend to up, and Oats also broke out to the upside. Corn may follow this week.

The energy markets got crushed this week, but remain in long-term uptrend expect for Natural Gas. Metals also remain weak, with Silver already in a downtrend and Gold could follow with weakness this week.

Currencies

The currency markets have seen mixed trading as the Dollar Index rallied to a new high for the current move, its highest print since May 2017. The index was unable to hold those levels and dropped back into the range, and may test support this week. The trend continues to favour the dollar against most of the majors, and if strength returns this week, further breakouts are within range.

Interest rate futures

From last week: “The 3 Month Eurodollar, basis the March 2020 contract, rallied to a new high for the current move. The remaining markets in the sector may test their March highs this week. The trend for interest rates, which move inversely to prices, remains down.” Interest rate futures rallied as expected, with all markets in the sector that we trade at LS Trader breaking out to new highs for the current move.

As we have been writing for months, the trend globally is towards lower interest rates, not higher. US interest rate futures posted their highest levels in 18 months this past week. UK Long Gilts made their highest print since October 2016 as events of the past week drastically increase the changes of Brexit happening.

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