The Nasdaq 100, which is the strongest of the stock indices, began the week with continued strength again, moved lower and then pushed back higher to close near the highs for the week, and, within range of a breakout to new all-time highs. Volatility continues to contract and is now at the lowest level since early February.
Gold began the week with weakness and pushed down to an intraday low below the lower boundary of the triangle, but then reversed higher, with a strong buying tail, and printing a hammer pattern. The long-term trend remains up.
The Dollar Index is at a very critical make or break juncture. Tuesday and Thursday saw big down days, the triangle broken and a break of horizontal support, only to see buyers return and form a hammer, and closing back at the prior support level. If we see price move above Friday’s high, we may see further rally as that would suggest the bulls had defended the lows. If last week’s low is taken out, we may see a cascade of selling, potentially down to the March low, which is the next structural level of support.
Interest rate futures
From last week: “The long-term uptrend remains intact for the shorter-term interest rate futures markets. Both the 10 Year T-Note and 30 Year T-Bond continue to coil just below resistance and could breakout to the upside.” Volatility continues to contract in the interest rate futures markets as price continues to coil. The eventual breakout from this range could be substantial, and it could be to the upside or the downside. The technical and trend structure before the consolidation into the random 2-way rotational environment still supports upside resolution.