US stocks rallied to new all-time highs again this week as global stocks remain bullish. The dollar has continued to weaken, and interest rate futures have seen renewed strength.
The week ahead sees some key events. On Thursday we have the UK General election, and the European central bank meets. In the US, former FBI Director James Comey will offer testimony to the Senate. These events could all contribute to further increases in volatility as many asset classes continue to move out of the long-standing low volatility environment.
The Nasdaq 100 and the S&P 500 both continued their recent bullish price action to print new all-time highs this week and for a change did so on increasing volume. This week’s breakouts to new highs on both indexes have been accompanied by above average volume and have also seen volatility expand nicely into the trend zone.
The Nikkei has also closed above the 20,000 level for the first time since August 2015, as global stocks remain bullish.
Gold continues to grind higher and may yet reach the April high at just over $1300. Volatility is quite elevated in this market, which is a negative factor at present for a continued advance much beyond this year’s highs.
Several commodities fell to new lows for their current moves. Coffee declined to its lowest level in a year on increasing volume and volatility. The RSI has also fallen below the 40 level so further declines, possibly to the 120 area may lie ahead. Soybeans, Soybean Meal and Bean Oil also all declined to new lows for the current move.
Natural Gas broke out of a near 3-month consolidation to the downside and looks set to test this year’s low. The other energy markets also declined and are heading back down towards recent support levels.
The Euro tested support on Tuesday but then rallied to new highs for the current move, falling just shy of the 1.1300 level. The current target is the spike high printed back on the 9th November at 1.1411.
The dollar index declined to its lowest level since that same date in November, and the volatility profile suggests there is room for further declines, at least to 95.65, where the next level of chart support is likely to be found.
Interest rate futures
Interest rate futures got back on track this week as the 30 Year T-Bond, and the 5&10 Year T-notes rallied to new highs for the current move. The trend remains up for interest rate futures.