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The LS Trader System Weekly Update
As with last week, the short term trends continued in the stock and currency markets with stocks moving lower and the US dollar continuing higher. The long term trend is now up for the US dollar against many of the major markets. Commodity markets also continued their recent trend lower.
Stocks
Stocks were lower for the week after a strong start. The S&P 500 rallied early but was unable to pierce the 1100 level and moved lower from there before falling at 1059, which is the lowest level for the S&P 500 since early November. The Dow 30 was also lower and support at 10000 failed to hold up the market and support was not seen until 9800. There was a rejection of the lows in the US markets on Friday as buyers came in so it will be interesting to see what happens next week for US stocks. For now the long term trend is still up and Friday’s lows may provide support next week.
The Asian markets were also lower with the Hang Seng eventually ending lower by 3.29% having begun the week positively. The Nikkei also fell 2.34% and is right on the psychological 10000 level
Volatility Index (VIX)
The VIX moved sharply higher again Thursday and Friday having drifted lower for the first half of the week. The VIX at one point on Friday was at its highest level since early November but pulled back to the middle of the range that has formed over the past few months as stocks recovered some of their losses.
Commodities
Commodity markets were lower again with some good sized declines in several markets. Sugar ended the recent uptrend with a fairly steep sell off having failed to hold above the 30 cent mark that we wrote about last week.
The metals markets were once again heavily hit with large declines for all of the major metals markets. Silver took out support at 16 and continued lower and Gold fell to the $1050 level that we mentioned last week, reaching a low for the week at $1044 before closing at $1052. If gold continues lower the next support level is at $1029 and if that gives way then we may well see a move back to test major psychological support at $1000.
With the exception of Natural Gas, the energy markets continued lower and look to be headed towards a test of long term support. For now the trend remains up. From last week “March Crude Oil tested support at $72.45 before closing at $72.89. The $72.45 support level will be the one to watch this week as a break here will likely lead to a move lower to $70”. The market actually fell to $69.50 at which point buyers came in and pushed the market back over $70. $69.50 will be the level to watch this week because if buyers fail to come back in we may get an extended move lower.
Currencies
The US Dollar Index continued to gain steam and rose to its highest level since the middle of July 2009. The trend is now up for the Dollar against many of the majors. The Euro moved lower again but fell just short of the first downside target that we wrote about last week and as before we still target $1.35 and possibly later in the year may see $1.29.
The British pound declined sharply against the Japanese Yen and also the US dollar and the trend continues to be down for Sterling. The commodity-based currencies of Canada, Australia and New Zealand were all lower once again and a change of long term trend may be just around the corner.
Interest rate futures
Interest rate futures were higher across the board and even the weak link of the interest rate markets, the 30 year T Bond manage to move higher and reached its highest level since early December. The long term trend remains up for the shorter term interest rate markets and down for the 30 year bond.
Good trading
Phil Seaton
PS. Sign up for a 30 day risk free trial to The LS Trader financial spread betting system by clicking here. We offer a 30 day 100% satisfaction guarantee and you can cancel at any time should you not be delighted with the system.
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The LS Trader System Weekly Update
The recent short term moves in the stock and currency markets continued this past week with stocks falling once again and the US dollar gaining steam and rising for the week against all the major markets that we trade at LS Trader. Commodity markets continue to head lower with several new downtrends on the horizon.
Stocks
From last week “A correction in stocks has been on the cards due to both the size and duration of the recent rally but it remains to be seen what will happen from here. The long term trend is still up but this will not be the case for too long if heavy selling of the magnitude seen over the past week continues.”
Weakness in stocks continued but the moves lower were less than the previous week as stock market volatility declined somewhat from the previous week. Overall the long term trend remains up for stocks but weakness is evident in several indexes. The Nasdaq 100 was the worst hit after declining 3.25% for the week and falling to its lowest level since early November last year.
Volatility Index (VIX)
The VIX declined for the week, giving back a fair portion of the gains from the previous week. Support was found at around 22 and we may see a move higher again over the next couple of weeks.
Commodities
Commodity markets were generally lower with some good sized declines in several markets with Sugar and Rough rice being the only markets to move higher. Sugar added 3.89% for the week and broke out to new contract and multi year highs once again. There was a brief attempt at crossing the 30 cent mark which failed early in the week but a strong close on Friday at 29.90 suggests we may see another attempt at that level this week. If 30 cents is again rejected then a move back to support at around 28 cents may follow.
The metals markets were heavily hit with large declines in most of the metals. Copper took out support early in the week and brought a decent trend that had been in place for a few months to an end. Silver declined 4.38% for the week and is currently covering just above support at 16. April Gold was marginally lower but traded in a fairly tight range all week with traders undecided on the next move. Support at $1050 looks to be the downside target and $1148 the upside target.
Energy markets were all lower but the long term trend remains up for now. March Crude Oil tested support at $72.45 before closing at $72.89. The $72.45 support level will be the one to watch this week as a break here will likely lead to a move lower to $70 whereas support may push the market back up to the middle of the trading range that has been in place for the past few months.
Currencies
The US Dollar Index continued to move higher, advancing to its highest level since August last year. The Euro continued to decline and took out support at $1.40 that we mentioned last week. As before we now target $1.35 and possibly later in the year all the way back to $1.29.
All of the major currencies fell for the week against the dollar and the British pound declined against the Japanese Yen as well as the dollar. The commodity-based currencies of Canada, Australia and New Zealand were all lower but all have yet to show sufficient weakness for a change of long term trend.
Interest rate futures
Interest rate futures were higher with the 5 & 10 Year Notes leading the way. The 30-year bond continues to lag and registered a small loss for the week. The long term trend remains up for the shorter term interest rate markets and down for the 30 year bond.
Good trading
Phil Seaton
PS. Sign up for a 30 day risk free trial to The LS Trader financial spread betting system by clicking here. We offer a 30 day 100% satisfaction guarantee and you can cancel at any time should you not be delighted with the system.
Filed under financial spread betting by
The LS Trader System Weekly Update
It’s been another choppy week in the markets, which has seen some of the recent trends come to an end, especially in the stock markets. Whilst there has been weakness in stocks, the US dollar continues to advance against most of the majors and the rally that began late 2009 for the dollar has resumed, having stalled over the past few weeks.
Stocks
Stocks were hit with heavy selling as the recent uptrend came to a fairly dramatic end. The Dow 30 plunged 4.1% for the week, the S&P 500 fell 3.9% and the Nasdaq dropped 3.46%. The European indexes were also hit heavily with the Dax down 2.97%. The worst hit index was the Nikkei 225, which fell 4.51%.
A correction in stocks has been on the cards due to both the size and duration of the recent rally but it remains to be seen what will happen from here. The long term trend is still up but this will not be the case for too long if heavy selling of the magnitude seen over the past week continues.
Volatility Index (VIX)
From last week “there will at some point in 2010 almost certainly be a correction of decent size in the stock markets and a probable large move higher in the VIX as fear returns to the markets and traders look to protect themselves.”
We certainly got a move higher in the VIX as the index moved sharply higher for the week. An explosive burst higher on Thursday and Friday pushed the market higher before closing at 27.31, a staggering 50.3% gain for the week. As we have been writing for many weeks, a move of substantial size has been on the cards and the markets are not so complacent now. It’s quite likely that the VIX will continue higher from here, especially if stocks continue to struggle.
Commodities
The commodity markets were mostly lower for the week with only a few exceptions. Sugar reached new highs again Thursday before pulling back slightly to the close on Friday. Orange juice recovered some of the previous week’s losses having moved higher from support.
Metals did not fare so well with all 5 metal markets lower for the week, with big losses for Silver (-8.11%) and Gold (-3.61%). The trend is still up for metals but Silver is leading the way to the downside and will likely be the first of the metals to give a change of trend if current weakness continues.
The energy sector was also heavily hit with big losses for Crude (-4.89%), Heating Oil (-5.1%) and No leaded gas (-3.9%). The only gainer in this sector was Natural gas, which added 2.25% for the week.
Currencies
The US Dollar advanced for the week, posting new contract highs for the week on the dollar index. The Euro also declined and took out the support levels that we have been mentioning for the past few weeks at $1.42. The Euro now looks set for a test of $1.40 and if this level can be taken out then we may well see further declines to around $1.35 and possibly later in the year all the way back to $1.29.
The British pound had another volatile week, firstly clearing resistance at $1.64 before reaching a high for the week at $1.6454 and then reversing back down towards the $1.60 level. The pound has remained in a range for several months between $1.70 and $1.57 and a breach of either level is likely to give rise to good movement. For now the trend is down so the odds are that the breakout will be to the downside.
Interest rate futures
Interest rate futures moved higher again and gains were seen in all 4 of the interest rate markets that we trade at LS Trader. As we wrote last week, the long term trend is still up for the shorter term markets and we may see a continuation higher from here.
Good trading
Phil Seaton
PS. Sign up for a 30 day risk free trial to The LS Trader financial spread betting system by clicking here. We offer a 30 day 100% satisfaction guarantee and you can cancel at any time should you not be delighted with the system.
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The LS Trader System Weekly Update
This coming Monday is Martin Luther King day in the US, so the US markets will be closed on Monday, so we will have a shortened trading week. It remains to be seen whether the weakness we saw in stocks at the end of last week continues in to the new week after the long holiday weekend. For now the long term trend remains up for stocks, up for commodities and down for the US Dollar.
This coming week we are entering 3 new trades.
Stocks
As we wrote last week the week just gone is historically weak on average and we ended up with weakness leading in to the holiday weekend as US markets had their worst declines so far in 2010.
The Nikkei did move up towards 11000, but fell short at 10960 before ending the week slightly down. Currently the stock indices are holding above support and the long term trend is up.
Volatility Index (VIX)
The VIX posted new lows again at 1686 on Monday but then moved gradually higher for the rest of the week before closing at 1817. So, once again the markets remain very comfortable at the current levels and complacency remains high. As we have been saying for the past few weeks there will at some point in 2010 almost certainly be a correction of decent size in the stock markets and a probable large move higher in the VIX as fear returns to the markets and traders look to protect themselves.
Commodities
Orange juice gave up a large portion of the recent gains on Monday as the exchange doubled the daily trading limit from 10 cents per pound to 20 cents per pound (the equivalent of an extra 1000 financial spread betting points). Orange Juice ended the week lower by 12.83%.
Metals had a mixed week with big gains for Palladium and Platinum but losses for Gold, Silver and Copper. The energy markets reversed after Crude, Heating Oil and No leaded gas reached new highs but then sold off in fairly dramatic fashion.
The long term trend for Natural gas is still down after declining just over 1% for the week (February contract). Upside resistance remains in place for February Natural Gas at 6100.
Currencies
The dollar index declined marginally for the week as direction remains uncertain. Resistance at 7900 to the upside remains in place and all attempts towards this level have so far ended in failure, pushing the market lower each time. The long term trend remains down.
The so called commodity based currencies of Canada and New Zealand posted modest gains but the Australian dollar ended marginally lower having failed to push up through resistance.
The British pound had a good week, gaining 1.41% against the US dollar. We may see a test of resistance at $1.64 this week but for now the long term trend remains down.
The Euro ended the week marginally lower having earlier reached $1.4577, which is the top of the current short term range. Support at $1.42 is still in place so these 2 levels remain the range for now and a break of either should lead to a move in the direction of the breakout. For now the long term trend remains up but Friday’s sell off was fairly ugly, so a test of support at $1.42 may be seen soon.
Interest rate futures
Interest rate futures moved higher for the week with shorter term prices moving up to their highest levels in over 3 weeks. As we wrote last week, the long term trend is still up for the shorter term markets and will remain so as long as support holds. Longer term futures also gained for the week but the longer term markets have been weaker of late and are lagging the shorter term markets.
Good trading
Phil Seaton
PS. Sign up for a 30 day risk free trial to The LS Trader financial spread betting system by clicking here. We offer a 30 day 100% satisfaction guarantee and you can cancel at any time should you not be delighted with the system.
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The LS Trader System Weekly Update
It’s been a very good start to 2010 with several markets trending well and some large moves being seen in a few markets, especially Orange juice. After the first week of the year the LS Trader financial spread betting system has gained 19% in just a single week, benefitting from continued moves higher in stocks and numerous commodity markets. This week we are entering 5 new trades.
Stocks
Stocks remain in very tight ranges as volatility remains at very low levels in the stock indexes. The S&P 500 advanced every day this week and is now at its highest level since October 2008. There is little in the way of resistance for the S&P until around the 1170 level so this extended bull market may yet continue higher. That said, this coming week is January expiration week and has been a poor week for stocks in 8 of the last 11 years. This same week in 2009 saw the S&P 500 shed 2.3%
The German Dax also reached new highs, as did the Nasdaq and the Nikkei, which may be headed for a test of 11000 this week. If 11000 can be taken out then there is the possibility of a continued moved higher.
Volatility Index (VIX)
The VIX moved lower again, reaching new low levels at 1816. This means that the markets remain very comfortable at the current levels and complacency remains high. As we said last week there will at some point in 2010 almost certainly be a correction of decent size in the stock markets and a probable large move higher in the VIX as fear returns to the markets and traders look to protect themselves.
Commodities
The big gainer for the week was Orange juice was gained 17.1% for the week and included 2 limit up days of the imposed-exchange limit, which is 10 cents per pound. 10 cents per pound equates to 1000 financial spread betting points. Some of the coldest weather in years is affecting the crops in Florida.
Copper continued to move higher, once again posting new contract highs and ending the week ahead in spite of a fairly large sell off on Thursday and Friday. The long term trend is still up for the metals sector and strength returned to both Gold and Silver during the past week with Silver adding 9.65% for the week and Gold adding 3.9%
Crude oil broke through resistance at $80 but remains just below the October highs. No leaded gas and Heating oil both advanced for the week and reached new contract highs in the process.
The long term trend is still up for energies with the exception of Natural gas. Natural gas remains the weakest of the energies but did briefly manage to clear resistance at 6000 in a volatile week before pulling back. Gas ended the week ahead by 3.18%.
Currencies
The dollar index declined for the week as the rally from the end of last year continues to fizzle out and the market remains unable to break through resistance at 7900. Therefore we have still yet to see sufficient strength in the US dollar to confirm a change of trend and for now the trend remains down.
The so called commodity based currencies of Australia, Canada and New Zealand all advanced for the week on the back of higher commodity prices and may continue to advance. All 3 of these markets remain below the highs set in 2009 but have already recovered some of their losses from the US dollar rally at the end of last year.
The British pound ended the week slightly lower but closed once again above $1.60 having earlier been lower. The trend remains down for the pound.
The Euro held firm above support at $1.42 and a range is forming between $1.45 and $1.42. A break of either level is likely to give rise to a reasonable sized move. For now the long term trend remains up.
Interest rate futures
Longer term interest rate futures ended the week marginally higher but the shorter term advanced higher from support. The long term trend is still up for the shorter term markets and will remain so as long as support holds.
Good trading
Phil Seaton
PS. Sign up for a 30 day risk free trial to The LS Trader financial spread betting system by clicking here. We offer a 30 day 100% satisfaction guarantee and you can cancel at any time should you not be delighted with the system.
Filed under financial spread betting by
The LS Trader System Weekly Update
As we bring the curtain down on 2009 and move in to 2010 the long term trends remain as they have been for much of the past year with the long term trends being up in stocks and commodities and down in the US dollar. The dollar though has been showing signs of strength and is the most likely of the above 3 sectors to give a long term trend change first.
2009 was a highly volatile year on the whole, with the main exception being the stock markets over the second half of the year, which for the most part moved quietly higher. 2010 may begin in a similar volatile fashion as investors position themselves for the year ahead but on the whole, 2010 is likely to be a less volatile year than 2009 with the exception of the stock markets, which will likely see an increase in volatility at some stage this year.
Stocks
2009 had the worst January on record but still ended up with gains by the end of the year after a strong rally from the March lows pushed the market ever higher through to the end of the year. On a seasonal basis this strength can often be seen continuing through to February.
For the year, the Nadsaq was the best performer from the US stock indexes, gaining 43.9%. The S&P 500 gained 23.5% and the Dow ended with an 18.8% gain. The trend remains up for stocks but the first 5 days of January could give some clues as to what may happen through 2010.
Volatility Index (VIX)
The VIX ended higher for the week and moved up slightly from the lows of the year, which ended up being 1925. The close for the year ended at 2168, which is still a very low level. At some point in 2010 there will almost certainly be a correction of decent size in the stock markets and a probable large move higher in the VIX as fear returns to the markets and traders look to protect themselves. Currently though the stock markets (S&P 500) are comfortable at these levels.
Commodities
Copper continued the move higher that has been intact for most of 2009. New contract highs were reached on the last trading day of the year and the trend remains up. Copper has gained 123% for the year, which is a big trend and may yet continue higher. The long term trend is still up for the metals sector although there remains short term weakness in Gold and Silver.
Crude oil edged higher for the week, gaining 1.68% and reached the $80 level that we mentioned last week, which was actually the high for the week before the market moved slightly lower to the close.
The long term trend is still up for energies with the exception of Natural gas, which once again failed to clear the 6000 and pushed lower from there.
Currencies
The dollar index ended the week slightly higher having moved around a bit during the shortened trading week. We have still yet to see sufficient strength in the US dollar to confirm a change of trend and for now the trend remains down but this may change soon.
The British pound had a mixed week have first posted new contract lows early in the week before a reversal took the pound back above $1.60 and closing at $1.6146. The long term trend remains down for the pound.
The Euro ended the week higher but remains undecided on which direction to take. Support at $1.42 has so far held firm and this level will have to be taken out for a change of long term trend.
Interest rate futures
Interest rate futures reached new contract lows on the last trading day of the year before moving higher to the close. The trend is down for long term interest rates but still up for shorter term rates. Shorter term markets may be set for a test of support soon. Whether this support level holds of gives way will indicate the direction of these markets in the near term.
Good trading
Phil Seaton
PS. Sign up for a 7 day free trial to The LS Trader financial spread betting system by clicking here.
Filed under financial spread betting by
The LS Trader System Weekly Update
Stocks continued the recent rally and posted new highs for the year as recent dollar strength took a pause. Commodities also had a strong week for the most part as several markets headed higher again. The long term trends remain intact and are still up for stocks and commodities and down for the dollar. Of all of these trends, the long term trend for the dollar looks most likely to change first.
Stocks
The S&P moved to new highs for the year, as did the Nasdaq 100 and the German Dax as the seasonal Santa Claus rally arrived a couple of days early, leading to 4 straight days of gains. We will likely see a continuation of this rally over the next few days and the probability of new highs again is on the cards.
Another week of gains for the Nikkei took the market up to its highest level since early October and to within reach of new highs for the year.
Volatility Index (VIX)
The VIX moved lower for the week and posted new lows for the year at 1947. This reading shows that the stock markets (S&P 500) are still comfortable at the current levels in spite of new highs being made.
Commodities
With the exception of Gold, metals moved higher again for the week. Weakness was seen early in the week for Palladium and Platinum but these market recovered from the lows posted on Tuesday to rally sharply higher. Copper had a strong week, posting new contract highs and reaching its highest level since August 2008. The long term trend is still up for the metals sector.
Crude oil continued the rally from the previous week, gaining just shy of 5% for the week. The February contract may now be set for a test of the $80 level. The long term trend is still up for energies with the exception of Natural gas, which is pushing towards a long term change of trend to up as well. Currently Natural gas is struggling with resistance at 6000 (February contract).
Sugar continues to do well having once again broken out to new highs for the year. We also saw new highs for the year in Orange juice, but Cotton, Coffee and Cocoa drifted lower.
Currencies
The dollar index declined for the week having earlier reached new contract and multi week highs on Tuesday and Wednesday. We have so far yet to see sufficient strength in the US dollar to confirm a change of trend and for now the trend remains down but this may change soon.
The British pound continued lower again and took out the $1.60 level. The pound remains on target for a test of major support from the October lows at $1.57. Support for the Swiss franc at 9500 continued to hold and the long term trend remains up.
As expected, the Euro moved higher for the week after the sharp declines from the previous week. The anticipated strong support at $1.42 put further declines on hold after lows for the week were posted Tuesday at $1.4215. Support at $1.42 will have to be taken out for a change of long term trend.
Interest rate futures
Interest rate futures headed lower led by longer term interest rates. There was weakness across the board for interest rate futures but longer term bonds broke lower first by taking out support. If longer term bonds continue lower then the other interest rate futures will follow lower and we may be at the beginning of a new downtrend for this sector.
Good trading
Phil Seaton
PS. A free 7 day trial to the LS Trader financial spread betting system is available by clicking here
Filed under financial spread betting by
The LS Trader System Weekly Update
Stocks have held up well in spite of strength in the US dollar and may well test new highs for the year this coming week. For now the long term trends are as we were with trends are up for stocks and commodities and down for the dollar.
Stocks
The S&P edged slightly lower for the week with the March contract closing just below the 1100. The Nasdaq 100 pushed up through 1800 and closed at 1807. This coming week normally brings with it the Santa Claus rally in the stock markets which usually runs for the last 5 trading days of the year through to the first 2 trading days of January. Since 1950 this rally has produced an average gain of 1.5% over the 7 trading days. We may therefore see new highs in the stock markets between now and Tuesday 5th January.
Volatility Index (VIX)
The VIX ended the week slightly higher but is still at very low levels and remains just above the lows for the year. This reading shows that the stock markets (S&P 500) are quite comfortable at the current level at the moment.
Commodities
Gold briefly pushed through support at $1100 before moving slightly higher to close Friday at $1111. Support at $1100 remains the level to watch but failure here could lead to a decline back to $1050. In spite of the current correction the long term trend is still up for Gold as it is in all the metals.
Crude oil snapped a run of weekly declines and finished the week 4.99% up having earlier posted new contract lows at $68.59. The long term trend is still up but the market is in a range between $68.59 and $79 at present.
Natural gas continued the counter trend rally and has reached its highest level in 8 weeks. The long term trend remains down for Natural gas but this may change soon if recent strength continues.
The soft commodities sector continues to do well with another good week for Sugar, which broke out to new highs for the year again. Cotton also reached new highs for the year but pulled back slightly by Friday’s close. The trend is firmly up in the softs sector and these markets are currently outperforming the other commodity markets.
Currencies
The dollar index moved higher again, moving to its highest level since early September and taking out the 7800 level that we mentioned last week. It remains to be seen as to whether this is a bear market rally for the dollar or will continue to push on for a change of long term trend.
The British pound continued lower and may still be headed towards October lows at $1.57. The Swiss franc also continued its sell off but support came in at just over the 9500 level that we mentioned last week.
The Euro continued lower through support at $1.46 and also fell through support at $1.44 level. The 4 straight days of declines that we have just seen may ease early next week and strong support at $1.42 may be seen. If this level fails then a prolonged downtrend for the Euro may be on the cards which may last well in to January.
Interest rate futures
Interest rate futures continued to head lower and took out support levels bringing an end to the recent uptrend. The markets moved higher off the lows for the week to end the week flat. The long term trend is still up in this sector.
Good trading
Phil Seaton
PS. Sign up for a 7 day free trial to The LS Trader financial spread betting system by clicking here.
Filed under financial spread betting by
The LS Trader System Weekly Update
The recent correction in many markets has continued this week but stocks have held up well and may well test new highs for the year in the week ahead. The long term trends are still unaffected in spite of the correction that has affected many commodity markets and the long term trends are still up for stocks and commodities and down for the dollar.
Stocks
The stock markets ended the week were they began, having recovered from some short term weakness mid week. The S&P closed above the psychological 1100 level for the second straight week and this may lead to a test of new highs for the year this coming week. The Asian markets ended the week lower in spite of some strength on Friday.
The long term trend remains up for the stock markets on the whole and this is normally a strong period of the year for stocks so we may see moves higher between now and the end of the year.
This week is Triple Witching week for stocks and on a historical basis is often a strong week with large gains often being seen on Triple Witching Friday. The odds are therefore with higher prices for stocks between now and the end of the year.
The VIX moved higher mid week but ended the week just slightly up but is still at very low levels and may still be headed back towards lows for the year at 20.10 as complacency remains in the markets.
Commodities
Gold continued the recent correction and many commodities followed gold lower. We are now back down to the lowest levels seen in a few weeks but still remain just ahead of support at $1100. Support at that level will likely be tested and if support holds then we may see a move back higher for gold but if support fails then the sell off will likely continue possibly back towards $1000 and dragging the other metals with it. In spite of the current correction the long term trend is very much up for Gold as it is in all the metals.
Crude oil broke out of the recent trading range that we wrote about last week having decisively taken out support at $75. The January contract closed just below the $70 level and may now be headed further south towards support at $66. No leaded gasoline and heating oil followed Crude lower and whilst the long term trend remains up for these 3 markets that may change if weakness continues.
The Natural gas downtrend halted after a rally cleared short-term resistance. The long term trend remains down for Natural gas.
Currencies
The dollar index moved higher for the second straight week moving close to its highest level in six weeks. The March contract may be headed higher towards the 7800 level over the next week or so. The trend is still down for the Dollar against most of the majors but that may be on the verge of changing, as the dollar is looking set for a bounce higher.
The British pound fell through short term support and may now be headed lower towards October lows at $1.57. The Swiss franc also continued its sell off having failed to stay above the 10000 level. The Swiss franc may now be headed towards a test of support at 9500.
The Euro, like the Swiss franc also took out short term support having been firmly rejected over the $1.50 level. The next support level is around the $1.44 level.
Interest rate futures
Interest rate futures continued to head lower and are now just above support levels which will likely be tested this week. If support fails then the recent uptrend in interest rate futures may well be over and we may see new contract lows soon.
Good trading
Phil Seaton
PS. Sign up for a 7 day free trial to The LS Trader financial spread betting system by clicking here.
Filed under financial spread betting by
The LS Trader System Weekly Update
On the whole it’s been a volatile week for most markets with some large swings seen in commodities and currencies. The long term trends are still unaffected though with the trend still up for stocks and commodities and down for the dollar. It will take some fairly significant moves in these markets for a long term change of trend to take place, so last week’s moves will likely be viewed as short term corrections.
Stocks
The stock markets gained for the week and the S&P 500 finally closed the week out above 1100. The Dow 30 tested the 10500 level, posting a new high for the year at 10510 before closing the week out at 10400.
The Asian markets reversed and buyers returned to the Nikkei at support levels just over 9000. The Nikkei ended up with a 10.9% gain for the week and may now be headed back towards contract highs at 10690. The Hang Seng also advanced sharply, gaining 5.85% for the week, which erased the heavy losses from the previous week.
The long term trend remains up for the stock markets on the whole and this is normally a strong period of the year for stocks so we may see moves higher between now and the end of the year.
The VIX erased the previous week’s gains and looks to be headed back towards lows for the year at 20.10 as complacency remains in the markets.
Commodities
Gold had a wild week having first cleared the $1200 level with ease and setting new all time highs in the process at $1227.50 on Thursday. Then Friday came and we saw a very steep sell off with gold declining all the way to $1147 before recovering to close the week slightly down at $1169.50. In spite of the dramatic sell off the trend is very much up for Gold and we will remain bullish as long as support above $1100 holds.
The energy markets returned to their recent trading range with Crude oil spending the week between $75 and $80. Both of these levels look to be the key to short term direction if either level can be decisively cleared to take the market out of the current consolidation. The long term trend remains up for the energy markets with the exception of Natural Gas. Natural gas continued its recent decline, dropping by 11.67% for the week and posting new contract lows in the process.
Currencies
For the first time in a while the dollar index failed to make a new contract low and moved higher from support just above the 7400 level. The long term trend is clearly still down for the dollar and Friday’s sharp move higher was likely a bear market rally. It will be interesting to see the reaction of the market next week, especially in terms of the Euro, which sold off sharply having been clear of the $1.50 level earlier in the week. There is clearly very strong resistance to the upside for the Euro at $1.5144.
The Japanese Yen had a sharp reversal and declined against the US dollar and the British pound. It remains to be seen whether this sell off was just a correction or is going to lead to a longer term change of trend. The long term trend for the Yen is still up against both the Pound and the dollar.
Interest rate futures
Interest rate futures reversed sharply with all the markets falling for the week in a counter trend move. The trend is still up for this sector and recent support levels may be tested soon.
Good trading
Phil Seaton
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