LS Trader Weekly Update

The LS Trader Financial Spread Betting Week In Review

Stocks

The stock markets were sharply lower again this week. The trend in the stock markets remains down and I’m still looking for tests of the 2008 lows.

In last week’s commentary I wrote about the key levels for the stock markets. All of these levels came in to play this week and were taken out (with the exception of the Nasdaq 100 which fell sharply after failing to stay above resistance at 12000).

I’ve written previously about the January Barometer effect which indicates that as January goes for the S&P 500 so does the rest of the year. So far the S&P 500 is sharply lower for the month and that looks likely to continue this week. It is therefore likely that this year will be a continuation of last year’s bear market in stocks.

This week there is a 2 day Federal Reserve meeting starting on Wednesday.

Commodities

Gold rallied sharply with the April contract closing just shy of $900. This is very interesting as Gold is priced in US Dollars and when the Dollar rises the price of Gold should in theory fall. The fact that Gold went up in a week that the Dollar rose is a bullish sign for Gold.

Crude Oil ended the week higher for the first time in a few weeks and may be headed towards resistance at $50 which may well send the market lower again. Natural Gas continued the long downtrend and yet again posted new contract lows.

Currencies

The US Dollar had a good week again after moving higher against most of the major currencies. I wrote last week that a break through resistance at 8600 should lead to at least 8800. That is now the next intermediate target after 8600 was taken out.

The British pound ended the week sharply lower again and resumes the downtrend. In this month’s newsletter I wrote that the Pound may decline to $1.35. The March contract this week fell to a low of $1.3492 before recovering slightly. We should now see another test of $1.35 support and if support fails then we may see further declines to $1.20. This level seemed unthinkable a year ago, but is now a possibility.

The Japanese Yen was a big gainer for the week, especially against the Pound and to a lesser extent against the Dollar. As I’ve written here before, the Yen tends to move in the opposite direction to the stock markets, so if stocks continue to fall, the Yen should continue to rise.

Interest Rate Futures

Interest rate futures fell for the week and the correction I have talking about for the past few weeks may be upon us. The long term trend is still up but our narrow stops in these markets may be hit this week but even if they are, all our trades here will still be profitable.

This week we have 9 new trades to enter, so it's a great week to get started.

Yours for bigger winners, more often

Robert Stewart & Phil Seaton
The LS Trader Team

PS. If you are not already a subscriber to LS Trader, you can sign up here