LS Trader Weekly Update

The past week has been a mixed week for currencies with some wild moves seen in both directions. The trend remains up for the dollar against most of the majors. Away from currencies, many other markets remain in trading ranges that have held for quite some time so as we wrote last week the probability increases that the next breakout from these ranges could lead to decent sized moves.

The LS Trader System Weekly Update

Stocks

Stocks edged higher for the week, continuing from the lows formed on from Friday 5^th which are providing support and for now look to as though they could be the bottom for the immediate term. The S&P 500 cleared strong resistance at 1100 and may continue higher from here.

From last week “The strong close on Friday for the Nasdaq 100 may provide sufficient momentum to push for a test of 1800 resistance this week”. The Nasdaq 100 advanced steadily throughout the week, taking out the aforementioned 1800 resistance level before closing at 1819.3 for a again of 2.02% for the week. We are now roughly in the middle of the current trading range between circa 1700 and 1900.

Volatility Index (VIX)

The VIX had another down week, declining just shy of 12% for the week before closing at 20.02, which is the lowest close for 5 weeks as the stock indexes continue to be complacent with the current levels. The recent lows for stocks continue to provide support for the stock indexes and stocks therefore look fairly bullish as long as that level holds, which is also keeping the VIX in check.

Commodities

From last week “The current range for Crude is between $69.50 and $78. A decisive break through either level may lead to a substantial move in the direction of the breakout”. Crude cleared $78 (April contract) and then advanced rapidly to close at $80.06. It remains to be seen as to whether there is sufficient strength to push higher towards the next resistance level.

It was another good week for the metals and all the metals were higher with Copper being the biggest gainer once again, after adding 8.93% for the week. Gold also moved higher having tested and cleared the $1100 level that we wrote about last week. The next upside target for the yellow metal is $1150.

Currencies

The trend continues to be up for the US Dollar Index as it does for the dollar against most of the majors. The dollar index ended the week higher having once again posted new contract highs on Friday.

The Euro moved lower again and took out the $1.35 target that we have been writing about recently. However, support came in for the market at just below that level and a strong close meant that after some steep declines the Euro only ended up down 0.16% for the week.

From last week “The pound has remained in a tight range spanning only a couple of hundred pips for the past few sessions and may be gearing up for a move, with the odds slightly favouring a break in the direction of the long term trend, which is down.” The pound did break down and fell all the way to $1.5336, which is the lowest level for the pound against the dollar since May last year. The trend remains down for the pound but there was a good recovery on Friday as the lows for the day were strongly rejected. The current range now looks to be between $1.53 and $1.58.

Interest rate futures

Interest rate futures were lower for the week again as the recent uptrend may be running out of steam. The 10-year T notes fell through support at 117 which we wrote about last week but recovered slightly on Friday and the trend is neutral. The 30-year Treasury Bonds remain the weakest of this sector and still look the most likely to break down first for a larger move lower. For now this market is hovering just above short term support

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Kind Regards

Robert Stewart