Stocks

Stock indexes were lower for the week across the board, with several indexes either breaking or heading towards support levels. The S&P 500 did continue lower, falling through 1325 support but just holding on to the 1316 level. That level may well be tested next week and if support fails then we may see further declines to 1290.

As we wrote last week the long term trend remains up for the indexes with the exception of the Nikkei, which remains the weakest of the indexes and still the most likely to break down first, but there is good support for the Nikkei between 9335 and 9400.

Commodities

Gold edged lower at the start of the week but then bounced exactly off the long-term trendline that we wrote about last week that has been in place since the February lows at $1310. Gold ended the week ahead by 1.02% having retaken the $1500 level. There are now 2 trendlines in play that may provide support around the $1480 level. The long-term trend remains up but a break above $1526.80 will be needed if the uptrend is going to resume.

Crude ended the week slight lower having tried twice to regain the $100 level. We wrote last week about support around 9500 and the fact that buyers are coming in around that level as evidenced by the long lower shadows on the daily charts. We saw a couple more long lower shadows on the daily charts this week as 9500 continues to provide support. As before, these lower shadows continue to bounce off the long-term trendline, which currently sits just above 9500.

Currencies

The dollar index initially continued higher, moving above 7600 for a second time but once again being unable to stay above that level. If the index can regain and close above 7600 the next target will be resistance from the shooting star pattern formed on 1st April.

After initial dollar strength over during the past week, the dollar ended down against most of the majors, with the main exception being the Japanese yen. This was more due to yen weakness than dollar strength.

Holding up better than most of the major currencies are the Swiss Franc and the New Zealand dollar. The Franc has continued its recent long-term uptrend against the dollar and is still close to all time highs. The New Zealand dollar recovered well from early weakness to make new 2 week highs and may yet have another go at the highs of the year at 8100.

Interest rate futures

Interest rate futures continue to edge higher in line with the long-term trend. The 5 & 10 year notes and the 30 year bonds all hit new highs for the year during the past week. The long-term trend remains up across the sector.

Kind Regards

Robert Stewart

Stocks

The S&P 500 ended the week flat but had been higher during the middle of the week. We may now see a test of short-term support around 1325.

The Nasdaq 100 ended the week marginally lower, but as with the S&P 500 is heading lower towards short term support. If support around 2364 fails we may see a continuation lower towards 2300 and possibly as low as 2250.

The Germax Dax also ended the week marginally lower but is slightly further above short term support than the Nasdaq 100 and S&P 500. The Dax may also benefit from support from the rising window around the 7280-7290 area. The long term trend remains up for the indexes with the exception of the Nikkei, which remains the weakest of the indexes and the most likely to break down first.

Commodities

Gold continued to push higher from support at $1460 and crossed $1525 briefly on Wednesday before moving lower again with a bearish engulfing pattern. The volatility in this market continued as we then saw a hammer pattern form on Thursday's candle, which is a bullish reversal pattern, especially is the low of the hammer bounced off the long-term trend line, which has been in place since the February lows at $1310. Friday did not see a continuation higher though from the hammer and we may see another test of the trendline this week. The long-term trend remains up.

Crude continues to find support around 9500, and actually ended the week higher, forming a bull harami pattern on the weekly charts. The market looks to be groping for support around 9500 as evidenced by the long lower shadows seen on a few of the recent daily candles. These lower shadows have also bounced of the long-term trendline, which currently sits just above 9500.

No leaded gasoline futures fell 10 percent in only 2 days after the US saw its first rise in gasoline inventories for 11 weeks, as the energy markets remain highly volatile. For now the long term trend remains up across the sector, with the exception of Natural Gas.

Continued weakness has been seen in the grains sector, where most of the markets have continued lower with a handful of the markets in this sector declining sufficiently to give a long term trend change to down.

Currencies

The dollar index continued higher from the prior week and tested the 7600 level that we wrote about last week. In the short term things are looking better for the dollar but there are still a lot of traders that remain short the dollar and much of the recent rally may be down to some of those short trades being unwound. If the index can continue higher above 7600, the next targets will be 7687 and then 7767. The long term trend however is still very much down and further strength will be required before that changes.

Interest rate futures

Interest rate futures ended the week slightly higher, and each of the 4 markets that we trade hit new highs for the year with the exception of the short term 3 month Eurodollar. The long term trend remains up across the sector.

Kind Regards

Robert Stewart

Stocks

The S&P 500 sold off quite steeply during the first 4 days of the week and moved back below the neckline of inverse head and shoulders pattern that we have been writing about recently. Friday's candle pattern is a bull harami on the daily charts. This is not a reversal pattern but indicates instead that the selling is starting to wane, to lose momentum. It is not unusual for inverse head and shoulders patterns for the market to return and test the neckline again before continuing higher. This may lead to a move back above the neckline and a continuation of the longer term pattern higher, especially if we get a close back above 1350 ealry in the coming week.

The Nasdaq 100 remained more bullish than the other US indexes and is holding above support provided by change of polarity from the highs earlier this year and there are further support levels all the way back to 2300.

The Germax Dax also recovered from the selling during the first part of the week, forming a hammer on Thursday's daily bar and then breaking back up above the highs posted back in February. This may yet lead to another test of the local top.

Commodities

Commodities had one of their largets sell-offs in recent years during the past week, with huge moves lower in the metals and energies. This was largely triggered by Silver, which had been unable to clear the $50 level and a sell-off followed across many markets. Commodities however remain in a long term bull market in spite of the recent selling although last week's selling has led to a long term change of trend for several commodity markets to down.

Gold also underwent heavy selling but found some support at $1460 and formed a bull harami pattern on Friday, which indicates that the selling momentum may be waning. The long term trend remains up.

Currencies

The dollar index halted recent declines and did not reach the 2008 lows at 7070, which was the downside target for many. Instead we saw a move higher on Thursday and Friday, which may continue higher to test resistance at 7600.

The Euro failed to reach the $1.50 level and after a change in expectations for future rate hikes for the Euro, a two day sell-off ensued with the Euro ending lower for the week by 3.35%. The long term trend remains up for now but the market looks set to test support this week.

Interest rate futures

Interest rate futures have continued to rise over recent weeks and the short-term strength has continued to push this sector higher to new highs for this year and to a long term change of trend to up.

Kind Regards

Robert Stewart

The long term trends have remained unaffected and these are still up for stocks, down for the dollar (how long have we been saying that!) and up for commodities. The dollar has in fact been in a long term downtrend by our measures for the majority of the past 8 years.

Stocks

The S&P 500 remains at a critical point, testing exactly the highs of the year this week before falling back and forming a shooting star pattern on the daily charts. This is a reversal pattern which confirms resistance at the highs of the year, so we may see a pullback before the market continues higher. A close above 1337.5 would lead to a bullish scenario.

There is also a possible inverse head and shoulders pattern forming on the S&P 500 and a break of the neckline would also point to a continuation higher towards 1430. However, confirmation is required and we don't have the yet.

We wrote last week that the Nasdaq 100 needed to take out the highs at 2357.5 to avoid slipping back and the market did move beyond that level this week. We may now see a test of the highs for the year and a resumption of the long term uptrend. To an extent much will depend this week on how the S&P 500 reacts and whether it can clear and close above the highs of the year.

Commodities

We have been writing for several weeks about our target for Gold at $1500 and it finally hit that this week and even closed above it ahead of the Holiday weekend at $1503.8. Silver also continues to blast higher, setting new 31-year highs and now looks set for $50 as the metals sector continues to be bullish, with some of the other metals also starting to push higher.

No leaded gasoline continues to lead the way in the energy sector, once again making new highs since July 08. Crude also advanced for the week but heating oil was slightly lower and is now the weakest of the 3.

Currencies

The dollar index tested the 2009 lows at 7417 that we wrote about last week and initially went lower to 7393.5, a new 16 month low, before recovering slightly and closing the week out at 7418. The trend remains very much against the dollar and may yet continue lower.

After heavy selling on Monday, the Euro regained the losses quickly and went on to make new highs, taking out our target at $1.4550. The Euro then closed at $1.4555, just above prior resistance, which may now act as support due to change of polarity.

The Aussie dollar continues its sharp ascent and was higher for the week by another 1.78%, making new 30-year highs once again. The New Zealand dollar has continued its amazing run, with 21 up days from the past 25.

Interest rate futures

Interest rate futures were lower across the board having initially been higher during Monday's trading. The markets are now in the middle of the current short term trading ranges but the long term trend remains down.

Kind Regards

Robert Stewart

As before the dollar remains in a long term downtrend, stocks remain mixed and the trend for commodities is still mostly up.

Stocks

The S&P 500 once again failed to take out the highs of the year at 1337.5 (June contract) and now has the possibility of developing into a double top. We wrote last week that failure to take out resistance may lead to a decline to 1300 and the market actually fell to 1298.5 before recovering to 1318. Therefore we now have a short term range between 1298.5 and 1337.5 and a break of either could give rise to a decent move in the direction of the breakout.

Nasdaq 100 ended the week for a second straight week and as before the potential for lower highs remains. The highs at 2357.5 will need to be taken out soon otherwise we will likely see a move lower, possibly down to 2200.

Commodities

Gold advanced again, this time making new all time highs and still looks set for our target of $1500. The only possible spanner in the works is the hanging man pattern on the weekly chart, which is a bearish pattern and in this instance may end up confirming resistance between last week's all time highs and $1500.

Silver also continues its impressive run with a twelfth straight week of gains taking the metal to new 31 year highs. Unlike gold, there are no reversal patterns so far indicating tiredness in this market.

Crude initially posted new highs since 2008 but fell short of our target at the September 2008 highs at $115.09. No leaded gasoline is now the strongest market of the sector and is now at its highest level since July 08.

There has been some weakness in grains over the past week with Soybeans in particular groping for support at just above the 1300 level, as evidenced by a few long lower shadows on the daily charts.

Currencies

The dollar index fell to new 16 month lows during the past week and the downside target is still the 2009 lows at 7417. The Euro ended the week flat having stayed in a fairly tight range over the past week. The upside target at $1.4550 remains in place but so far $1.4500 has held firm.

The Aussie dollar managed another week of gains, albeit relatively small ones but we have a new high close again in this market. The New Zealand dollar has continued its amazing run, with 19 up days from the past 21.

Interest rate futures

Interest rate futures reversed over the past week making a counter trend move as traders looked for the safe haven of gold and bonds. The long term trend however still remains down in this sector.

Kind Regards

Robert Stewart

The current long term trends remain very bullish for commodities, equally bearish for the dollar and mixed for stocks.

Stocks

S&P 500 and Nasdaq 100 continue their long term uptrends. The S&P 500 made highs for the week at 1336.4, just below the highs of the year at 1337.5 (June contract) that we mentioned would be crucial last week. We therefore still have the same scenario as last week where a breakout and close above new highs for the year would give a new long term upside target of 1433.5 and conversely if resistance holds we could see a pullback towards 1300 if resistance holds.

Nasdaq 100 ended the week lower by 0.88% and may still yet be setting up for potential lower highs, which would be bearish. We have highs at 2357.5, 2373 and the highs of the year at 2398 (June contract), which will all provide resistance. If the first of these lower highs at 2357.5 holds then we may see a correction lower.

Commodities

Gold advanced 3.16% for the week having cleared the $1450 level that we have been writing about recently and now looks set to continue higher towards our target of $1500. Silver has also continued sharply higher, rising in 10 out of the past 11 weeks and passing the $40 level in the process.

We wrote last week on Crude that $110 looks like the next target and that was reached and then easily surpassed with the next target being the September 2008 highs at $115.09. No leaded gasoline and heating oil have also continued higher in extremely bullish fashion and may also target the 2008 highs over the coming weeks.

Corn on a cash price basis broke the previous high set back in 2008 during the food crisis, leading corn futures to surpass $7.70 a bushel, with new highs set at $7.73. Grains are looking bullish again having recovered from the recent sell-off.

Currencies

The dollar index broke out of the range we identified last week between 7550 and 7700, making a new contract low at 7506 in the process and closing slightly higher at 7527. The next downside target will be the 2009 lows at 7417.

We wrote last week about risk appetite benefitting the commodity-based currencies of Australia, Canada and New Zealand and we have seen all 3 of those currencies advance this week with the Aussie rising to another 30 year high.

The ECB led the way with interest rate rises and this helped the Euro clear the $1.42 resistance level that we have been writing about of late and we may now see a continuation higher towards $1.4550.

Interest rate futures

Interest rate futures have begun heading lower again, resuming the long term downtrend. As before, the longer term interest rate futures markets are leading the weakness. The lows of the year at 11515 will be the downside target.

Kind Regards

Robert Stewart

Stocks

The S&P 500 and Nasdaq 100 continue their long term uptrends. The S&P 500 has ended the week right on resistance but looks as though it could be making a very bullish set up, especially if we see a break through resistance at 1327 (where the index currently sits) and then more significantly at the highs of the year at 1337.5 (June contract). We wrote last week that US markets in particular may continue higher and take out the recent lower high before testing the multi year highs and that is right where we sit at present. If we do get a breakout and close above new highs for the year that would give a new long term upside target of 1433.5, which is arrived at by taking the lows of the v shaped pattern at 1241.5 to the highs at 1337.5 and adding the difference. Conversely, resistance is present here and we could equally see a pullback towards 1300 if resistance holds.

Commodities

Gold continues to target $1500 but will first have to clear resistance at the current all time highs at $1450. Silver continues to fare better than gold and has once again broken out to new multi year highs and continues to lead the way for the metals, rising in 9 out of the past 10 weeks.

We wrote last week on Crude "The last 2 daily bars are doji, which many mistakenly believe are reversal signals. This is not the case, doji are merely an indication of indecision and that the ultra short term trend (2-7 days) has switched to neutral from up and that the market is currently pausing for breath. A test of the recent top at $108.25 on the May contract may yet follow." What followed is evidence of what we wrote previously and May Crude rose to $108.23, just 2 cents shy of the recent top, but we do have a new high close and $110 looks like the next target.

Currencies

Overall the dollar has continued with recent weakness even though we did see an attempt to push higher for the dollar index, which was rejected. We now have a short term range between 7550 and resistance at 7700, with the long term trend still very much down.

Risk appetite seems to be back on the cards and this has favoured a return to the commodity-based currencies of Australia, Canada and New Zealand and has also led to new weakness for the Yen. The expectation is that other Countries other than Japan will soon be raising rates, so this makes the Yen less attractive.

Interest rate futures

Interest rate futures ended the week pretty flat having recovered from being lower earlier in the week. The long term trend remains down for the interest rate futures sector with the exception of the short term markets, where the trend is still up.

Kind Regards

Robert Stewart

The long term trends are still as they were, which is mixed for stocks (up for US indexes and down for the rest), still down for the dollar and up on balance for commodities.

Stocks

We wrote last week that the S&P 500 and Nasdaq 100 had held up better than other indexes and that they still remained in long term uptrends according to our indicators. How long this continues to be the case for remains to be seen but considerable further weakness will be required before we get a sell signal in these 2 indexes.

What however may prove to be significant if the short term rally stalls in the near future as that we would be having another lower high to add to the previous lower high since multi year highs were seen earlier in the year. This is a possible bear market set up. If we do see the current rallies stall before taking out the prior lower high then we may see another move lower to test the recent low. It is also possible that the US markets in particular will continue higher and test take out the recent lower high before testing the multi year highs.

Commodities

Last week we wrote that we may yet see another go at all time highs in Gold and we did during the past week. Gold has since come off a bit but the trend is still firmly up and all pullbacks have been met with buying. The next upside target will be around the $1500 assuming support around the $1400 area. Silver continues to fare better than gold and has once again broken out to new multi year highs and continues to lead the way for the metals.

Crude had a good week, as did the other energy markets. Crude rose higher and is now not all that far from the recent highs, and Friday's close is only a whisker shy of the highest weekly close in this market since 2008. Clearly then the long term trend is still up as is the case for the short term trend. The last 2 daily bars are doji, which many mistakenly believe are reversal signals. This is not the case, doji are merely an indication of indecision and that the ultra short term trend (2-7 days) has switched to neutral from up and that the market is currently pausing for breath. A test of the recent top at $108.25 on the May contract may yet follow.

Currencies

The dollar index fell to new lows early in the week but has since recovered. However, the long term trend is still very much down for the index and this will continue to be the case for the foreseeable future. The short term trend is also down and this will continue at least until we see a break of 7800.

The Australian dollar broke out past the recent highs and has now posted new 30 year highs, leaving the aussie in very bullish territory with good short term support at around the $1.0050 to $1.0075 level should we see a pullback.

Both the Pound and the Euro rose to their highest levels against the dollar since January 2010 but both have since pulled back from those highs. The trends however remain up for both markets.

Interest rate futures

We wrote last week that considerable further strength will be required for a long term trend change to up for the longer term interest rate futures markets and this continues to be the case. The past week has seen a decline for interest rate futures in the direction of the long term trend. Further weakness will also be required before new short signals.

Kind Regards

Robert Stewart

This has led to some decent moves in many markets with stock indexes, at least as far as our indicators are concerned ending the rally, at least temporarily.

The long term trends for the markets are intact and longer term most markets still look good. The trends are up for stocks and commodities and down for the dollar and interest rate futures.

Stocks

As we covered in the introduction, the rally in stocks has come to an end at least temporarily. Longer term the trend is up for the indexes and the markets still look good, but there is definitely short term weakness.

The S&P 500 fell to a 5 week low but once again we have fairly long lower shadows on the weekly charts which still show the markets rejecting the lows and there being buying demand around the 1290 level (March contract). This may lead to another move towards the recent highs but should the markets fail to find support there we may see a considerable sell off.

Commodities

Gold posted new all time highs on Monday at 1445.7 on the April contract but then moved lower for 4 days before some buying demand returned on Friday. Support has twice come in this week around $1400 and that will be a key level moving ahead. As long as $1390-$1400 holds then we can expect to see another go at all time highs.

May Crude hit new multi year highs on Monday and then sold off for the rest of the week, which is possibly the opposite reaction to current events than many would expect. Friday saw a decline almost to the $100 level on the May contract before the market recovered some of the losses. The trend is still very much up for the energy sector and if further weakness is seen, good support may come in around the $96 level at which point the market may resume the uptrend.

Currencies

We wrote last week that the dollar index may target support at the November lows at 7617 and that is almost exactly where the market fell to. From here the market did find some support and has pushed higher but ran in to resistance and has since pushed lower. The trend remains very much against the dollar and we may see another test of the lows at 7617, which were last week's lows and the lows of the bullish engulfing pattern formed back in November.

The big currency move for the week came on Friday, with the Yen pushing sharply higher against the dollar. This may lead to a test of the recent lows where the dollar has been forming a base against the Yen around the 8150 level. The trend is firmly down for the dollar.

Interest rate futures

The long term trend remains down in all of the interest rate futures markets except the 3 month Eurodollar. The 3 month Eurodollar continues to push higher in line with the longer term trend, whereas the other markets are also pushing higher but against the long term trend. The shorter end of the markets look stronger and if strength continues the 5 year notes are the most likely to give a change of trend. That said, the 5 year notes may run in to some resistance around 11782. A break higher through there may lead to further strength.

Kind Regards

Robert Stewart