This past week equity markets rose as the underlying S&P index climbed 2.20 %. Above, the September S&P futures contract rose 1.92% for the week. During this rally we were able to step-in for a quick day-trade on Tuesday and a 3.4% gain.
Moving forward we still believe bias remains strong, for a downward move and therefore, we are poised for a short-term downward move.
Oil made a big move this week on the back of tensions in the Middle East. The August contract, pictured above, was up 8.83% for the week. We are currently Long the August contract from $55.50.
Although, we believe the longer term trend in Oil is upward, it would not be surprising to see some consolidation occur this week. We will be looking to remain with our current trade, with an eye towards protecting our current open-profits.
It was an active week in the Gold market as the August contract, pictured above, moved up 4.14%. This move was in conjunction with a rise in world tensions. We entered three trades this week in gold with the first two being closed-out at break-even while the third resulted in a 7.5% gain.
We like the strength Gold has been showing recently and we are looking for continued strength in the week ahead.
Agricultural futures were Flat to Lower this week as September Wheat, pictured above, was off -2.08% and November Soybeans climbed a very modest .42%. We were not active in these markets this past week.
Going forward next week, we are looking for further declines as the spring planting season gives way to the summer growing season.
We enter the week Flat in all markets but are watching the following opportunities:
Gold has begun to show signs of life lately with resistance levels being approached which have been in place since 2014. We entered a nice trade earlier in the week and will continue to look for opportunities on the upside. In the immediate future we are looking for a break above 1361 to re-enter.
We will continue to watch the Agriculturals for trades as the US planting season continues. Currently we are looking for a break above 529 to go Long or a collapse below 487 to enter a Short trade.
We believe the S&P will continue to be volatile as it is lead by headlines and tweets. Although it may show temporary signs of strength, our models have the S&P breaking below 2830 in the not too distant future and therefore we are favoring Short S&P trades over Long ones at this point in time.
The month of May was an active one across many of the markets we trade.
S&P Amid continued uncertainties, stock markets remained volatile. These uncertainties are due in part to trade uncertainties and increasing skepticism that the current ‘Bull Market’ (I put this in quotes because I believe we are no longer in a bull market, but that is a story for another day.) will continue. Over the past month the S&P June contract declined 6.65%.
US Treasury Bonds
Amid the uncertainty, investors are clearly seeking the security of the US Treasury market. US 30 year (June Contract) rose 4.63% in May.
Light Sweet Crude
Crude lost 14.95% (July 2019 contract) as initial supply concerns eventually gave-way to nervousness over trade uncertainties.
Flooding in the US midwest has delayed planting and therefore created concerns about this years supply of Soybeans, Corn and Wheat. We have concentrated most of our trading on the Wheat market (July 2019 Contract) this month which rose 16.98%.
During the month of June we will continue to watch for opportunities in these markets as well as Gold which has been heating-up recently.
Amid uncertainty regarding talk of trade tariffs, the S&P remained range-bound this week. My system had me remain out of the market this week, awaiting the emergence of market conviction in either direction.