LS Trader Weekly Update – Monday 13th February 2012

The past week has seen stocks and the dollar end the week relatively flat although stocks did rise to new highs for the year. The trend for the dollar remains up overall and commodities remain mixed.

Stocks

For the past several weeks we have been writing about our 1355 target on the March S&P 500 and this past week saw the market rise to 1352.3 before pulling back to close the week at 1340.6. This resulted in a small gain for the week of 0.11%. In spite of the small correction towards the end of the trading week, the S&P 500 remains in a bull channel and the trend is still up. The bottom of the bull channel is currently around 1325 and it will be interesting to see if that lower support line of the channel is hit this week and if it once again hits support.

Last week we wrote that resistance at 1355 can be expect ed but if it can be taken out we could see a move to the next target at 1385, and that still applies, especially of support at the bottom of the channel holds.

Commodities

Crude ended the week ahead but remains within the box range that it has been in for the past several weeks. The market remains above the 200 day moving average and the trend is still up so an upside breakout remains more likely although this would change on a break below $95.

Gold ended the week lower by higher by 0.86%. Last week we wrote that in spite of recent strength Gold was showing signs of a possible turn. We also wrote “The weekly bars show a doji, which at resistance can be a prelude to a turn, but the stronger signal comes on the daily charts where there is a large bearish engulfing pattern. This could lead to a move lower.” So far the move lower has been reasonably well contained but the long term trend doe s remain down. On the April contract there is resistance around $1770 but the next level of support is not until $1650.

Grains are not doing a great deal and the trend remains down. Most of the grains markets are showing numerous doji candles, which represent indecision. A break to the downside continues to look more likely.

Currencies

The dollar index did briefly fall through a short term support level but had regained it by the end of the week. Medium term support at 7800 is still holding so the medium term trend is still up for the indexs as is the long term trend. On the daily charts there was a stick sandwich support pattern followed by a bullish engulfing pattern on Friday so there is certainly some buying pressure coming in around 7850.

Last week we wrote that the British Pound looked to be heading for the 200 day moving average, at that point around $1.59, and that is exac tly where the pound reached before reversing and making a move lower. The trend remains down for the Pound and it may now be heading down towards the 50 day moving average around $1.56.

Interest rate futures

Interest rate futures ended the week pretty much flat but all of the markets had been lower earlier in the week. All of the markets did hold at short term support and the trend remains up across the sector.

Kind Regards

Robert Stewart

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