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BOOK YOUR FREE STRATEGY SESSION NOW >>Among the most eye-catching events of this week, there is the rise of Mini S&P 500, which set a new historical record, breaking through a significant resistance level.
The bonds had a bad week instead, as it generally happens when stock indexes grow. Energy markets (RBOB and Crude Oil in particular) and Cotton continue to do well.
Among the positive markets, there are also Cereals, Currencies, and Bitcoin, which broke its all-time historical highs.
If you're keen on knowing more about how the markets moved this week, check out our weekly summary!
Hey guys! One of the coaches of Unger Academy here and welcome to our weekly chat about what happened in the markets over the last 5 days.
So let's start with stock indexes. Here’s the chart of the Mini S&P 500, which managed to break all its historical highs this week. It’s a significant resistance level, so it was obviously quite difficult to break. By the way, let’s wait and see if, over the next few weeks, this upward trend will continue or not.
Then here’s Nasdaq, which has also been rising and recovered from its significant downtrend. It's still below its all-time highs but is getting closer to them.
As for European stock indexes - such as the DAX and the Euro Stoxx - they have been a bit weaker.
The bond market went significantly down, also due to the uptrend of the stock indexes. Among the bonds that went down the most, there are T-bond, the American thirty-year bond, and Bund, which, as you can see from this chart, is going through a clear downtrend.
The energy market is still very strong, although some markets went up and others went down. More in detail, RBOB has reached its highs and Crude Oil continues to rise, while Natural Gas and Heating Oil have been a bit weaker. By the way, this market has done pretty well lately, as we can see if we look at its one-month, three-month, and one-year returns.
As far as the metals market is concerned, as you know, it's been suffering quite a bit for several months. At the moment, it’s in a sort of trading range, and it’s still quite unclear which direction it’s going to take.
On the other hand, Silver is waking up. This week, it rose by 5%.
The Cattle markets were all negative, while there were contrasting trends in the Soft Commodities market. About two weeks ago, Cotton went up quite a lot, and at the moment, it’s still around those levels.
Then there are the Cereals, which went all up this week, and the Currencies and Bitcoin, which also went up.
I can tell you that right now, there's great excitement about Bitcoin and Cryptocurrencies more in general. In fact, these markets are expected to rise significantly by the end of the year. We'll also see if there is something like a Christmas rally for cryptocurrencies.
Meanwhile, in intraday, Bitcoin managed to reach almost $68,000. I'm talking about the future on Bitcoin, of course.
Let's now take a look at the historical volatility of stock indexes. Here's the Mini S&P 500. There's a slight drop in volatility, which is obvious, due to the markets’ uptrend, but as you can see, the ranges are all quite high. This is the reason why historical volatility hasn't gone down that much. On Nasdaq, for example, it remains at the fiftieth percentile over a one-month time horizon.
Over a one-year time horizon, it’s still very high, in fact as you can see it’s above the fiftieth percentile.
On the other hand, the structure of the implied volatility on the S&P 500 is the very opposite. These are the SPX volatility indexes, and as you can see, the term structure of implied volatility is in contango, which means that short-term implied volatility is lower than long-term implied volatility. This is the classic term structure of the stock markets when they are in a bull run and there isn't any turbulence going on.
We can also notice a decrease in implied volatility over the last 5 days. This is clearer on VIX, which is currently on the lowest levels of the last few months.
In short, we can say that there are no warning signs at the moment and that traders seem to be absolutely confident about the future performance of the stock indexes.
Now let's move on to the rollovers. Next week, the Heating Oil, Natural Gas, and Gasoline futures will expire. And I'd also like to point out that at the end of the month, on the 29th of October, the Bitcoin futures - both the full contract and the micro version - and the Ether futures are going to expire.
Okay guys, our weekly chat about how the markets moved over the last few days is over. If you'd like to know how we trade here at Unger Academy, following the method of the only 4-time world trading champion Andrea Unger, I invite you to watch our webinar. You can find the link for that webinar in the description of this video.
So will see you next time, goodbye everyone!
We'll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.
BOOK YOUR FREE STRATEGY SESSION NOW >>Hi, I'm Francesco Placci, a professional trader since 2005 thanks to the systematic approach to the markets.
My skills range from trading on index futures to bonds, from stocks to commodities, with a particular focus on volatility and options, which I consider to be among the most versatile and fascinating instruments available to traders.
After an experience with leading Italian credit institutions where I learned the basics of institutional finance, I became a successful independent trader, with great personal satisfaction.
Founder of Algoritmica.pro, in 2019 I joined Unger Academy as head of Research and Development.
