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BOOK YOUR FREE STRATEGY SESSION NOW >>It hasn’t been a busy week for the markets, with five-day returns of little consistency for both equity and bond indexes. On the other hand, the performance of crude oil and its derivatives was interesting, with five-day returns of more than +6% for Gasoline and Heating Oil.
Positive returns also for Bitcoin, which continued the bullish trend that began last week and closed above $21,000.
To learn more about how the markets are moving and the volatility trend, don't miss our weekly overview!
Enjoy the video!
Hey everyone and welcome back! One of the coaches at Unger Academy here, and this is our usual chat that we have every weekend to look together at the market trends over the past week.
Alright, so it hasn’t been a particularly busy week in the markets, except for one particular asset class: energy.
As for equity futures, we see negative movements compared to the last week, but they aren’t particularly significant.
The worst is the Mini SP 500 with -1.80%.
Things look a little better on the European stock exchanges. And we know that they have been outperforming the U.S. market for quite some time.
Quite well for the Nasdaq, losing -0.85% right now.
The historical volatility of the indexes is at its lowest.
So, we have low percentile values both in the short and the long term.
As far as the bond market is concerned, a little to report here.
Movements are pretty much close to zero. The T-Bond is up +0.07%, so basically unchanged from last week, and so are the other bond futures, the U.S. 10-year bonds, and the European 10-year bonds.
On the other hand, however, the energy market is showing signs of life!
Oil derivatives, in particular, are rising. Gasoline is the up the most with a +6.50%. And it’s currently approaching November highs.
Crude Oil still gains +3% this week, and Heating Oil is up +6.22%.
On the other hand, Natural Gas is performing poorly, and it continues its strong bearish trend.
This is now the third week that we’ve seen double-digit negative returns for this market, and we see that we have a -10.36% this week.
There is not much to say about the Metals sector, except for a -4.50% in Platinum.
However, the other metals are continuing to perform well.
Silver is up almost +30% on a three-month basis.
We see a +27% up Copper.
However, this week, as you can see, they moved very little.
The whole meat market was negative this week.
Lean Hogs performed the worst with -2.63%. It has been showing a decidedly negative trend for several weeks, as the other meat-related futures.
Regarding the soft commodities, we have got Cotton at +4%, although it doesn't seem to have taken any real direction. It appears to be consolidating within this trading range.
And then we have a slight rebound in Coffee, which had lost a lot in the last few months, and this week gains 2%.
Grains also recorded some minor movements.
Soybean Meal that lost -1.80%, a return that is not that significant.
In the foreign exchange market, we’re seeing a recovery in the U.S. Dollar against all other currencies, except for the British Pound, which is up +1% this week.
The Euro-Dollar right now is at 1.0848.
Signs of life also from Bitcoin, up +10.33% this week.
This is the second week in a tow in double-digit positive returns for Bitcoin. Let's see what happens.
And as you can see, there is a substantial gap, a sign that the bulk of this movement occurred within the weekend.
Let's just keep in mind that Bitcoin futures are closed in the weekends, while the actual crypto market trades 24 hours a day Monday to Sunday.
And this is certainly an excellent rebound for Bitcoin, which managed to reach this important level again.
It broke it hard and seems to have changed direction, at least for the moment.
Let’s now take a look at the implied volatility term structure.
In this chart, we have the classic VIX, so the one-month volatility of the SP 500, and it's the yellow line.
And we see all other volatilities calculated on different time frames: we've got nine days, one month, three months, nine months, and one year.
As you can see, the term structure is currently in contango. In other words, the short-term volatility is lower than the long-term volatility.
That is a sing of health for the market, or at least it suggests that there's no panic in the markets on the part of financial traders.
We also see a VIX that, even though it’s been a bad week for the equity indexes, it’s still at very low levels when we compare them to the levels of the last six months.
So, at the moment, there is no particular fear among traders about the future performance of the stock indexes, which is great.
Alright, let's turn now over to the rollover calendar scheduled for next week.
It starts on January 23 with the rollover on the Natural Gas future.
And then will be followed by cryptocurrencies on the 25th, then Bitcoin and Ethereum.
And finally, on the 26th, the rollover on Gold futures.
Alright guys, I want to leave you with just some advice quickly. If you are interested in systematic trading, I recommend that you go and click on the link that's in the description of this video. Through this link, you can view a free presentation by Andrea Unger, who will introduce you to his trading method with which he managed to win the World Cup Trading Championships four times. You can also get the best seller "The Unger Method," covering only the shipping costs, or you can even book a free strategy consultation with one of our tutors.
And with, guys, that's all for today!
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Alright guys, have a fantastic weekend and we look forward to seeing you again next week! Bye bye for now!
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 >>Andrea Unger here and I help retail traders to improve their trading, scientifically. I went from being a cog in the machine in a multinational company to the only 4-Time World Trading Champion in a little more than 10 years.
I've been a professional trader since 2001 and in 2008 I became World Champion using just 4 automated trading systems.
In 2015 I founded Unger Academy, where I teach my method of developing effecting trading strategies: a scientific, replicable and universal method, based on numbers and statistics, not hunches, which led me and my students to become Champions again and again.
Now I'm here to help you learn how to develop your own strategies, autonomously. This channel will help you improve your trading, know the markets better, and apply the scientific method to financial markets.
Becoming a trader is harder than you think, but if you have passion, will, and sufficient capital, you'll learn how to code and develop effective strategies, manage risk, and diversify a portfolio of trading systems to greatly improve your chances of becoming successful.
