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BOOK YOUR FREE STRATEGY SESSION NOW >>European stock indexes continue to outperform U.S. indexes this week. Indeed, the bullish movements in the EuroStoxx and the Dax contrasted with the negative returns in the Nasdaq and the S&P 500.
On the other hand, both European and U.S. bonds were up, and the same applies to metals, which seemed to continue the bullish trend of the last months of 2022. Difficult week for the energy sector and some commodities.
To learn more about how the markets are moving and the volatility trend, don't miss our weekly overview!
Enjoy the video!
Hey everyone! Welcome back, Happy New Year, Happy 2023 to everyone! One of the coaches at Unger Academy here, and this is the chat that we have every weekend about the market trends over the past week.
Alright, so we can say that the European stock indexes had a bubbly start.
We immediately see an excellent start in this 2023 for the EuroStoxx. The Dax has also been doing well, up almost +4%.
A little further behind… or much further behind, the U.S. stock markets. Negative returns for the Nasdaq and essentially on par for the Mini SP 500.
Three-month returns: we immediately see the difference between the -6% of the Nasdaq and the +18.76% of the EuroStoxx. That’s an uncommon thing. I’d say it’s the first time we’ve seen such a big difference in performance between the European stock markets and the U.S. stock markets, which are usually a little bit ahead of the European stock indexes.
On to the bonds market, we see positive returns for both U.S. and European bonds. But again, Europe has the upper hand. We have a Bund that’s up +2.80%. So, definitely a good start for the Bund. You see the T-Bond, up by +1.56% and is also doing well. A little further behind the U.S. 10-year bond at +0.72%.
The energy market suffered the biggest losses this year so far. The worst performer is Natural Gas, which has been on a downtrend for several months. Heating Oil has also performed poorly. Crude Oil looks a little better at -4%. And the one that performed a bit better is certainly Gasoline.
Let's take a look at the metals. We see positive returns except for Silver. We have a +1.96% for Platinum. All metals are in an uptrend. Let's just take a look at the three-month returns: +14, +17, +11, +6. Only Gold is a little further back, but it’s close to its recent highs, which it crossed this week.
Bad performance for the Livestock market, especially Lean Hogs, -7% in the last five days.
On to soft commodities, and there we see mixed results. In particular, there’s a -5% to report for Sugar. So, Sugar is at -5%, a nice downward trend. And -4.80% for Coffee, approaching its recent lows.
On to the Grains, we see negative returns, with the exception of Soybean Meal, which is perhaps the strongest market amongst the grains. We see five-day returns at +3%, one-month returns at +6.70%, three-month returns at +22%, and one-year returns at +37%. The others, as I said, are all negative. In particular, Soybean Oil, another soybean derivative, is down -5.54%.
We have a strengthening US Dollar on the currency front, especially against Euro this week. The last value reached is 1.0579. And also, against the British Pound.
Alright, finally, crypto. Bitcoin is up +2.16%. And we see that Bitcoin is losing some volatility at the moment. We haven't seen double-digit weekly returns for quite some time. So we are certainly still dealing with a weak market. And right now, there’s no sign of the market recovering.
It’s also true that we’re approaching the halving of Bitcoin. It will still take some time, but who knows, maybe 2023 will be the year of recovery for the cryptocurrency market. We wait and see.
Let’s also take a look at the volatility of the stock indexes. In particular, we see very high volatility in the EuroStoxx and Dax on a one-month time horizon. We see historical volatility levels close to the last month’s highs precisely because of the solid bullish movements that we’ve seen.
In contrast, volatility is much lower in the Nasdaq and the Mini SP 500. However, on an annual basis, we find relatively low volatility levels, especially for the Nasdaq and the Mini SP 500. A little bit higher, especially for the EuroStoxx.
Now to the implied volatility term structure, we are in contango, except for the nine-day VIX that is a little bit higher than the one-month VIX. Otherwise, the volatility structure shows no sign of anomalies or tensions.
We do know that this is an excellent indicator of traders’ fears about the immediate performance of equity markets. So with that said there's nothing special to report at the moment.
Let's also go and take a look at the VIX. The last value reached was 22.13. This is abundantly in the lower range of values reached in the last year.
Alright. On to the rollover calendar. Next up is the rollover of the VIX future, which we know usually rolls over a week before expiration, so as early as January 12 we'll be able to rollover this future. Crude Oil will follow the week after that.
Okay guys, that's it for today. Thanks so much for watching.
Before we say goodbye, I want to remind you that if you’re interested in systematic trading, you can watch a free presentation by Andrea Unger. We’ll leave a link in the description of this video. And in that presentation, Andrea Unger explains his trading method that allowed him to win the World trading championships 4 times. You can also get the best seller "The Unger Method" by just covering the shipping costs, or you can even book a free strategy consultation with a member of our team. So, please, do yourselves a favor and take advantage of that!
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With that, have a fabulous weekend everyone, and we will see you 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.
