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BOOK YOUR FREE STRATEGY SESSION NOW >>The downward trend in the European and American stock markets continues this week, with the Meat sector also posting negative five-day returns. Also down, surprisingly, is the price of U.S. Natural Gas, while European gas is up only slightly considered the current situation.
Also of interest is the recovery of the Euro and British Pound against the US Dollar and the rise in Metals, which are finally showing positive five-day returns after a long slide.
For more information on market performance and volatility trends, check out our weekly overview.
Enjoy!
Hey everyone and welcome back! One of the coaches at Unger Academy here, and this is the usual weekend chat about market trends over the past week.
Alright, so guys, needless to say, I'm sure you know it’s been another bad week in the markets.
As far as the stock indexes are concerned, the markets have only gone down since mid-August, with a tiny exception in early September.
And as we can see from the performance of the indexes, the Nasdaq is down 1.67%.
The Mini SP is down almost 2%. The Dax is down 2%. The Eurostoxx50 is down 1.76%.
Well, another week of declines. The market tested the previous lows and even broke them slightly.
At the moment, it looks like the trend is continuing in that direction. So, we'll see at the end of the day whether this support will be able to hold or whether, as the price action seems more likely at the moment, prices will break below the mid-June lows.
The bearish tendency in the markets has led to a slight increase in volatility, which I’d like to point out is in the mid to high percentile range for both the short and long term.
As far as the bonds market is concerned, we also have declines in the T-Bond. Although this market seems to be showing a reaction in just the last three days.
Slightly positive returns for the U.S. 10-year bond, and negative returns for the European Bund again, which is losing about 0.50% right now.
Among the markets that have gone up, we have, in the energy sector, Crude Oil, which is up by 0.64%. Gasoline performed well at +2.80% and Heating Oil at +1.78%.
On the other hand, Natural Gas continued to fall despite the news of the week, namely the explosion of the Nord Stream 1 and 2 pipelines, which caused an increase in the price of European gas, but not even a particularly significant increase.
Here we can see the 5-day trend for European gas. You see, it's a little bit higher than last week, but the price increase isn't as massive as one might expect after what happened over the past few days.
Let's move on to the metals sector, which has bucked the trend this week. And this is the first positive week in a long time, I'd say. We do know that it's a pretty weak asset class. The most significant gains have been in Copper.
Gold is up 1.28%, with minor increases in Silver and Platinum.
Instead, we see a significant drop in the Meat asset class.
Lean Hogs is losing 6.5% right now. Declines also occur in Live Cattle and Feeder Cattle.
Soft commodities, on the other hand, are showing mixed returns. We have +4% in Orange juice, which has broken through recent highs.
Cotton instead is down -8% and has returned to its mid-July lows.
Finally, let's turn to the Grains market, where we also see some mixed returns. Soybean Meal, lost 3.4% this week
Otherwise, there are no particularly significant movements.
Turning instead to currencies, we’re looking at a rebound in the Euro against the US Dollar. In the last three days, we've seen a bit of a reaction and, therefore, a strengthening of the Euro against the US Dollar, which is still at a reference price of 0.98.
Also bucking the trend this past week is the British Pound, which is currently worth 1.11 against the US Dollar.
Moving on to Bitcoin, it is currently at about the same level as last week, with a slight increase of just 3.34%, so it is still close to the support level.
Given the data that has been reviewed, and specifically the performance of the equity indexes since the beginning of the year, which have certainly been showing a relatively strong bearish trend,
Well, I'd expect to see exceptionally high implied volatility values and especially a volatility term structure that is in backwardation, whereas we're seeing a mixed structure at the moment. There is volatility compression, and more or less, all volatility indexes on the SP 500 are showing similar values.
VIX is indeed at the upper end of the range of values that have been reached since the beginning of the year until now. We have a peak of about 39, and right now, the value is at 31. But with such a steep decline, I would have expected to find much higher values and a volatility term structure in backwardation.
Alright, let's go take a look at the rollover plan scheduled for next week.
Well, I can already tell you that there’s nothing scheduled for next week, however, the next rollover is after the VIX Future expires on October 12.
Well, guys, before I say goodbye, I want to remind you that if you're interested in systematic trading, you can watch a free presentation by Andrea Unger (I’ll leave the link in the description) where Andrea Unger explains his trading method, which helped him win the World Cup Trading Championships in real-money trading 4 times.
At the same link, you can also get the best seller "The Unger Method", covering only the shipping costs, or book a free strategy consultation with one of our tutors. So, please, do yourselves a favor, take advantage of it!
And that's it for today guys. Thanks so much for watching.
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And with that, I will see you again next week! Have a fantastic weekend, 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.
