Markets: Nasdaq Jumps to New All-Time High

by Francesco Placci

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Over the last few days, the markets have been quite weak. However, there are still some interesting things that deserve to be mentioned. US stock indexes set new highs - especially Nasdaq – and Bonds, Cotton, and Cereals were also on the rise. 

On the other hand, the energy markets were all negative except for Natural Gas. The currencies also went down, except for Bitcoin, which is stable around last week's values. As for volatility, there was a decrease in historical volatility and a slight increase in implied volatility.

Want to know more about what happened on the markets this week? Then check out our video overview!

 

Transcription

Hey everyone and welcome! I'm one of the coaches of Unger Academy and this is our usual weekend chat about how the markets moved over the last five days.

So what happened on the markets over the last few days? Well, the most striking event of the week - which was quite boring, actually - is the new high set by US stock indexes. Here you can see the chart of the Nasdaq, which managed to break through all its past highs, and during the past 5 days, it gained over 2%. The other US and European indexes were also on the rise, from Mini S&P to EuroStoxx and DAX.

In the meanwhile, bonds also rose. As you may remember, during the previous week, they went down, but now they're rising again. So this week, both stock indexes and bonds were rising, which is quite unusual if you consider that sort of inverse correlation that exists between the stock market and the bond market.

Let's move on to the energy markets. As you can see, Crude Oil and its products took a little break this week, and they were all negative. On the other hand, however, Natural Gas continued to rise, touching levels close to its all-time highs.

The Metals are still negative. As you can see, after rising for about two weeks, over the last 5 days they started going down again, giving back most of their profits.

As for the Meats market, there's not much we can say. As you probably know, they've been in a trading range for some time now, and as you can see, their 3-month returns are all very low.

And the same goes for Soft Commodities. The only future that's worth mentioning in this category is Cotton. After a strong rally and two weeks during which it was sideways it resumed rising and getting closer to its recent highs again this week.

On the other hand, the Cereals market is positive, and we can see positive returns on all the futures that belong to this sector, except Bean Oil. One of the most interesting futures here is Corn, which over the last 5 days made +5%.

Finally, here are the currencies. This week, they were all negative except for the Australian Dollar and Bitcoin, whose values are basically the same as last week's.

Let's talk a bit about volatility. As you can see, there was a decrease in all historical volatility indexes, which is an obvious consequence of the rise we mentioned at the beginning of this video. If we look at the chart, we can see that historical volatility went down over the last month, and it also went down over a longer time horizon. And this is very clear if you look at the Mini S&P 500.

Over the last month, there was a decrease in historical volatility, with percentile values below the 50th percentile for all the indexes, even over a one-year time horizon.

As for implied volatility, by observing the chart, we can see a slightly different situation. In fact, the SPX Volatility Indexes show a slight increase in implied volatility.

However, the term structure is still in contango, that is, in its usual structure when stock indexes are calm. This is confirmed by the values of Vix, which are extremely low. And as you know, this means that the market is not worried at all at the present moment.

Let's move on to the rollovers, although there's very little to say here as well. There'll be no rollovers next week, so no need to roll any future, unless, of course, you forgot to roll the futures that expire today, so Bitcoin, Ethereum, Natural Gas, Gasoline, and Heating Oil.

And with that this video is over! 

If you want to learn more about how we trade at Unger Academy, and how we teach our students to build their Trading Systems using the method developed by the only 4-time world trading champion with real money Andrea Unger, take a look at the description of this video.

There you'll find a link to a webinar where Andrea condenses much of his twenty years of first-hand experience in trading in the markets. I'm sure the video will give you some very interesting ideas and insights.

And that's it for this week. Have a great weekend, and see you next week! Bye-bye!

 

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Francesco Placci

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.