Markets: Natural Gas Skyrockets + Crypto Weakness

by Francesco Placci

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For the financial markets, the week just ended was in many respects similar to the previous one. 

Stock indexes and the bond sector continued to fall, while the energy sector, cereals and soft commodities continued to rise. Especially Natural Gas and Grains continued their upswing as a result of the war between Russia and Ukraine. 

Instead, the crypto sector was pretty weak, with Bitcoin falling back into the trading range where it had been for several months.

To learn more about how the markets are moving and the volatility trend, don't miss our weekly overview!

Enjoy the video!

Transcription

Welcome back! One of the coaches of Unger Academy here and this is our usual chat we have at the end of the week about market trends.

Let's start by saying that today is Good Friday. Since it's a holiday, most of the global markets are closed and that's the reason why the prices are not updating in real time. 

So this week was fairly similar to last week, with downturns in the stock market, especially in the US, where bonds dropped while energy, soft commodities and grains rose. So, no major changes were recorded.

Alright, starting from the stock market, the Nasdaq index lost 3% this week, but curiously enough volatility also decreased, like last week.

The same thing on the Mini S&P. Short-term volatility also decreased while long-term volatility is still quite high.

Bonds also fell this week, so new lows for bonds were recorded. This is the T-bond. But the same is true for the European bond as well.

On the other hand, the energetics performed very well. Natural Gas gained +16%, registering an impressive rise. We all know that the trend in the energy sector is linked to the ongoing conflict between Russia and Ukraine and it doesn't seem likely to stop anytime soon.

But not only Natural Gas. Heating Oil also went up a lot this week as well as all energy markets in general.

On the other hand, as far as the metals are concerned, fluctuations were of little significance. Silver was the only metal that gained 3.5%.

Meats also rose and soft commodities registered significant fluctuations. I mean, look at where Orange Juice has gone. Looking ahead on a longer time horizon, we see that Orange Juice is at all-time highs, as is Cotton. Cotton has also been in a very strong uptrend for quite some time.

As far as cereals are concerned, Wheat continues to rise. And the same goes for Corn, Bean Oil and soy derivatives, while Soybean itself remained pretty stable.

Turning instead to currencies, we have a Euro-Dollar that stands at 1.08, not too far from the values we saw last week.

In general, we can say that the US dollar is strengthening against all other currencies.

And now to cryptocurrencies, however, Bitcoin dropped, losing 6.70% and unfortunately re-entered the channel in which it had been stationed for several months. Hopes were high for a Bitcoin rebound but at the moment the cryptocurrency market, in general, continues to show some weakness.

Let's take a look at the term structure of implied volatility. We saw the stock indexes drop, but, overall, the values are comparable to those of the previous week.

So there was a very slight increase in implied volatility, and the term structure remains in full contango.

Vix values were also low compared to the values they reached in the last 3-4 months. So, I'd say that for the moment the situation on the stock markets isn't too bad.

Moving on to the rollovers, the schedule for next week includes the soft commodities, with Sugar and Orange Juice to be rolled over on April 21 and 22, respectively, and Natural Gas, to be rolled on April 22.

Alright guys, before saying goodbye, I’d like to leave you with some advice. If there is someone among you who's interested in understanding a little bit more about systematic trading, please click on the link in the description of this video. There you’ll find a video of Andrea Unger introducing you to his method, which allowed him to obtain incredible results in this field winning the World Trading Championship with real money 4 times. You can also get the best-selling book "The Unger Method" by paying only the shipping costs. Or even book a free strategic consulting session with one of our tutors.

All that remains is to say goodbye, I would like to wish you and your families a very Happy Easter.

And please, don't forget to subscribe to our channel and leave us a Like if of course you liked the video!

And with that, we will see you next week. Bye-bye!

Need More Help? Book Your FREE Strategy Session With Our Team Today!

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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.