Friday saw all major US stock indices rise firmly to reach new record highs, with the rise continuing in off-hours trading as the market opened this week.
- US stock markets are exuberant, with the benchmark S&P 500 Index rising strongly to close at a new record high last Friday, as did the other major indices, notably the NASDAQ 100 which has been the best-performing stock index of all over recent months. Trend traders will be interested in being long of some or all these indices. Historical data shows that a fresh record high in the S&P 500 Index produced a median annual return over the following year of 13%. Traders and investors will be hoping this precedent holds over the coming year.
- Although some stock markets in Asia are doing well – notably the Nikkei 225 Index which has reached another 34-year high today – Chinese stocks are heading lower, with the HSI nearing a 19-year low on poor Chinese economic data and sentiment.
- In the Forex market, the British Pound has been the strongest major currency since the Tokyo open today. The Australian Dollar has been the weakest. The greatest volatility recently has been seen in the USD/JPY currency pair.
- Markets are awaiting policy meetings at 3 major central banks this week: the Bank of Japan, the European Central Bank, and the Bank of Canada. None of them are expected to change their interest rates, but their policy statements will be closely watched.
- Cocoa futures reached a new multi-year high price Friday, which will keep trend traders interested in this commodity on the long side. It has been exhibiting a powerful bullish trend for more than a year now.
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