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Black and White Technical Report 03/10/2022

Black and White Technical Report 03/10/2022, FP Markets

XJO WEEKLY Price structure:

IMPORTANT DISCLAIMER

The information in this report is of a general nature only. It is not personal financial product advice. It does not take into account your objectives, financial situation, or needs. You should therefore consider the appropriateness of this general information in light of these. The Australian School of Technical Analysis (www.astatrading.com) recommend that you refer to the Product Disclosure Statements of any financial products which are discussed in this report before making any investment decisions. ASTA accepts no responsibility for your actions and recommends you contact a licensed advisor before acting on any information contained in this general information report.

The close of this week is exactly equal to the close late June, this may be setting up a double bottom support level. This can be resolved for direction very quickly should the index close below the 6474 level and more importantly below the 6400 level. The primary trend is down a further movement below the 6400 would further confirm that trend in place.

Indicator: Relative strength 14:

Relative strength has again closed below the 50 level as part of the overall decline in relative strength. Price momentum turns negative on the lower side of 50. However, should Relative strength move above the key 50 level a sign of improving price momentum would prevail.

 

Black and White Technical Report 03/10/2022, FP Markets

Comments from Last week: The current move is impulsive and a confirmed break of the tentative trendline putting the Index on a short course to test 6400. The Index remains within a strong primary downtrend, a break of the 6400 put the index on track to retest the breakout level at 6200.

 

XJO DAILY Price structure:

Last Wednesday the Index showed a fake out low (FO) followed by the sharp rally Thursday with no follow through indicated by Fridays inside period (IPd). A price movement either
side of the Friday IP will give some indication of direction in the coming days. A break of the Wednesday low would signal continuation, however this would be the place to find support considering the volumes traded (see below).

Indicator: Relative strength 14:

The Relative strength Indicator (14) reflecting the underlying price momentum has moved lower below the 50 level indicating weak momentum. Relative strength is moving in sync with the trending action of the market and does not offer any trading signal other than indicating momentum is to the downside.

Indicator: VOLUME:

Last Friday’s higher volume bar was developed from the inside range bar moving lower, high turnover bars that do not have impulsive ranges (large) can begin to represent a base beginning to build. Fridays volume measured over $1B. Only volumes over 1Bil on a Daily basis would indicate strong new money buying.

 

Black and White Technical Report 03/10/2022, FP Markets

Comments from Last week: Impulsive daily ranges indicating the seller in control of the price action. With the Daily support level of 6765 now decisively broken, the final bar is now a Fake-out line against point 3 set on the 18th July. However, no reversal pattern is showing. The daily price trend is confirming the Weekly Primary trend. The FO bar scenario can reverse the immediate price movement but may not lead to a change in trend.

 

S&P 500 WEEKLY Price structure:

A solid weekly close towards the low lend a strong signal of continuation, the close is below the 3600 support level indicating the sellers are in control. No current signals of reversal
from this level are showing inside the primary down trend. The standout observation is the range of the weekly bars are very strong compared to the 2020-21 period of short upward
movements indicating strength of momentum underway.

Indicator: Relative strength Indicator 14.

The reading below the 50 level again sets up the sell signal, last week the indicator turned lower, indicating a change in momentum, this week continuing the momentum move. A movement towards and over the 50 level would be a very strong short term bullish signal. Positive momentum requires a reading above the key level of 50.

 

Black and White Technical Report 03/10/2022, FP Markets

Comments from Last week: The Weekly S&P also shows impulsive movements down below the current support level of 3715 and testing the June low and heading towards the 3600 level a full 23 % decline from the January high. The OPd of 2 weeks ago is the key reversal signal in play. No current signals of reversal from this level are showing.

 

S&P 500 DAILY Price structure: Developing bullish structure has failed.

The daily chart better displays the intention of the market to move lower with a solid closen below the previous few days consolidation. A bear trap would be indicated with an immediate close back over the 3630 level. However, momentum is strong to the downside with continuation expected. Targets around 3400 are feasible in this current move lower.

Indicator: Relative strength 14:

Further price weakness for this index will see the RSI move lower. This remains the level to monitor for a bullish divergence signal.

 

Black and White Technical Report 03/10/2022, FP Markets

Comments from Last week From the OPd Outside period last Tuesday the index has moved lower to set both a FO Fake out against the July low and a Gap open buy signal often seen as an exhaustion signal following a fluid movement. Confirmation of reversal would be seen as a Pivot or 3 bar setup

 

NASDAQ DAILY Price structure: Primary DOWN Trend remains

The repositioned tentative trend line ( redrawn off the low of the Wednesday pivot reversal bar) has provided no support for the current decline in price. With the primary trend remaining down, last Fridays movement has confirmed the potential for a move lower into the 10,000 point level.

Indicator: Relative strength 14:

The Relative strength indicator moving back towards the 30 level a signal of slowing / negative momentum. With a continuing move, the indicator may cross lower below the 30 level, price movement will remain negative with a continued reading below 50.

 

Black and White Technical Report 03/10/2022, FP Markets

Comments from Last week: The Nasdaq Daily chart shows price moving below the “tentative” trendline (this will be removed next week.) The final movement (Friday) is shown as a Gap open buy signal and Fake out of the late June low point. Any rally may target the OPd high as a retest, failure to close past this level would signal further selling.

 

USD Spot GOLD – DAILY: Is it close to a Bull market? Answer = No buy early reversal

Resistance of 1676.0 remains supreme with the final bar rejection back to $1656 support. Bullish divergence in price remains in play following last Wednesday’s OPu bar a larger range and key reversal bar. The primary trend remains down, to confirm any level of support in the coming days a close must remain above the $1656.0 level.

Indicator: Relative Strength 14:

Price momentum is working lower with the RSI a higher low as price makes a closing lower low sets up the divergence signal. (Price consolidation would naturally see the RSI drift back too around the 50 level. A strong movement either way will show the next directional move.)

 

Black and White Technical Report 03/10/2022, FP Markets

Comments from Last week: Multiple days below the $1676 level and above the $1656 level had to break one way or another, the primary trend has prevailed with the breakout lower. The range of the bar high to low is large compared to previous ranges, a signal of continuation

 

SILVER DAILY Price structure: Bull market? – Not yet

As with Gold, an OPu bar is present in the Daily silver chart. As the OPu is a reversal bar the low point has set a higher low than the late August low, and possibly signalling the change in Daily trend is underway. Last saw rejection of the $19.0 level, this will be the goto level in the coming days a close over this level would give a string indication of further gains to come.

Relative strength 14:

Current Relative strength is rolling lower with the movement crossing the 50-level, RSI turning higher again would reflect the underlying momentum turning positive or consolidating. A continuing move above the 50 level and higher would be very bullish signal in the short term. Price consolidation results in the relative strength turning towards the 50 level.

 

Black and White Technical Report 03/10/2022, FP Markets

Comments from last week:
The initial move higher in Silver has failed to breach the $20.0 level with the decisive move, read impulsive move lower. The bigger observation is Silver is consolidating above $17.50 and below $21.0 for the past 2 months. The underlying primary trend for Silver remains down. The bigger observation is Gold has made a new low and Silver has not.

 

AUD GOLD DAILY Price structure: Breakout.

The strong impulsive move higher on Friday thanks to a weaker $AUD, but nonetheless an IMPORTANT DEVELOPMENT for undervalued AU$ Gold producers to finally make a move higher. This development in the AUDXAU price put the index into a Primary up trend and may gather further upside momentum in the coming days.

Indicator Relative strength 14:

Relative strength has turned higher from above the 50 level to below the 70 level, this shows a significant increase in positive price momentum and remains a strong indication for further advances.

 

Black and White Technical Report 03/10/2022, FP Markets

Comments from Last week: Australian dollar Gold now remains trendless as price consolidates. The break in price higher last Wednesday has not seen any bullish continuation up to last Friday, A continuing move lower could be expected on a weaker Gold price and weaker $AUD. This will keep pricing pressure on the Australian Gold producers and may set lower prices again this week.

 

COPPER DAILY Price structure: “V” recovery failed.

The Weekly chart for Copper indicates a Monday gap open buy signal resulting in a higher close. But the close is below the $3.47 resistance level. At best Copper is consolidating
below this key level. A further breakout higher is required to change trend, but it should be noted the impulsive bar of 2 weeks ago has not followed through lower.

Indicator: Relative strength 14:
Current reading has swung from below the 30-level to again turn sideways to higher as downward momentum has slowed, however the current reading remains below the key 50 level.
The key now, is for the RSI to swung back above the 50 level as a reflection of ongoing price gains. A sharp cross of the 50 level is required to offer a strong buy signal.

 

 

Black and White Technical Report 03/10/2022, FP Markets

Comments from Last week: The breakdown of the $3.47 support level is concerning and indicating a retest of the trendline level at the $3.3 low point is underway. The underlying short term primary trend remains down. The expectation would see further price consolidation above $3.30; a breakdown of this level would signal a retest of the $2.98 support level underway.

 

AUSTRALIAN VOLATILITY INDEX:

Volatility reading has moved sharply higher and remains above the 13 level indicating forward pricing of PUT options remains strong. In general, lower equity prices or consolidation of equity prices is indicated as the reading remains above the 13 level. For continued support of equities, the XVI should move below the “13” level.

The cost of 3month forward PUT options is decreasing from recent elevated levels.

The XVI is the difference between 3-month forward pricing of ETO Options against current month. As markets anticipate events, the forward priced option volatility changes, hence as forward price changes, this “skew” in pricing is measured in this XVI.

The XVI value works as an inverse observation to the underlying market.

 

Black and White Technical Report 03/10/2022, FP Markets

Comments from last Week:

USD DOLLAR INDEX Price structure:

The king is dead, long live commodity prices! The OPd (outside period) is a significant development to mark the high point. The current first support level is 110.75. This is not a change of trend, a lower high is required that may take time to develop. This is the key reversal signal to watch in the coming days, a close back over the 115 level would negate the view of a top in place.

Indicator: Relative strength 14:

The Relative strength has turned lower in line with price movements indicating a decrease of upward momentum and should now be monitored for further consolidation as the current reading is below the 70 level. This will move lower to sideways should price decline, only a continued reading back above the 70 level would indicate continuing strong price momentum.

 

Black and White Technical Report 03/10/2022, FP Markets

Comments from Last week: The wrecking ball of currencies, the US dollar Index has crushed the pricing on commodities and FX. With the US 10 year bond rate now moving towards 4% this current momentum may continue. The USD Index remains in a firm primary UP trend.

 

This commodity is highly news driven around supply -demand. The drift lower in the WTI contract price following the OP bar of last week indicates lack of urgency in the Oil market.
The UP trend has moved into NO trend as price moves back to the $75.20 support level below the Q4 2021 high. Reversal over the $84.25 level is required to take a bullish view in the coming weeks, momentum dictates otherwise. Of note is the Nat Gas price is also declining and may start to place pressure on the listed Oil/Gas stocks.

Indicator: Relative strength 14:

The RSI running below the 30 is a result of strong price declines as upward momentum slows, price remains at risk of moving lower only a move over the key level of 50 would signal increasing positive price momentum. This is the level to monitor for a divergence signal, these signals take many days to develop.

 

Black and White Technical Report 03/10/2022, FP Markets

  • Black and White Technical Report 03/10/2022, FP Markets
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