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Black and White Technical Report: The Week Beginning 20/12/2021

Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets

The Black and White report wishes everyone a great Christmas and new year period with 2022 set to be a great trading year.

Seasonally, this second week of December kicks off a bullish period for equities running to the end of January.

With no immediate Technical reversal signals evident within the Major Indices’, the period forward should provide some very active trading.

 

XJO WEEKLY, Price structure:

The current inside period (IPd) shows the market in balance, this type of price display can provide a great trading signal on the break of the high or the low. Overall, the XJO remains in consolidation above 7200 and below 7350, previous consolidation ranges from Q2 and Q3 2020 and Q1 and Q2 2021 have provided support for the next leg higher. He Index remains within a Primary UP trend.

A Weekly closing price below 7200 would signal a top is in with a potential retest of 6900.

 

Indicator: Relative strength 14:

 Relative strength has turned sideways, as the reading is above the 50 level, the next move in the RSI will be telling should it move higher, this is a good position for further gains. The Relative strength Indicator reflects price momentum.

 

     Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets

 
Comments from Last week: The bigger picture of the XJO index is one of continuing consolidation above 7200 and below 7530. Last week set a new Bullish pivot and confirms the 3rd retest of this level since the June – July period 2021. With 3 significant low points the pattern is deemed complete, a breakout higher could be expected given the Relative strength Indicator has again turned positive.

 

XJO DAILY, Price structure:

Last has set an a,b,c type retracement finishing with a 3 Bar reversal signal. The potential for a retest of 7216 remains, this would extend the pattern into a small 5 wave down, further reversal signal would be monitored from this support level. Consolidation periods such as this from June 2021 can be frustrating, however for the astute trader the breakout is often decisive.

 

Indicator:  Relative strength 14:

The Relative strength Indicator (14) reflecting the underlying price momentum has moved sideways but above the key 50 level. Showing the downside momentum has eased,

A continued movement over the 50 level would show a continuing positive change of momentum.

 

Indicator:  VOLUME: Trading volumes have remained solid in the past week during this consolidating price structure, with Friday putting in a strong volume day with the December ETO and Index options expiry.

Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets

 

Comments from Last week:  Last Wednesday’s FO bar has set a small retracement (as they do). The strong bullish days of last Tuesday and Wednesday has been met with limited selling with a retest of the 7350 level. A breakdown below the 7216 level would be a significant bearish signal, momentum remains to the upside.

 

S&P 500 WEEKLY Price structure:

The pivot point from 2 weeks ago has not followed through higher with the Index remaining within the 4650 to 4720 range. Last week showed a short price range compared to the pivot bar week, a good signal the sellers DO NOT have control. Look for a closing price above 4720 to signal a further leg higher.

 

Indicator:  Relative strength Indicator 14.

The relative strength indicator has negated the Bearish divergence signal. The current sideways movement is a positive outcome for the week of consolidation. A reading below the key 50 level would signal further price weakness.

 

Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets

 

Comments from Last week: The S&P 500 has set a Bullish pivot point, the large Weekly range is a strong signal for further gains this week. The next step is to trade above the recent OPd  high, this would be a very Bullish signal for further gains. The S&P remain within the definition of a Primary UP trend, without any evidence of a long term top developing.

 

S&P 500 DAILY Price structure:

4630 to 4650 remains solid intraday support, last Friday finished with a FO and a hammer, giving a bullish signal for the start of this week.

The tentative trendline remains in place a short retest of this level would further strengthen the bullish case for further gains.

For the bears, a closing price below 4600 would be a decisive move by the sellers and target 4545.

However the Primary trend remains UP, with a breakout above 4720 the higher probability.

 

Indicator: Relative strength 14:

Relative strength Indicator (14) has turned lower, but remains above the key 50 level. A further close below the 50 level would alert traders to failing price momentum with further downside.

Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets

 

Comments from Last week:  With the last Monday close above 4545 the S&P has pushed higher and looks set to again make new all-time highs. The OPd again marks the Daily swing point, the last three trading days have setup a small consolidation point. A breakout higher could be expected. Last week also set a new price Gap at the 4630 area, this level should be monitored should a retracement in price occur in the short term.

 

NASDAQ DAILY,  Price structure: 

The Nasdaq remains within a very volatile consolidation period with 15700 remain the key support level.

The key observation is the Gap open (sell) last Thursday, was not followed thru on Friday with a further “Gap open” (buy) on Friday.

This developing Pennant is a continuation pattern and based on the current Primary UP trend the next breakout should be over the 16300 level to test the 16700 level.

 

Indicator: Relative strength 14:

Relative strength indicator moving below the 50 level is a sign of price momentum weakening, however the current reading swinging around the shows waning momentum and should be monitored for a move higher as a precursor to price breaking higher.

Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets

 

Comments from Last week Last week the Nasdaq did not perform in line with the S&P 500 following the recent a,b,c type decline with this Index consolidating above the 16200-level following last Tuesday’s Gap higher. The “tentative” trendline and 2 levels of support at 15700 and 15534 remain. Further consolidation may set up a bullish breakout over the 16550 level to test the upper price channel line. The Nasdaq remains well within the definition of a Primary UP trend. A close below 15534 would change the underlying trend..

 

 USD Spot GOLD – DAILY      Price structure: No evidence of a Bull market.

From the Fake out low (FO) testing the Weekly trendline GOLD has moved higher over $1788 but failed to follow thru with Friday setting a Shooting star indicating buyers unwilling to hold over the weekend period.

Traders could look for a retest of the $1788.0 level to hold, further price moves below this level will indicate further consolidation in the coming week.

 

Indicator: Relative Strength 14:

Relative strength shows a reading above the 50 level  and turning sideways to up as upside momentum continues to improve.

 

Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets

 

Comments from Last week:  Another week to add to the consolidation picture, this is not a Bull market with two definitive points of reference, resistance at $1788.0 and support at $1764.0 Last weeks OPu can offer evidence of a swing point in play, this would require a close above the $1788.0 resistance to confirm. Gold remains within a MAJOR sideway move with No Bullish price evidence. The key issue with this type of pattern is long term holders may sell and allocate funds elsewhere.

 

 SILVER DAILY, Price structure: No Bull market.

As discussed last week, Silver has now completed a retest of the $21.60 level. The Hammer bar and follow through on Thursday has new a bullish pivot point.

Resistance remains at the $22.50 level, price closing over this level would be very Bullish for further gains.

 

Indicator: Relative strength 14:

Current Relative strength is moving below the 50 level and now turning higher from the 30 level shows bullish price momentum improving.

A further move above the 50 level would be very bullish in the short term.

Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets

 

Comments from Last week: With the $22.50 level providing resistance, Silver is setting up to retest of the MAJOR support level of $21.60. A retest of this $21.60 level may provide a double low scenario and see buying support. The Daily trend is Down inside this consolidation area below $24.90

 

AUD GOLD DAILY, Price structure: 

The current level to hold at $2477.0 for the descending pattern, a Bullish outcome only when the base is complete. The current consolidation from mid-November displays two significant touch points, a third would complete the pattern before we look for a breakout.

Indicator Relative strength 14:

Relative strength moving sideways has turned higher and remains above the key 50 level this shows an increase of positive momentum, this ranging movement is typical with consolidation areas.

Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets

Comments from Last week:  The current level to hold at $2477.0. This remains a positive outlook with the support level of $2477.00 developing from what was resistance during the May to September period. With the $USD Gold price in consolidation the AUDXAU price is strongly affected by movement in the $AUD. This chart remains supportive to Australian Gold producers NCM,NST,SLR and others.

 

COPPER DAILY, Price structure: 

The Weekly chart of Copper shows a new Bullish Hammer having broken the previous low 5 periods prior (FO) and finding buying support to bring price back to the key $4.33 area.

Copper remains in price consolidation, with lower shadows setting the lower prices as buyers provide support at and above the $4.0 level.

 

Indicator: Relative strength 14:

Current readings swing above and below the 50 level reflect the current consolidation underway.

The key for now is the RSI remains above the 50 level as a reflection of ongoing and any positive underlying positive price momentum.

Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets

 

Comments from Last week:  With the news around China potentially moving into economic slowdown, Copper reflects this outlook with another consolidation week. The concern is the $4.330 level remains key going forward, with a potential retest of the $4.00 level underway. MIN,OZL and other producers will be responsive to this chart.

 

AUSTRALIAN VOLATILITY INDEX:

Forward Volatility has moved lower into the Bullish for equities window. Seasonally this period of the year has seen consistent market gains. The forward pricing for risk has declined indicating this year may also see the Xmas rally.

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: The Week Beginning 20/12/2021, FP Markets

Comments from last Week: The week provided a wide range movement. With a reading remaining above the 13 level, forward risk is still demanding a premium. This reading remains news dependant, with Evergrande and Omicron driving readings.

 

USD DOLLAR INDEX, Price structure:

Last Friday saw an impulsive (strong range closing towards the high) price movement higher.

This secondary consolidation is developing into a continuation pennant with the 97.75 level remaining the ultimate target.

This outcome would place pressure on the $AUD, providing support for local Gold producers and the Commodities sector in general.

 

Indicator:  Relative strength 14:

The Relative strength has turned higher in line with price movements and improving momentum. And has the potential to move higher on further price strength while remaining above the 50 level.

 

Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets

Comments from Last week:  This secondary consolidation is developing into a continuation pennant with the 97.75 level remaining the ultimate target. This outcome would place pressure on the $AUD, providing support for local Gold producers and the Commodities sector in general.

 

WTI CRUDE OIL, Price structure:  This commodity is news driven by supply -demand.

 The WTI contract remains within the definition of a Primary UP trend. Last week set an inside period closing lower than the open. (IPd) with the bullish “3 bar” reversal pattern now in place following the successful retest of the $61.80 level, the market remains in balance.

 

Indicator: Relative strength 14:

Relative strength Indicator turning sideways as last week shows the market in balance from the close of 1 week ago.

This is the area to now monitor for a potential Bullish divergence signal to develop over the coming weeks.


Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets

Comments from Last week: With the $61.80 level ($62.0) again tested, the WTI contract set a 3 Bar reversal setup on Friday close for the week. The expectation would be for further follow through higher in the coming week to test $75.20.

 

  • Black and White Technical Report: The Week Beginning 20/12/2021, FP Markets
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