Black and White Technical Report: The Week Beginning 26/07/2021

Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets

Primary UP trends remain in Major Indices along with Oil and Copper. 

With US and the Australian XJO markets pushing into new all-time highs on strong earnings, the intra week reversal has been short lived. 

Highlighting the Idea traders should always respect the underlying Primary trend found in Weekly charts. 

This group reflects the underlying market belief economies are recovering and will continue to improve, this shows up in strong technical price moves.

Gold and Silver continue to build price consolidation areas, Silver the weakest with the major support at $26.0 broken with a breakdown to lower support levels in the following days.

 

XJO WEEKLY
Price structure:
The Weekly bar displays a record close prior to first testing the lows, the current Weekly outside range (OPu) is often a marker of major turning points, within 1- 3 periods (weeks). This week look for a continued move higher towards the price target. 

Underlying support remains at 7197.

The current consolidation area looks to be complete with the Primary UP Trend set to resume.

 

Indicator: Relative Strength 14
The RSI indicator has turned sideways and moved below the 70 level. A continued reading under the 70 level would put traders on alert for some form of slowing divergence signal.

During time of consolidation the RSI will normally decline as price moves sideways.

The RSI should be monitored for a potential move below the key level of 50 to show a shift in price momentum.

Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets

Comments from last week:  A series of weekly bars (6) sitting side by side equals consolidation, these periods can last many weeks to months before a decisive breakout. Last week showed an inside bar up close, (IPu) but remains indecisive about the next direction breakout.

Last week’s break in the trend line has meant the trendline has moved and returns to “tentative”.

The underlying primary trend remains UP with 7715 as the next target

XJO DAILY
Price structure:
The current consolidation looks to be complete with the 3 low points highlighted within this price discovery area. The record close following the pivot point set last Wednesday, has followed through, current price momentum would suggest higher price in the early days of this week.

Indicator:  Relative Strength 14
The Relative Strength Indicator 14 has sharply moved to a 4 week high reading a strong signal for continuing positive price momentum.

Indicator:  VOLUME
Trading volumes again remain subdued during the later part of last week indicating weak buyer interest. This would be monitored today for an increase on the breakout over 7406.

Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets
Comments from last week:  With the 3 low points now completed, this signals the next move to be a breakout. The two levels of interest are the 7406 resistance and the 7216 support level.

Further detail shows up by observing the last 4 days in the week have remained above the Monday closing high, a strong sign of buyer support. (see volume note). Ultimately a move higher would be the favoured direction.

S&P 500 WEEKLY
Price structure:
The S&P 500 has claimed the 4400 level. 

Last week’s (OPu) Outside period up close, first tested the 4240 support level before closing at an all time high. Traders are more than aware many reversal signals have failed in this Primary UP trend, however price parameters should be monitored. In this case a weekly close below 4240 would set a bearish tone following last week’s high close.

Indicator:  Relative Strength Indicator 14
The Relative Strength Indicator has re-emerged as a developing divergence sell signal. The Sell line is shown around the 65 level. It can also be observed that the RSI can track sideways as price consolidation takes place.

Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets
Comments from last week: A new high for the week, but rejection to see the Index close on the low of the week. The trendline remains tentative at this point in the chart with 4240 remaining as the first level of any real price support.

Until the first level of support breaks the Index will be in consolidation above 4240, these periods can last many weeks before a breakout in either direction.

With Relative Strength (momentum) turning lower the Index may be displaying a short-term top in place.

S&P 500 DAILY
Price structure:
Last Tuesday set a strong pivot point from the Monday retest of 4240. The current follow through is strong with Friday’s “opening gap” large range bar, setting the stage for a 150 point measured move for this consolidation area. 

The short term 4394 is the daily closing price support level to hold in a price reversal scenario. Should the market close below this level, traders would be on alert for support at the weekly level of 4240.

 

Indicator: Relative Strength 14
The divergence Sell signal is now complete. Current Relative Strength is very positive for further momentum gains. An early reading over the “70” level would be very positive for a strong momentum price move. 

Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets
Comments from last week:  Last Wednesday set an Outside period (OPd), this can be highly indicative of a turning point set in place.

With price testing the uptrend line a break below this level targets the 4240-support level. 

Further evidence of a bearish week ahead can be seen in the large range of Friday’s bar, this could be described as impulsive following the shorter ranges earlier in the week.

NASDAQ DAILY
Price structure:  Our first look at the NASDAQ
Like many other Indices’ the Nasdaq set a Bullish pivot point on Tuesday. With the underlying primary trend resuming to see the Index set a new high.

The strong range on Friday is a good signal for further gains in this seasonally bullish period.

Support at 1500 is now the critical psychological level to hold in the short term. A strong close below this level may see a retest of 14595.

However, the Primary trend remains UP and retracements are part of that trend structure. 

 

Indicator: Relative Strength 14
The Relative Strength Indicator has turned sharply higher following 2 weeks registering a reading below the 70 level. With the closing price making new highs and the Relative strength Indicator currently showing a lower high, a strong BEARISH divergence signal remains in place.

Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets
Comments from last week:  Underlying Weekly chart shows the primary trend of the NASDAQ is UP. 

The Daily chart of the NASDAQ 100 has broken the short term trendline with a decisive second close below the 14910.

The first support level is 14595, this level should be monitored for daily support early this week. 

The first real key support only shows up at the historical resistance level of 14073, price moving to this level would also display a break of the long-term trend line.

 

USD Spot GOLD – DAILY
Price structure:
Gold continues to trade lower than the January 2nd 2021 open.

Currently 4 weeks of secondary consolidation continues with consistent closes above the $1800 level. Inside the past 7 days an a, b, c pattern can be identified, this may signal the completion of the markdown from the $1840 price area. There is nothing bullish in this current chart formation other than potentially more consolidation above the $1800 level.


Indicator:  Relative Strength 14
The Relative Strength has now moved back below the 50 level, a signal of decreasing price momentum and should be monitored for a further move lower.

Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets

Comments from last week: Last Friday Gold set a Daily reverse pivot point, following last Wednesday’s breakout higher, this following 3 weeks of gains, this profit taking has set the stage for a retest of lower levels down to $1764.0. The first level of real support will be the psychological level of $1800. 

Underlying trend remains indecisive. And Gold remains highly tradable while support and resistance levels remain to be tested.

SILVER DAILY
Price structure:
This week Silver entered a primary downtrend with the major support level of $26.00 giving way to the breakdown below the $25.52 level.

Without a bullish catalyst Silver looks set for further consolidation and range trading between $24.60 and $25.52.

 

Indicator:  Relative Strength 14
In the shorter-term observation, the RSI last week shows a continued move below the 50 level as price begins to consolidate below $25.52.

Traders would monitor this pattern for a move below the 30 level and potential Bullish divergence signal.

Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets
Comments from last week: Short range consolidation now best describes the Daily silver chart. The current support level shown at $25.52 is being tested. Last Friday’s large range bar is a bearish signal for further declines, potentially to retest the $24.60 support level.

AUD GOLD DAILY
Price structure:
The midweek breakout above 2477.0 resulted in a “shooting star” reversal, this chart remains bullish as Friday’s close shows a bullish hammer bar within the current PRIMARY UP TREND.

Look for a higher close over the Hammer bar to set a pivot point reversal, failure at this level may see $2400 retested again.

Indicator:  Relative Strength 14
Relative Strength moving back below the 70 level is in line with price movements. Look for  the continued rise in the RSI  with price retesting the 2477 level in the coming days. 

Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets
Comments from last week:
 This has been a great chart for the local Gold producers as the XAUAUD price remains above the key $2400 level. Friday’s inside day (IPd) shows the market coming into balance under the resistance level of $2477. A break of the IPd low price would give direction in the coming days, with the important $2400 remaining a key psychological level to hold.

 

COPPER DAILY
Price structure:  LME Inventories remain historically low.
Last week the strong OPu bar closed strongly above the “midpoint” resistance level of $4.33, this is a very strong signal for further gains with a retest of $4.50 the key test in the coming days. 

The a, b, c pattern now looks complete without the potential retest of $4.00 mentioned last week. 

The underlying Primary UP trend in Copper looks to be resuming.

 

Indicator: Relative Strength 14
Confirmation of a loss of momentum is shown as the RSI moves below the “70” and now testing the 50 level, a further movement below 50 signals a loss of positive momentum and would confirm a potential retest of $4.00 underway. The RSI requires a continued reading above the 50 level to signal positive price momentum.

It should be remembered the RSI can track above the 50 -70 level for many months at a time and currently remains a signal of positive price momentum.

Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets
Comments from last week:   China’s strong GDP numbers may underpin the price chart going forward. The growing resistance of the midpoint $4.33 level should be of concern for the bullish trader.

With last week’s bar showing a long lower shadow a breakout above $4.33 would be imminent in the coming days.

Failure to regain this level may see a fast retest of the $4.00 support level as a continuation of the a, b, c structure.

AUSTRALIAN VOLATILITY INDEX:
Last week’s volatility spike higher was quickly reversed back into the Bullish range, This looks bullish for equities in the coming days.

A reading over the 13 level is a bearish signal for equities.

The XVI is the difference of 1-3 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 26/07/2021, FP Markets
Comments from last week: Bullish equities, how-ever the past 2 weeks now show the high spikes in Volatility and may be the early signal of increasing price volatility by way of increased forward option premium. A reading over the 13 level is a bearish signal for equities.

USD DOLLAR INDEX
Price structure:
This DXY chart may remain range bound between 91.66 and 93.45. The message is in the RSI reading (below). With individual price bars “overlapping” each other the market seems directionless and consolidation may prevail.

 

Indicator:  Relative Strength 14
Relative Strength has set a new high over the 70 level and dipped below, to move higher to make a lower high as price makes a closing higher high. Bearish divergence is now in place.

Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets
Comments from last week:  Price structure remains strong, in close observation of the daily price bars the down close bars rarely follow thru lower as buyers lift the price immediately. This DXY chart may remain range bound between 91.66 and 93.45. The inverse Head and shoulder pattern remains in play with the 94.85 high target area still in place. 

In conjunction with the RSI notes below the key level of immediate support is 92.07.

 

WTI CRUDE OIL
Price structure:  This commodity is news driven by supply -demand.
This is such a great technical chart!

The OP reversal to retest the $66.0 level with a Weekly hammer now in place. With the underlying Primary UP trend already in place this current retracement remains a bullish setup for further gains to retest the $75.20 level and potentially higher.

The ultimate target remains at $100 bl. 

 

Indicator: Relative Strength 14
RSI turning lower over the 70 level, in line with current price moves only confirms the underlying price momentum is slowing. 

The RSI divergence signal failed to register a sell signal and would now be disregarded in the event of higher prices.

Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets
Comments from last week: The first strong signal of rejection in the OP of 2 weeks ago has played out with price rejection at the $75.20 level. This sets up the potential retest of $66.00 in the coming days.

The underlying primary trend remains UP, with the potential to see several weeks of consolidation as part of the trend price structure.

  • Black and White Technical Report: The Week Beginning 26/07/2021, FP Markets
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