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Black and White Technical Report Week Beginning 05/12/2022

Black and White Technical Report Week Beginning 05/12/2022, FP Markets

XJO WEEKLY
Price structure: Primary trend

Last week’s “spinning” candle with the low retesting the 7200 level, suggests the market is setting up for price consolidation above the 7200 level. This level is a historical inflection point with the market finding both support and resistance at this level from Q2 2021. A closing price breakdown below the 7200 would target the 6930 level.

Indicator: Relative Strength 14

Relative Strength has closed and remained above the 50 level as part of the overall change in momentum. Price momentum has turned significantly to the upside indicated by the rising RSI, a further movement over the key 50 level towards the 70 level would be very bullish.

Black and White Technical Report Week Beginning 05/12/2022, FP Markets

Comments from last week: Last week saw a solid move over the 7200 resistance level, with the close in the high of the range continuation should be expected. With the resistance support level of 7200 just breached this should provide support on any retracement in the coming week. An immediate close below this level would send a bearish signal. A retest of this level is best scenario following 4 weeks of solid gains.

 

XJO DAILY
Price structure: Breakout

Last Fridays’ inside down close bar may indicate the first of the potential price consolidation above the 7200 level, at best a retest of this level with closing price remaining above this important level would provide a bullish continuation pattern in the already established daily UP trend.

Indicator: Relative Strength 14

The Relative Strength Indicator (14) reflecting the underlying strong price momentum has moved higher over the 70-level indicating continuing strong momentum the turn lower should be monitored for further declines. Relative Strength is moving in sync with the daily action of the market and does not offer a trading signal as momentum is currently shifting to the upside. Early momentum failure would be indicated with a closing price again below the 7130 level and a place to monitor for bearish divergence signal.

Indicator: VOLUME

Overall, Volumes continue to decline as the market rises, a bearish development. High volume over 1Bil indicates fresh money flow and remains very supportive for further gains. The high volume day on the 20 th November relates to Index rollover to a new quarter. Only DAILY volumes over 1Bil on a Daily basis would indicate strong new money buying.

Black and White Technical Report Week Beginning 05/12/2022, FP Markets

Comments from last week: The consolidation of price at the 7130 has provided the base for a bullish move higher. The short range daily movement from last Thursday and Friday is the reaction to the US markets being closed for the Thursday Thanksgiving holiday and Friday always being a very light volume day. Should price move below the 7200 weekly support level look for a retest of 7130. Price to hold this level would ultimately be a bullish development.

S&P 500 WEEKLY
Price structure:

The down trendline is the 2 nd inflection point following the close over the 4050 level for this index. With the high close in the weekly bar against this down trendline a high momentum follow through should be expected, followed by some form of retest or consolidation. A weekly close below 4050 would send a bearish signal and may result in lower prices.

Indicator: Relative Strength Indicator 14

Relative strength has set a new higher low and has currently moved over the key 50 level (just) indicating positive momentum. To remain bullish the RSI should remain over the 50 level during this current price advance.

Black and White Technical Report Week Beginning 05/12/2022, FP Markets
Comments from last week: The S&P 500 has met the first inflection point at 4050. A close above this level would be very Bullish for further gains. The current close towards the high of the week is a strong indicator for further advances towards 4200 points. A breakout over the down trendline would be very bullish and offer further gains.

 

S&P 500 DAILY
Price structure: Confirmed bullish structure

The significant breakout over the 200 day simple moving average has the markets attention, the retest of the 4028 level is a solid signal of price support. The chart has 3 spike high points a close over last Wednesdays high would be very bullish, until then consolidation above 4028 would be the best bullish outcome. The price gap at 4200 remains the primary target.

Indicator: Relative Strength 14

Relative Strength has turned higher and moving over the 50 level, a very strong indication of immediate improving momentum. Further price weakness for this index will see the RSI turn to move lower below the key 50 level.

Black and White Technical Report Week Beginning 05/12/2022, FP Markets
Comments from last week: The shortened week has the index testing the 200 day moving average. A close over this level would signal further gains. Last Wednesdays close has set a Fake out bar and can provide a reversal signal with a confirmed lower close in the following price action this week. The price gap at 4200 remains the primary price target.

NASDAQ DAILY
Price structure: Base ready to break out

The current consolidation pattern in the Nasdaq Daily show 3 individual spike points as the impulsive range set the index to test the 12,000 level. Further advances should target the 12420 level as the Primary up trend continues to develop.

Indicator: Relative Strength 14

The Relative Strength Indicator moving back above the 50 level but moving sideways in line with the current price decline back to retest the October high area around 11,600. RSI turning higher would indicate improving positive momentum.

Black and White Technical Report Week Beginning 05/12/2022, FP Markets
Comments from last week: The consolidation over the last 9 trading days contains a 3 bar reversal and an OPu with a follow through with last Friday posting an inside period. This Index continues to build support over the 11,600 level with the potential to retest the 12,400 level. The underlying price movements are not impulsive so the trader should remain cautious of a potential retest lower.

USD Spot GOLD – DAILY: Is it a Bull market? Yes

$1804 an important resistance level and showing rejection last Friday, albeit with a high close in the range, suggesting momentum to the upside remains strong. The next significant resistance level of $1876 remains with current support indicated at $1727.

Indicator: Relative Strength 14

The RSI moving above the 50 level and turning higher indicates a swing in momentum direction, a divergence signal is now in place as the market set a new closing high with the RSI setting a lower high.

(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 Week Beginning 05/12/2022, FP Markets
Comments from last week: A very good technical picture has developed with a successful retest of the $1727 level with an immediate reaction higher following the OPu setting the low point. Last Fridays OPu remains bullish with the high close in the range. This is a very good setup following the impulsive breakout from the down trendline.

SILVER DAILY
Price structure: Bull market – Yes

Along with Gold, Silver also meets a resistance point in this case $23.25 following three very strong bars from the $20.80 support level. Primary trend is UP, a continuing trend will target the $26.20 level. Support remains at $22.50 should price retrace, a break lower of this level would be very bearish.

Relative Strength 14

Current Relative Strength is rising sharply however the current movement ticking higher again towards the 70-level, RSI turning higher reflects the underlying momentum again increasing and remaining positive, an unconfirmed divergence signal is developing. A continuing move above the 70 level and higher would be very bullish signal in the short term.

Black and White Technical Report Week Beginning 05/12/2022, FP Markets

Comments from last week: Silver has provided a similar reversal pattern as seen in Gold. The $20.80 level now remains as an important support level, as this potential Primary up trend continues to develop. Fridays lower move was quickly overcome with the price closing at the high of the range for the day. A further close over $22.26 would be very bullish in this developing trend.

 

AUD GOLD DAILY
Price structure: Consolidation remains

The developing pennant at the end of a very long consolidation range is now a Bullish development for further gains following support at $2580 holding the recent decline. This is a very strong positive for Australian Gold producers to follow higher.

Indicator Relative Strength 14

Relative Strength has turned higher in line with the price action following the rise from below the 50 level. Overall, momentum has now turned higher. A continued movement above the 50 level would be a strong positive for further price gains.

Black and White Technical Report Week Beginning 05/12/2022, FP Markets
Comments from  last week: The Bull flag continues to develop with the lows beginning to retest the $2580 level, a further decline in the $AUD would lift the XAUAUD value. This chart remains very constructive to the Australian local producers. Overall the price structure remains a large consolidation zone.

 

DAILY COPPER
Price structure: Potential breakout.

Following the “gap open buy” discussed last week, copper has put in an impulsive move higher setting a higher low above the $3.47 level, a further breakout over the $4.0 level would be very bullish for further gains back into the consolidation area below the $4.88 high.

Indicator: Relative Strength 14

Current reading has swung from below the 50-level to again turn higher as downward momentum has stopped , however the current reading should remain above the key 50 level to indicate strong momentum. The key now, is for the RSI to swung back towards the 70 level as a reflection of ongoing price gain momentum.

Black and White Technical Report Week Beginning 05/12/2022, FP Markets
Comments from last week: The key observation remains price continues to trade within the base pattern, a break lower from the $3.47 level would be very bearish. However last weeks small range following the Gap open buy as the opening tick gaps from the last close indicates some balance in price at this level. A close over the $3.80 level would offer a bullish signal for further gains.

 

AUSTRALIAN VOLATILITY INDEX

Volatility reading has moved higher last week and now continues to remain below the 13-level indicating forward pricing of PUT options is weaker.

This is very good for equities during this week.

In general, lower to consolidating commodities prices and 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 Week Beginning 05/12/2022, FP Markets

 

USD DOLLAR INDEX
Price structure: Setting a lower low

A Primary down trend is now developing in the DXY with the 104 level now being targeted. A break of this important level would be a further positive for precious metals and commodities and associated stocks.

Indicator: Relative Strength 14

The Relative Strength has turned lower in line with price movements indicating further consolidation as the current reading is now at the 30 level. This will move lower to sideways should price decline, only a continued reading back above 30 and then the 50 level would indicate a change price momentum.

Black and White Technical Report Week Beginning 05/12/2022, FP Markets
Comments from last week: The secondary consolidation continues to develop above the 105.80 level. Bullish divergence has developed with Relative Strength Indicator moving higher as the Index set a new low last week. This is a bullish development; however the consolidation picture remains for now. The final target for the DXY remains 104, this would provide some tailwind for commodities.

 

WTI – CRUDE OIL
Price structure: Full Bull Market has failed.

This commodity is highly news driven around supply -demand. Oil tests the $75.20 level and enters a Primary down trend, the current OPu is a short-term bullish signal, traders would look for a retest of the $94.0 level resulting in further consolidation along the $75.20 support level and $94.0 resistance level.

Indicator: Relative Strength 14

The RSI running around the 50 level is a result of consolidation as upward momentum slows, recent price reversal has resulted in a sharp movement below the key level of 50 signalling decreasing price momentum. Developing Consolidation with a mixture of advance and declines sets the RSI up to continue a move around the 50 level.

Black and White Technical Report Week Beginning 05/12/2022, FP Markets
Comments from last week: Oil sets a new closing low towards the $75.20 level. The break of the September low put Oil into a Primary downtrend. This is developing the potential to break lower to test the $66.00 level, this can result in further selling as the down trend develops.

  • Black and White Technical Report Week Beginning 05/12/2022, FP Markets
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