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Index and Commodities Trading Week Beginning 02/10/2023

Index and Commodities Trading Week Beginning 02/10/2023, FP Markets

Price structure: Remains Bullish

The small weekly range indicates the market has moved into balance during the last week of the Quarter. Strong support is indicated between the 7000 and 7070 midpoint from the March impulsive range. Historically, October remains a bullish month, with a closing price over this current inside range (IPd) a positive indication of forward price movements would be given. No Primary trend is evident.

Indicator: Relative Strength 14

Relative Strength has moved below the 50 level again (just) as part of the overall change in momentum. Only further movements over the key 50 level towards the 70 level will remain a bullish signal for further gains; a continued move below this important level would signal further Bearish momentum as sentiment currently remains weak. A cross above the 50 is a bullish signal.

Index and Commodities Trading Week Beginning 02/10/2023, FP Markets
Comments last week:
An expanding range to the downside with the test below the 7000 level, finding buyers willing to lift the index back towards the 7070 midpoint level. Consolidation continues with the sellers unable to take the market lower and buyers not willing to take the market higher. No Primary trend is evident.

Price structure: Early Bullish signal remains.

The small outside range last Thursday shows sellers have failed to move the market lower. However, some resistance at 7070 is evident in the Daily view. The most important support level was the FO low 2 weeks ago; a break of this level would show sellers in control. The current breakdown below the trendline is bearish; however, a positive start to the week may see a trendline retest towards 7200.

Indicator: Relative Strength 14

The Relative Strength Indicator (14) has turned higher, as the Relative Strength Indicator still remains below the 50 level, only offering a bearish indication; any reading above the key 50 level shows price momentum is positive. Traders should monitor this for a further move higher on continued strength in price movements, indicating an increase in bullish momentum.

Index and Commodities Trading Week Beginning 02/10/2023, FP Markets
Comments last week: A very strong “hammer” reversal bar should not be ignored for a continuing movement higher. The “FO” low of the range moving below the July low and immediately reversing remains a strong indication of buyer support following a strong movement down from the 7290 level. The break of the trendline and the move below the 200-day moving average should not be ignored for the bearish implications.

Price structure: Lower high.

The S&P has now set a primary down trend move with the close below the recent low point of 7 weeks ago. The current retest of the Trendline at the 4200 point support level is an important level to hold in the first week of October. In the coming weeks, price failure below the 4200 may lead to further momentum selling. Look for a close over last week’s high towards 4300 for a bullish reversal.

Indicator: Relative Strength Indicator 14

Relative Strength has again turned lower and moved below the 50 level, but to remain bullish, the RSI should turn higher and remain over the 50 level with underlying price advances. The RSI rollover of the last 9 weeks indicates slowing momentum with a clear bearish divergence signal that has failed in this extended price move. In the coming weeks, this consolidation below the 4545 level may re-assert a bearish RSI signal.

Index and Commodities Trading Week Beginning 02/10/2023, FP Markets
Comments from last week: The S&P500 has now confirmed a lower high set below the 4545 level. The expanding range of last week has the potential to follow through towards the rising trendline; a move to this level would see the Index testing the 4200 level. A lower move will determine a change in the Primary trend to down. The S&P 500 looks to be entering a consolidation phase with support at 4200 and resistance shown at 4545 points.

Price structure: Looking for a continuation higher.

The Daily resistance shown at 4350 points is the go-to level for the Buyers for a solid reversal. The current price structure is a Bearish flag pattern and may first target the mid-week low that sets up the open Gap area. Further price weakness will target the 200-day moving average below the key 4200 – a bearish scenario. A solid daily cross over the 4350 level remains a bullish signal for further gains.

Indicator: Relative Strength 14

Relative Strength is pushing towards the 30 level; the movement higher last Friday is helpful as the downside daily momentum slows. For further price strength in this index, the RSI move has to be higher to sideways, remaining above the key 50 level. Should the RSI continue to move below the key 50 level, bearish price momentum may continue to play out in the coming weeks.

Index and Commodities Trading Week Beginning 02/10/2023, FP Markets
Comments from last week: With the Index now testing the 4350 breakdown level, buyer support at this level is critical before the sellers take full control of price direction. With the FO Fake Out low in place, followed by last Friday’s inside range, the market has moved into balance at this level. During the past week, a “gap open Buy” signal occurred; only the price moving higher into and past this Gap will validate the signal.

Price structure: Potential distribution top.

The potential for a Major distribution top in the Nasdaq remains. Last week’s movement below 14,665 has quickly recovered; however, the Gap higher on Friday has set a Gap open sell signal that needs to be overcome by the Buyers. A further breakdown at this level will target the 200-moving average currently at 13,600 points.

Indicator: Relative Strength 14

Relative Strength has moved higher towards the 50-level, setting a mild bullish signal as downward momentum slows, with the Relative strength decreasing as the underlying price movements of lower closing lows occur. No divergence is shown at this stage but should now be monitored for a further reversal turn lower, indicating a loss of momentum.

Index and Commodities Trading Week Beginning 02/10/2023, FP Markets
Comments from last week: The Nasdaq also remains at the breakdown level of 14,665, with an OPd outside range set last Friday. The OP ranges have a high statistical outcome of marking low or high points within fluid market movements. The Gap down last Thursday is a bullish signal if the price rallies back over the highs of that day (Thursday).


USD Spot GOLD – DAILY: Is it a Bull market? Maybe not yet.

The bullish scenario did not develop from the higher low indicating a break over $1950.0 possible. The OPd discussed 2 weeks ago has played out with momentum, selling now targeting the lower channel line circa $1810.0. Within the last week’s momentum are 2 expanded range bars indicating strong selling. The underlying Primary trend in Gold remains down. Traders should look for support above the $1800 – $1810 level.

Indicator: Relative Strength 14

The RSI turning lower below the key 30 levels, turning with the falling price, continues to be a negative observation; consolidation in price with a breakout higher will move the indicator higher. However, long-term traders should continue to monitor this long-term Weekly chart for a major yearly top in progress with further declines in the long term.

Index and Commodities Trading Week Beginning 02/10/2023, FP Markets
Comments from last week: The Gold price continues to flounder following the “Pivot Point” discussed last week. Last Wednesday, set an OPd range marking the high for the week. The Inside range set last Friday indicates a new higher low may be forming; this would be a bullish signal should the price move over the $1950 level.

Price structure: Reversal at $23.0 Support underway

With the Bear Flag initially playing out to test the $22.30 level, we note Friday’s wild swing in price has closed towards the day’s low. This is a very Bearish setup as early buyers take stops; this will be confirmed with a price break below the current support level of $22.09. It should be noted Silver remains in a Primary down trend.

Relative Strength 14

Current Relative Strength has turned lower from below the 50 level; if the RSI continues lower, the bearish signal will continue, and only a move to and above the 50 levels reflecting a solid change in the underlying price momentum would alert trader to a potential new trend. It should be noted the indicator is very close to moving back towards the 30 level as bullish momentum remains subdued.

Index and Commodities Trading Week Beginning 02/10/2023, FP Markets
Comments from last week: Silver is building a “Bearish Flag pattern; however, this type of pattern has failed before with the price increasing. The $23.0 remains the key level to hold in this continuing consolidation period. A further movement towards the $24.60 level would be a bullish indication of higher prices in the future.


AUSTRALIAN VOLATILITY INDEX: The equities traders compass.

The current volatility closing value has returned to the important mid-13- 11 level again following another wide-range week. While volatility remains at this level, overall equities sentiment remains supportive for the bullish; however, with the forward pricing of PUT options increasing, the underlying price volatility may turn bearish.

Lower consolidating commodities prices and bearish consolidation of equity prices are indicated when the reading moves above the 13 level.

For continued support of equities, the XVI should remain subdued below the “13” level.

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

The XVI is the difference between the 3-month forward pricing of ETO Options against the 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 of the underlying market.

Index and Commodities Trading Week Beginning 02/10/2023, FP Markets

  • Index and Commodities Trading Week Beginning 02/10/2023, FP Markets
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