XJO WEEKLY
Price structure: 2nd Inside range

This Weekly XJO displays a 2nd Inside range, with a high close within the range, this current phase suggests that the market is currently in a state of equilibrium, with buyers and sellers in a stalemate. This pattern is often indicative of a period of indecision in the market. Traders are observing this closely, as a breakout from this inside range higher or lower will signal the next significant price move. The direction of this breakout will be crucial in determining whether the market will continue its bullish trajectory or reverse trend. The current price structure implies that the market is waiting for a catalyst to push it out of this consolidation phase.

Indicator: Relative Strength 14:  Bullish

Relative strength has turned higher in line with the rejection of lower prices, and moved above the key 50 level indicating overall Bullish momentum. Only further movements higher towards the 70 level can set a continuing bullish signal for further higher price movements.
Should the RSI turn further lower to move to or below the 30 level, the strong indication is for negative momentum to develop leading to Trend failure and further declines.

Comments last week: The Index has set an inside range as it holds support, indicating a potential consolidation phase before the next directional move. This inside range formation suggests that the market is currently indecisive, with neither buyers nor sellers taking strong control. Traders will be closely watching for a breakout from this range to determine the next significant price movement. Maintaining support within this range is crucial for sustaining bullish momentum in the short term.

XJO DAILY
Price structure: Higher low Pivot.

Further confirming the bullish outlook highlighted earlier. This higher low, in conjunction with the bullish pivot point, indicates that the market has found strong support and is likely to resume its upward trajectory. Currently the 8083 level remains a strong support with first resistance shown at 8330 points.

Indicator: Relative Strength 14:

The Relative strength Indicator (14) has turned higher into the close last Friday and has moved again to the important 50 level, the overall RSI trend shows slowing momentum. With the move lower below the 50 level, Traders would be looking for further Sell signals should a continued lower price move occur with the RSI closing below the “30” level targeting 20.

Comments from last week: The a,b,c pattern movement observed indicates a potential bullish continuation pattern that has followed through with the Pivot point reversal. This pattern, often seen in market corrections, implies that the market found support at the completion of the ‘c’ wave, potentially leading to a resumption of the upward trend. Traders are closely monitoring for signs of this reversal, particularly looking at key resistance levels, such as the 8330 level, which, if breached, could validate the bullish outlook.

S&P 500 WEEKLY: Support holds. 

The S&P 500 has maintained its critical support level of 5853 points, reinforcing the bullish sentiment for the time being. However, traders should stay vigilant as the market presents mixed signals. The interplay of support and resistance will shape the early weeks of 2025. Close attention to these levels will be key to navigating the market’s next moves going into the change of President in the US. 

Indicator: Relative Strength Indicator 14. 3rd Divergence in the background

The Bearish Divergence observed in the Relative Strength Index (RSI) signals a potential reversal in market sentiment. This occurs when prices continue to rise while the RSI trends lower, indicating weakening momentum despite higher prices. This is often interpreted as a warning of an impending downturn. In the current analysis, we see the RSI showing a longer-term Bearish Divergence against the rising price trend, suggesting caution. If the RSI crosses below the key threshold of 50, it may confirm a bearish outlook.
Comments from last week:  The current inside range has held support at 5853, a crucial level that traders will be monitoring closely. This support level acts as a significant barrier against further declines, maintaining it could reinforce the bullish sentiment. As the market consolidates above 5853 points support level, the potential for a breakout remains high, and traders are keenly observing any signals that may indicate the next directional move. The interplay between support at 5853 and resistance levels of 6100 will be decisive in shaping the market’s trajectory in the early weeks of 2025.

SPX DAILY Price Structure: Daily Pivot point

The current daily consolidation reflects a market that is consolidating, with traders weighing the Bullish and Bearish signals presented. The interplay between the relative strength index (RSI) and the price movements is critical at this juncture. As the RSI hovers around the 50 level and showing a Bullish divergence it serves as a pivotal point that will reflect future market movements. A sustained move above this threshold may invigorate bullish sentiment, while a decisive reversal below it could lead to a very Bearish outlook.

Attention must be paid to the rising wedge, which can denote significant reversals. The market’s ability to maintain support at key levels, such as 5853 points, is crucial for sustaining the bullish narrative in the coming week. 

Indicator: Relative strength 14. Bullish Divergence

Relative strength Indicator has turned higher and remains below the 50 level into last Friday’s close, traders should consider a further decline below the 50 level as a strong Sell signal. Only with a continued move higher back above the “50” level the expectation of further advances remains. Relative strength also shows a bullish divergence signal, only the swing higher over the key 50 level would set a further strong Bullish signal that would set the Index back on a path to 6100.

Comments from last week: The daily chart of the S&P500 reveals a back test of the rising wedge pattern, which denotes a potential reversal lower in the near term. This back test suggests that the market is re-evaluating its recent movements and could be setting the stage for a significant directional change. The wedge pattern, often viewed as a bearish formation, indicates that despite the recent consolidation, there is a high probability of a breakout to the downside. Traders are observing the interaction of the price with key support levels very closely to anticipate the next move.

NASDAQ (100) DAILY Price structure: Lower Channel retest

As we observe the daily pivot point, following the Fake out low point showing an immediate reversal.  It is essential to note how the RSI trends around the critical 50 level, potentially dictating future market movements. A rising wedge pattern has also emerged, often denoting possible reversals. The market’s ability to sustain support at crucial levels, such as the 21,340 points, will be pivotal in maintaining a bullish narrative. This week traders should look for a close over this critical level, before a retest of the 22,000-point level.

Indicator: Relative Strength 14: Bullish

Relative strength has now turned sideways to higher while moving back to the 50 level, indicating improving momentum as price also moves higher. The rising RSI over the 50 value can provide some early insight for Major Primary UP trend. A further move lower towards the 30 level would send a very Bearish signal not to be ignored.

Comments from last week: The OPu discussed last week has followed through with a higher price being set, only to find the Index is now testing the inside of the lower channel line. This movement highlights the persistent volatility and the delicate balance between bullish and bearish forces within the current market. Traders are now closely monitoring the Index’s interaction with this lower channel line, as it could be a critical juncture for determining the next significant move. Whether the price will rebound and maintain the upward momentum or break through the support, leading to a bearish continuation, remains to be seen. The coming days will be pivotal in shaping the market’s direction for the early part of 2025.

USD Spot GOLD – DAILY: 2nd Trendline support

Gold has posted a second trendline support point, indicating that the precious metal is holding firm against downward pressures. This support level is proving to be a critical juncture for market participants, as it not only underscores the resilience of gold but also sets the stage for potential bullish reversals in this pennant formation with three low points. Traders are closely monitoring this development, as a sustained defence of this trendline could catalyse a renewed upward momentum.

Indicator: Relative Strength 14: Swing Lower continues.

The RSI has turned sideways and lower to finish at the 50 level again. This is a bearish signal, and it remains a strong observation price is losing upward momentum. Further declines in the coming weeks will remain a very Bearish signal.  Price decline from this level will see the RSI move lower towards the 30 level. This is the message from this momentum indicator, consolidation can signal changing of directional momentum.

Comments from last week: Gold has found robust support at the current trendline, which has been a critical level for maintaining the bullish outlook. This trendline, which has acted as a reliable support level in past market cycles, is once again proving its significance. Traders should closely watch this support level to determine if it will hold and foster a potential reversal higher in the short term. The confluence of technical indicators (RSI) at this juncture suggests that a sustained break below this trendline could lead to increased selling pressure, while a rebound would reaffirm the bullish momentum.

SILVER Price structure: Bullish reversal

Silver has set a second retest of the $28.80 support level with a bullish pivot point in place. This double low development is crucial as it suggests a potential shift in momentum. If the support at $28.80 holds, it could mark the beginning of a bullish reversal, encouraging Bullish traders to adopt a more optimistic outlook. The ability to maintain this level will be instrumental in determining the future trajectory of silver prices out of the current Downtrend.

Relative Strength 14: Bullish Divergence

Relative strength is now moving in line with the underlying reversal price structure. The current reading remains below the key 50 level, showing increasing Bullish momentum.  This indicator should be monitored for a BUY divergence signal, completed with a closing price above $29.60.

Comments from last week: Silver remains within a Primary downtrend, characterized by a very large consolidation range that finished with an OPd last Friday, as prices test past support and resistance levels. This behaviour is typical of Silver’s cyclical nature, where historical price patterns play a significant role in current market movements. The ongoing consolidation phase, marked by low volatility, serves as a critical juncture where traders assess the strength of support at the $28.80 level, the first significant support level at $27.00 dating back to March 2022.

AUSTRALIAN VOLATILITY INDEX: The equities trader’s compass.

The current volatility closing value has moved higher to close below the key 11 level following a large spike higher during the week.  Current closing value indicates the XVI volatility level in the Complacement level for Equities as the market volatility begins to see lower priced PUT option insurance to cover portfolio risk. 

With the indicator value moving higher Mid-week, the forward pricing (Volatility) of PUT options (insurance) is increasing, however this is observed against a Bullish advance in the market, indicating market participants believe equity price movements may turn higher in the short term. 

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

The cost of 3month forward PUT options is moving lower from recent higher levels over 13.

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 this longer dated forward price change, or “skew” in pricing is measured in this XVI. The XVI value works as an inverse correlation to the underlying market.