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Index and Commodities Trading Week Beginning 06/11/2023

Index and Commodities Trading Week Beginning 06/11/2023, FP Markets

Price structure: Bullish Outside range.

From a very Bearish view on the break of a major support level, the Index has posted a Bullish outside range up close (OPu). With the close currently at an important resistance level, the price direction this week will be the driver for the coming weeks. Although too early on a seasonal basis for a Christmas rally, traders should monitor the indices for a reversal to retest the low of last week.
The Primary trend remains down.

Indicator: Relative Strength 14

Relative Strength has moved below the 50 level again as part of the overall directional decline in price. With the indicator turning higher, 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.

Index and Commodities Trading Week Beginning 06/11/2023, FP Markets
Comments last week: With a breakdown below an important support level of 6930 the index now enters a bear market with a Primary downtrend in place. Major support remains at 6400 should price weakness persist. With the month of October closing negative the statistical outcome will be for a further decline into November.


Price structure: Impulsive recovery

The bullish divergence signal discussed last week has played out with a swift reversal higher. Currently price has met the short-term down trendline. These types of violent recovery patterns indicate a short position cover and may end just as abruptly. The current price rally shows a strong impulsive range set last Friday at the trendline; further gains will test the 7090 resistance level.

Indicator: Relative Strength 14

The Relative Strength Indicator (14) has turned higher into the close on Friday, as the Relative Strength Indicator moves above the 50 level, only offering a bullish indication, any reading above the key 50 level shows price momentum is positive. Traders should monitor this for further move higher on continued strength in price movements indicating an increase of bullish momentum from the current divergence signal developing.

Index and Commodities Trading Week Beginning 06/11/2023, FP Markets

Comments last week: The daily movements show some consolidation with last Friday remaining an inside day. In line with the Weekly Primary trend, the shorter daily view shows a series of lower highs and lower lows. The other important observation is the Daily ranges are becoming shorter following the “fluid movement” lower 2 weeks ago. This can be an early signal of reversal as directional momentum slows.

Price structure: 5 waves completed

The 5-wave structure is a bullish pattern only when a confirmed reversal takes place. Last week the Index set a strong Pivot point reversal and reclaimed the 4200 point level. The strong range reversal could be expected to follow through higher in the coming week. The 4545 level remains significant resistance for the Bulls. A reversal before this level would be extremely bearish for Stocks.

Indicator: Relative Strength Indicator 14

Relative Strength has again turned higher and moved above the 50 level, but to remain bullish the RSI should remain over the 50 level with any underlying price advances. In the coming weeks, this consolidation below the 4545 level may re-assert a bearish RSI signal as the Relative Strength Indicator turns lower.

Index and Commodities Trading Week Beginning 06/11/2023, FP Markets

Comments from last week: The S&P has again confirmed a lower high (d) with a solid move below the 4200 support level (c). The next major support remains at 4050 also being the intersection of the current trendline. The S&P is in a Primary downtrend, confirmed last week with the Index posting an extended range down. The recent congestion area above 3800 provides major long-term support should the price at the 4050 level break lower.


Price structure: Short cover underway

Gaps often get filled and the S&P500 has a good track record of backfilling price gaps left open. Last week saw the Index leave 2 significant Gaps open as the recovery move got underway. At this point, the Index is making a corrective movement over the 200-day moving average and will have to confirm a trending movement in the coming weeks to affirm any real Primary movement. The first resistance level remains at 4380.

Indicator: Relative Strength Indicator 14

The Relative Strength has moved sharply higher as price momentum recovers over the 14-day look-back period. This would now be monitored for a decline below the 50 level as a signal of a failed rally.

Index and Commodities Trading Week Beginning 06/11/2023, FP Markets
Comments from last week: The Daily view of the S&P500 shows a clear breakdown below the 200-day moving average following some support over a 2-day period at the 4200 level. Currently, no reversal pattern is indicated with last Friday’s close towards the low of the day. Daily support is indicated at the 4045 level. The Index is in an extended move and may move lower on the current bearish price moment.


Price structure: Short cover Rally.

Similar to the S&P the Nasdaq has left price Gaps open, the Nasdaq also has a good track record of filling Gaps as forward prices unfold. The Primary trend remains down, currently with resistance at 15,140 remains in place and will be a significant milestone should the market move over this level in the coming week.

Indicator: Relative Strength 14

Relative Strength has moved higher above the 50-level setting a bullish signal as upward momentum comes into play. The overall Relative strength still decreasing as the underlying price movements of the Index move to new lows. But should now be monitored for a further reversal turn higher indicating a real change to positive momentum.

Index and Commodities Trading Week Beginning 06/11/2023, FP Markets
Comments from last week: A new low in the Nasdaq again confirms the Primary downtrend in place. With the 200-day moving average in sight, the 14,000-point level remains the short-term target. Major support is next indicated at the 13,200 point level with an “open GAP” remaining at this level. Last Friday’s inside range “retesting” the 14,400 level is a bearish signal with the day closing towards the low of the range.

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

The strong corrective move set 3 weeks ago has stalled into consolidation at the $1982 level. Of concern is the Outside range (OPd) marking a high, the price needs to regain this level quickly to keep the buyers intact. The Primary trend is changing, with a further breakout the Gold market will enter a Primary up trend. At this point, the Gold chart remains in a corrective move off the early October lows.

Indicator: Relative Strength 14

The RSI turning higher from below the key 70 levels, turning with the rising price continues to be a positive observation, consolidation in price with a breakout higher will move the indicator higher, and a Relative Strength reading over 70 indicates strong momentum. However long-term traders should continue to monitor this long-term Weekly chart for a 4 th major yearly top in progress with further declines in the long term.

Index and Commodities Trading Week Beginning 06/11/2023, FP Markets
Comments from last week: The $1982, level provided some resistance in the past week; however, the strong move last Friday puts Gold on target to test the $2049.0 level. As no “trending” action is evident the current move remains a “corrective move” and may be subject to sharp profit taking with a retest of the $1982 level a strong possibility and should be factored into traders risk.


Price structure: Head and Shoulder pattern

The inverse pattern in Silver remains intact with what could be an early breakout in price following some consolidation. Silver remains within a Primary downtrend and only a breakout over the $23.80 level will change the underlying trend. Last Friday’s outside range is a bullish signal as the range is larger than the bars within the consolidation area, this is a very positive setup for further gains.

Relative Strength 14

Current Relative Strength has turned higher from below the 30 level and crossed the key 50 level, if the RSI continues higher, the bullish signal will continue, only a move to and above the 70 level reflecting a solid change in the underlying price momentum would alert traders to a potential new trend.

Index and Commodities Trading Week Beginning 06/11/2023, FP Markets
Comments from last week: The current “Bullish Flag” is very positive for further gains, the Daily chart clearly shows an inverse Head and Shoulder pattern developing. The breakout of the right shoulder would target the MAJOR resistance level of $24.60 first.


AUSTRALIAN VOLATILITY INDEX: The equities traders compass.

The current volatility closing value has moved inside of the 13 level again following another wide range week higher.

While volatility remains at this level overall equities sentiment remains supportive for the BULLISH view, with the indicator pushing lower the forward pricing of PUT options is now decreasing, and the underlying price volatility may remain bullish.

Higher consolidating commodities prices and bullish consolidation of equity prices are indicated when the reading moves below 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 06/11/2023, FP Markets

  • Index and Commodities Trading Week Beginning 06/11/2023, FP Markets
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