XJO WEEKLY
Price structure: Consolidation

Following the fluid movement up of the past 4 weeks the key reversal bar in the form an OPd (outside period) has started rejection from the all-time high level of 7632.0 points. The immediate expectation is for a retest of the 7200 level as a key activity and psychological level to hold.

Retracements are part of the underlying trending action, a retracement at this level would set the Index for a push higher to new all-time highs in the coming months.

Indicator: Relative Strength 14

Relative strength has moved above the 50 level again as part of the overall directional move higher in price. Only further movements towards the 70 level will remain a bullish signal for further gains, last week the RSI value moved lower a continued move below this important level to the 50 level would signal further Bearish momentum as sentiment may change.

Comments last week: The Index remains within 20 points of an all time high following a sustained advance from the late October bullish OPu. This seasonal window has a few weeks to run, however given the already extended price movement from the 6800 lows, traders should now monitor price for a move below the 7565 level as a signal for reversal.

XJO DAILY
Price structure:  Extended move ends in reversal.

With a “Pivot reversal” in place the immediate support level of 7472 has provided some consolidation, with last Friday setting an inside day, as the market comes into balance. A break either side of the small range will give some direction in the early part of this week. Follow through lower should be expected from the large range “Pivot” bar.

Indicator: Relative Strength 14

The Relative strength Indicator (14) has turned lower into the close on Friday, as the Relative strength indicator continues to move below the 70-level following the sell divergence signal discussed last week. 

Comments last week: The last three trading days have advanced on very low volume (holiday period). With the current extended move now a bullish corrective movement, a new retest lower could be expected as a follow on from last Fridays small range reversal bar. The Weekly (above) support level remains at 7565 with the important daily support level indicated at 7472 as the primary target on any follow through price movement lower. The sideway movement of the RSI indicator against the rising price now suggests a divergence sell signal is developing. The sell signal will be validated with a movement below the 70 level. 

S&P 500 WEEKLY
Price structure: breakout meets resistance level.

Resistance at the all time high level has given way and set a reversal Pivot point, now setting the precursor for lower prices in the week ahead. With a retest of the 4545 level a strong possibility, the 4545 level providing some form of support in the coming days would be very bullish for a breakout over the 4818 level in the coming weeks.

Indicator: Relative Strength Indicator 14

Relative strength has again turned lower and moves below the 70 level towards 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 towards the 4545 level may re-assert a bearish RSI signal as the Relative strength indicator turns lower below the 50 level.

Comments from last week:

The retest of the 4818 level is being completed on short range (high to low) bars as the advance weakens. To remain bullish a close above the 4818 level must be completed on strong volume with  a strong range week showing the buyers maintain full control. The 4545 level remains as the first significant support level for a retracement target.

SPX DAILY
Price structure: Sell divergence complete.

Within the daily view some support is being provided at 4700, with the upper shadows of last Thursday and Friday, a break down lower should be expected to retest towards the 4607 level as next support. Underlying trend and price structure remains bullish. It remains the chart has several unresolved “open gaps” towards the 4,400 level and below.

Indicator: Relative Strength Indicator 14

Relative strength Indicator has moved into the 70 level indicating very strong momentum. Although not a signal of over brought, the current second and third movement into this over 70 level is often seen as a level to take profits. The Sell divergence signal is being displayed and completed with the market setting a new closing price high as the indicator sets a lower high.

Comments from last week:

The Opd of 2 weeks ago remains the dominant influence in this Daily view of the S&P 500. For the bullish the low of the OPd tested the 4700 level with an immediate reaction higher. Last Friday set a pivot reversal pattern, although the closing price was well off the low of the day. Currently a Sell divergence signal is being displayed with the market setting a new closing price high as the indicator sets a lower high, the sell signal line remains at the 67 level.

NASDAQ DAILY
Price structure: Sell divergence signal complete.

The follow through from the Pivot point towards the 16,300 level has not been a decisive movement with some overlapping price ranges. Further consolidation above the 16,000 level would be a very bullish signal for the current rally from the October 2023 low to continue higher. The underlying Primary trend remains UP.

Indicator: Relative Strength 14

Relative strength has again moved to the 50 range, it remains an area to monitor for and further exhaustion reversal..

The observance is the overall Relative strength is again falling as the underlying price movements of the Index move to set closing price lows. The RSI should now be monitored for a further turn lower indicating a change too negative momentum and completion of the divergence sell signal indicating a major top in place.

Comments from last week:

With the Index setting a new high following the OPd set 7 periods ago, the price ranges have become less decisive with q reverse pivot point being set last Friday. The Index remains vulnerable to profit taking with the first real support level shown at 15,932. The current underlying Primary trend remains UP. The Index remains “extended” from the 200 day moving average, with a potential top developing. The RSI should now be monitored for a further turn lower indicating a change too negative momentum and completion of the divergence sell signal indicating a top in place.

USD Spot GOLD – DAILY: Bull Trap at the 5th High?

The current retest of the short-term trend line is a strong indication the current UP trend is intact with a potential retest of the impulsive high set late November 2023. Last Friday set an OPu range which remains a bullish signal of support for the underlying trend. A further break of this short term trendline would send a bearish signal to short term traders for a retest of the $1982.0 level again.

Indicator: Relative Strength 14

The RSI turning lower from below the key 70 level, turning with the falling price, current consolidation in price with a breakout lower will move the indicator lower, a Relative strength reading below 50 indicates bearish momentum. Long term traders should continue to monitor this long term Daily chart for a 5th major yearly top in progress at $2072.0 with further declines in the long term.

Comments from last week:

The potential remains for a retest lower below the key $1982.0 level to $1960.0 The underlying Primary trend has been established as a bullish trend, only a close over the $2072 level with a follow through higher will give strong indication of a new bull market underway. In the short term the $2049 -50 level may provide some immediate support on profit taking at this level. This PM market remains at an inflection point for buyers, only further closes above the $2072 level would be deemed bullish.

SILVER
Price structure: Early Down trend

Silver again retests the $23.0 level with some indecision bars set last Thursday and Friday. This pattern is a Bearish consolidation with he potential for a price move lower towards the $22.09 level. Silver remains within a large consolidation zone below $26.40 and above $22.09.

Relative Strength 14

Current Relative strength has turned higher from below the 50 level to move sideways at this level, indicating momentum has turned neutral, if the RSI continues lower, the bearish momentum signal will show a continued price movement lower. Only a continued move higher would reflect a solid change in the underlying price momentum would alert to a potential new trend and breakout.

Comments from last week:

 Strong rejection (OPd) from below the $24.60 level to see an engulfing reversal decline towards the Head and shoulder neckline at $23.0. Last week saw another rejection at the $24.60 level, Silver remains within a broad trading range between $22.09 support and $26.20 resistance with no identifiable Primary trend.

AUSTRALIAN VOLATILITY INDEX: The equities traders compass.

The current volatility closing value has moved to the 11 level, closing lower the XVI is within the “complacement” level. With the indicator now pushing slightly higher the forward pricing of PUT options is now increasing, this is observed against a rising market indicating equity price movements may turn bearish as the cost of 3 month (insurance) Put Options is increasing (high demand).

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

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.