Market technician’s view of charts that effect Equities

US reporting has resulted in 3 key events last week:

1. Strong earnings from Apple with a focus on sales in India.

2. The sale of First Republic Bank to JP Morgan Chase alleviating some concerns about further bank runs.

3. A Strong Non-Farm payroll report keeping the unemployment rate at 3.4%, all indicators together resulting in a strong Index reversal signals, that have the potential to follow through in the Australian markets sentiment this week.

Key chart levels are indicated as levels of trader confidence and will reflect strong or weak overall confidence in the underlying equities.

The Sector to watch again this week is the XFJ Financials with the potential for the major banks setting a technical base after many years of consolidation, this may lead to a breakout to the high side for this sector. With the Australian banks reporting strong earnings as a result of increasing interest rates, only the increasing provision for bad debts could sour investors appetite for further
accumulation.

XJO WEEKLY
Price structure: Primary UP trend remains in place.

The Bullish flag discussed last week has failed into a new low testing below the important 7200 level, setting an OPd (Outside period down close) in the process. Weakness in commodities and the
4 major banks have moved the Index lower. However the important observation is the Index closed back above the 7200 level indicating buying support. This current price channel beginning from the 6400 low is an important development potentially leading to a retest of the 7565 level in the coming weeks.

With the heavy weighting of the banks and industrials within the Index this type of Index consolidation will be heavily reflected in the top 20 index components with investors being offered a strong signal for further gains. With the Index currently sitting above a very important level, the indication of trend failure is close by with a solid close below this key level, the sellers will have gained control with the 6900 once again being the target. It is important to note the underlying

PRIMARY trend is UP.

Indicator: Relative Strength 14

Relative Strength has remained above the 50 level (just) as part of the overall change in momentum. Further movements over the key 50 level towards the 70 level will remain very bullish for further gains, a cross below this important level would signal Bearish momentum and sentiment.

Comments last week: The XJO has continued a consolidation pattern under the 7370 resistance level, last weeks small range bar has followed the Fake-Out (FO). These types of retests of overlapping price ranges, show currently consolidating sentiment can develop in this case at a level below 7370. The potential for a solid close over 7370 remains with the next target at 7565.

XJO DAILY
Price structure: Sentiment remains positive.

As part of the recovery above the 7200 level the Index viewed in the Daily time frame has set a bullish reversal in the form of a bullish pivot set last Friday. The prior decline from the 7370 level has set a measured decline in the form of an a, b, c pattern. This is a very bullish setup, with the observation of being wrong close by only with a closing price below the pivot point low at point (c).

Also of note on this chart is the 200 day simple moving average turning flat with the Index value remaining above the average. Sentiment remains positive within the index components, with the top 20 remaining resilient and supported within very strong trading ranges.

Indicator: Relative Strength 14

The Relative Strength Indicator (14) turned bearish during the decline remains very bearish while below the 50 level, as any reading over the key 50 level indicates price momentum remains positive. Friday’s turn higher, is a positive shift in momentum and may improve in the coming days, bearish traders should monitor this for a turn lower indicating a loss of positive momentum.

Comments last week: The daily chart displays the bullish flag developing below the 7370 level, the lower daily shadows indicate buyer support on a daily basis. Short term traders should look for a change to positive sentiment.

Australian Financials Index XMJ: Looking for immediate reversal

The XFJ continues to trade within a wide range extending back to 2006, the current “corrective wave” set a low at 5966 points with the current retracement finding resistance at 6354 closing price support / resistance level developed from the December 2022, 6354 point closing low. Current underlying bank stock prices also reflect the long consolidation period with the dividends offering a
yield around 6.5% remaining attractive for long term holders. Last week’s OPd indicates potential reversal higher underway following the retest towards the 5966 and tentative trendline, finally the close remaining well above the low for the weekly session is a strong positive.

Relative Strength has moved below the key 50 level, indicating slowing price momentum, this is typical of the RSI during price consolidations, a further move below this level would also activate
the Stop loss.

S&P 500 WEEKLY
Price structure: Continuing Bullish consolidation

The Weekly chart is currently developing a very bullish ascending triangle, with the continuing resistance level of 4200 still in play. The current 2 nd outside range may pose a short-term resistance
point for Monday-Tuesday. Traders should look for a solid close over this 4200 level as a signal of price strength. With breakout comes retest, for sentiment to remain strong a retest of the 4200
must provide support. Based on the introduction notes above this chart remains very bullish.

Indicator: Relative Strength Indicator 14

Relative Strength is traveling over the key 50 level but to remain bullish the RSI should continue to turn higher over towards the 70 level with further underlying price advances.

Comments from last week: The Weekly chart is currently developing a very bullish ascending triangle, with the continuing resistance level of 4200 still in play.

S&P 500 DAILY
Price structure: 2nd Swing low in place

Although the Weekly Chart (above) resulted in an Outside period, the daily chart suggests further upside in the short term following the FO (Fake Out bar) again testing below the 4067 level. This
bullish pivot following some very positive developments in the US macro scene would indicate a retest towards the 4200 level is underway again. The biggest driver may be a short squeeze in the
regional banks the liquidity position is resolved with US Government support.

Indicator: Relative Strength 14

Relative Strength is above the 50 level, as momentum turns positive. Further price strength for this index will see the RSI move higher above the key 50 level, with the RSI continuing to rise above the key 50 level further bullish price momentum would remain.

Comments from last week: The bullish flag described last week has initially broken down thru the 4067 level with an immediate reversal to close over the key 4130 level, such is the current volatility. The critical observation is the strong impulsive movements of last Thursday setting a pivot point and Friday following through.

NASDAQ DAILY
Price structure: Pivot point following the 3 Bar swing low

The price decline last week has setup a further bullish pivot point pattern with a solid close over the 13,200 level, the pivot point low set last Thursday also indicates a higher low in place. The underlying primary trend is UP with the expectation of further gains within the current price structure. Strength in this chart will be confirmed with a further close over the high at the FO point
3 providing the potential for a significant short squeeze, ultimately pushing price higher.

Indicator: Relative Strength 14

The Relative Strength Indicator moving back above the 50 level with the current price breakout. This is a strong development, but should always be monitored for a decline below the 50 level indicating an underlying change in momentum.

Comments from last week: The Nasdaq produced a new higher low with a key “3 bar reversal” pattern and a small “bear trap” during the past week, with the current bar setting a “fake out” over the 13,200 level, a short-term top may in for the next few days.

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

The Gold price retested towards the $2072 level last week following the close over the important $2020 level, this is the 3 rd attempt at this level, with the first attempt set during August 2020, the
second during March 2022 and last week’s daily movement again setting a high with a Bearish pivot point reversal following on Friday. This now represent a significant bearish triple top in place, with the potential to retest the $1550 level should the full pattern play out over the coming months. A Bullish picture for Gold will only take place with a closing price over the $2072 level in a relatively short time, within the next 6 trading periods will offer some insight to the underlying strength.

Indicator: Relative Strength 14

The RSI declining sharply back towards the 50 level and showing a diverging decline against the consolidating price pattern is a normal occurrence in price consolidation patterns. With the RSI at
risk of moving below the key 50 level, traders should monitor this chart for a short term top in play.

Comments from last week: Last week again proved the $1982 level as key support following the short price movement below this level. The pivot point bar of 6 weeks ago remains the dominant trading range holding the price down. The potential is for a short term top to develop as current price movement remains below the “midpoint” of the pivot bar as this consolidation had not moved above the $2049 high within the following 6 bars, the structure is now deemed as a bearish setup. Only a closing price towards the $2020 level would negate this view. With the RSI at risk of moving
below the key 50 level, traders should monitor this chart for a short term top in play.

SILVER DAILY
Price structure: Bull market – Maybe not

Silver has again failed at the important $26.20 level, the third attempt to cross this level has failed with an OPd Outside range, the whole structure remains well short of the $30 highs set during
February 2021. The high close within the range last Friday will need to follow thru in the coming days to help traders remain positive in the current price structure.

Relative Strength 14

Current Relative Strength has turned lower from over the 70 level, the current movement is moving towards the 50-level, setting up a strong divergence signal With the RSI turning lower only reflects the underlying upward momentum turning lower (slowing) but remaining relatively positive while above the 50 level. A continuing move below the 70 and 50 level and lower would be very bearish signal in the short term.

Comments from last week: Commentary around Silver remains the same as last week, following the OPd top bar the price of Silver has begun a consolidation phase above the $24.40 level. The $24.61 low set on the 19/4 will remain the key support bar in the coming days. This consolidation phase remains bullish for further gains until a close below the $24.40 is followed thru with further
lower closes. Resistance remains at $26.20, a price close over this level would be a very bullish development.

AUSTRALIAN VOLATILITY INDEX
The equities traders friend

The current volatility remains below the important 13 level. While volatility remains at this level equities sentiment remains mildly bullish.

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

IMPORTANT DISCLAIMER

The information in this report is of a general nature only. It is not personal financial product advice. It does not take into account your objectives, financial situation, or needs. You should therefore consider the appropriateness of this general information in light of these. The Australian School of Technical Analysis (www.astatrading.com) recommend that you refer to the Product Disclosure Statements of any financial products which are discussed in this report before making any investment decisions. ASTA accepts no responsibility for your actions and recommends you contact a licensed advisor before acting on any information contained in this general information report.