XJO WEEKLY    

Price structure: 5 Wave pattern.

The Index has continued lower through key support levels to retest the 7910 level with a Bozu close indicating a close on the low of the range. This type of close can represent exhaustion of the move and can lead to a Bullish reversal during this week. The current move also completes the 5 wave topping pattern a series of higher highs and lower lows in development since Q4 2024.

A further close below 7910 would target 7632 points.

Indicator: Relative strength 14: Sell

Relative strength has turned lower in line with the reversal in the Index and has moved below the key 50 level. Only further movements higher towards the 70 level can set a continuing bullish signal for further higher price movements.
The RSI turning further lower to move below the 30 level, is a strong indication is for negative momentum to develop leading to Trend failure and further declines.

Comments last week:-  The XJO has set a clear breakdown from the 14-month rising channel, the Index may be entering a corrective movement decline. Support at 8083 is yet to be tested, to remain bullish this level should provide a reversal signal. On price declines Index value can retest initial breakout levels, in this case the 7910 level and the Q1 2024 period breakout at 7632 points. At this current level the XJO has erased al of 2025 gains.

XJO DAILY  

Price structure:  No 200 SMA support.

The Daily chart of the XJO shows last Fridays range as an extended range Candle and price move well below the 200 day simple moving average and closing on the low of the day.

This can represent an exhaustion move by the sellers. History shows a strong reversal can follow this type of movement. Confirmation would be a strong bullish bar or consolidation above the 7910 level.

Indicator:  Relative strength 14:  Bearish

The Relative strength Indicator (14) has moved below the important 50 level and below the 30 level, the overall RSI trend shows slowing momentum associated with the current larger trading ranges. This is an exhaustion signal, a move lower further below the 30 level is now possible. Traders would be looking for further Buy signal should a the RSI close above the “30” level targeting towards 50.

Comments last week. The Daily view of the XJO highlights the breakdown below the 8330 level with the small back test of this level. On a Daily basis this is the level for the Index to break through higher before a Bullish view can be developed. The expanded range set last Friday may see some  follow through early this week.

S&P 500 WEEKLY:  Retest of Support

The S&P500 closes at 5666.0 points in this retest of the 5670 support level. The immediate reversal at this level would give weight to support at this level holding this trading week. The extended range shows sellers in control with buyers entering at support. Consolidation between support at 5670 and resistance of 6100 has the potential to further develop over the coming weeks.

Indicator:  Relative strength 14.   Declining momentum.

The Bearish Divergence has played out in the Relative Strength Index (RSI). The current movement lower, shows declining price momentum in this consolidation area, only a further move back towards the 50 level will confirm the bullish signal.

If the RSI crosses below the key threshold of 30, it will further confirm the loss of momentum.

Comments from last week.:  Currently a price channel is developing in the Weekly S&P500 with Resistance at 6100 points and Support showing at 5853 points. Last week the 5853 level was tested in confluence with the rising channel line. To confirm a top pattern is developing a breakdown below the 5853 level is required, this would setup a potential retest of the 5670 level and put the Index into a corrective movement lower.

SPX DAILY    Price structure:  Testing Support

The failure of Daily support at 5832 saw the index retest next lower support at 5670 with a strong close back over the 200 day moving average. A potential retest lower towards the 200 day moving average has been discussed for the past few weeks. The secondary type price consolidation at this support level and the close above the 200 day moving average is building a strong reversal pattern. Traders should look for a further close over the 5832  points to confirm a reversal pattern is in place.

Indicator: Relative strength 14. 

The Relative Strength Indicator (RSI) has moved below the key 50 level and moving sideways, suggests that with the consolidating prices, momentum has now turned neutral. If the RSI falls further below the pivotal 50 level, it will likely confirm a bearish outlook, leading to further downside targets and a potential retest of the 5600 level.

Comments from last week:  The Pivot point reversal discussed last week has followed through to retest the 5832 support level. The Price Gap set during January 2025 has now been closed, highlighting the bearish sentiment prevailing in the market. As a result, traders are monitoring closely for further developments, particularly looking for any signs of a continued downward corrective price movement. The rally last Friday may be a short covering move and does not indicate a bullish reversal, because of its range this piercing Bullish candle can lead the index higher, only confirmed with a close over 6020 points.

NASDAQ (100) DAILY Price structure:  Potential reversal

Buyers have defended the 20,236 level mid last week with a retest of the 20,690 level before the price move below the 200 day simple moving average. The high close in last Friday’s range suggests follow through higher in the short term this week. Traders would look for a close above the 20,236 level as further buyer support. The recent move from the 22,133 level is corrective, sharp rallies can punctuate this type of decline. The chart must display a reversal pattern to confirm the potential swing point.

Indicator: Relative strength 14: Bullish turn

Relative strength has now turned lower and moving below the 50 level, indicating negative momentum as price moves lower. With the consolidation of price around the 200 day moving average the RSI is moving sideways showing a loss of downward momentum. Only a  rising RSI over the 50 value can provide some early insight for the current Major Primary UP trend to develop further. A further move lower below the 30 level would send a very Bearish signal not to be ignored.

Comments from last week.  During last week the 20,900 level was defended on Tuesday and Wednesday, however last Thursday set a very strong impulsive range to close towards the 200 day moving average.

This strong price pattern has developed into a broadening Top formation in the past weeks confirmed by the current breakdown. The key level this week is the Support – Resistance level of 20,690 with a close over the 20,900 level to keep a bullish view.

USD Spot GOLD – DAILY:  Bullish

The confirmed Pivot point being set higher than the $2790 level indicates the Bullishness of buyers to enter the market higher than a key support level. With the underlying Primary trend being reaffirmed traders could consider a further higher close over the $2943.0 level as a strong bullish move. The potential retest of the $2970.0 level remains a possibility with the current price moves overlapping as a potential swing point lower may develop. Secondary price consolidations indicate a market in balance.

Indicator:  Relative Strength 14:  Swing lower.

The RSI has turned higher to remain above the 50 level. This is a bullish signal, however it remains a strong observation price has lost its strong upward momentum. Further declines in the coming weeks towards the 50 level will reflect the potential for further consolidation at these current levels. Longer term holders and traders should now monitor the RSI for a divergent Buy signal.

Comments from last week: With the short term trendline failing to provide some form of immediate support, price has set a low at $2832.0. The potential for a full retest of the $2790 level remains. With the solid close off the Friday low, a retracement could be expected. The overall Bullish move has been broken on the Pivot point set last Tuesday; some consolidation could now be expected below the key $3,000 level.

AUD GOLD – DAILY: Consolidation

Gold in Australian Dollar term remains resilient above the $4,500 level. A combination of the rising USD Gold price coupled with a rise in the $AUD has maintained the price in the $4,600 area. As the USD Gold price consolidates, the expectation remains for the AUD Gold price to remain supported above the $4,500 level. A close below this level would indicate a short-term top in place and would set a bearish tone in the Australian Gold producers.

Indicator:  Relative Strength 14: 

The Relative Strength Index (RSI) is showing a consistent move above the pivotal 50 level. This persistence above the 50 midline suggests that the bullish momentum is not only intact but may strengthen. Traders are advised to watch for any minor pullbacks as potential buying opportunities within this broader uptrend, as the overall market sentiment remains strongly in favour of continued gains.

Gold in Australian Dollar term remains resilient above the $4,500 level. A combination of the declining USD Gold price and the solid decline in the $AUD has maintained the price in the $4,600 area. As the USD Gold price consolidates, the expectation remains for the AUD Gold price to remain supported above the $4,500 level. A close below this level would indicate a short-term top in place and would set a bearish tone in the Australian Gold producers.

SILVER Price structure:  Trading range

As discussed last week a retest of the $32.50 level is underway following the Pivot point set last Monday. A further price move higher will indicate an UP trend is now developing with a potential retest of the $36.30 level. The $32.50 has developed into a major area of interest for traders as this level constantly shows profit taking resistance. A strong close above this level will be very bullish for further gains.

Relative strength 14:

Relative strength is again moving in line with the underlying short term reversal in price. This indicator should be monitored for a swing back towards the 70 level, completed with a continuing closing price above the $32.50 -$33.0 level.

Comments from last week. The (FO) fake out high set 3 weeks ago remains the key high point for Silver. Last week significant price decline to close below the $31.50 level again suggests Silver is not within a Bull market structure but remains in consolidation. The expectation this week is for a retest of the $32.50 level. A further decline below $31.0 would set a very bearish tone as the RSI remains below the key 50 level.

AUSTRALIAN VOLATILITY INDEX:  The equities trader’s compass.

The current volatility closing value has closed above the key 13 level following a large spike lower during the week.  Current closing value indicates the XVI volatility level has moved to a Bearish level for Equities as the market volatility begins to see mid-week higher priced PUT option insurance to cover downside portfolio risk.

With the indicator value moving higher Mid-week, the forward pricing (Volatility) of PUT options (insurance) was increasing, this is observed against an overall Bearish decline in the market. Volatility now rules in this current XJO200 corrective phase.

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 corelation to the underlying market movements.

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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 statements. 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.

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