XJO WEEKLY    

Price structure: Bullish retest

The S&P/ASX 200 Index (XJO) has set a short-range trading week, with a retest of the 8083 support level mid-week. This suggests that the market is consolidating, with traders closely watching whether this level will hold or break.

A retest of 8083 is particularly significant because market participants are watching closely to see if this level can hold. If the price action shows a robust bounce, it can reaffirm the strength of this support zone and signal renewed buying interest. Conversely, a decisive break below 8083 might indicate that the support is weakening, potentially leading to accelerated selling from a shift in market sentiment.

Indicator: Relative strength 14: Positive upward momentum.

Relative strength has turned sideways in line with the consolidation movement in the Index and remains above the key 50 level after 8 weeks below this critical level. Only further movements higher towards the 70 level can set a continuing bullish signal for price movements.
The RSI turning further lower to move below the 50 level, is a strong indication is for negative momentum to develop leading to Up Trend failure and further declines.

Comments last week:-  The XJO has broken above the critical support – resistance level of 8083, signalling strong bullish momentum. This breakout confirms buyer dominance, as the index has surpassed a key technical barrier that had the potential to cap upward moves. The expanded weekly range low to high further supports this view, indicating increased buying pressure and participation, with higher highs and sustained closes above the resistance zone. The 8083 level now acts as immediate support, Traders should watch for a retest of 8083 as support to confirm the breakout’s strength.

Additional support is likely above the prior consolidation zone around 7910 if a deeper pullback occurs.

XJO DAILY  

Price structure:  Consolidation above 200 SMA

When the daily chart shows that the XJO Index has moved above its 200-day simple moving average, it marks a significant technical milestone. The 200-day moving average is a widely respected gauge of long-term trend, with the index trading above it suggesting that the broader market sentiment could be shifting from bearish to bullish. The strong close for the week adds even more conviction to this signal. A robust weekly close typically indicates that buying pressure prevailed despite any intraweek volatility. It means that as the market session ended, buyers were in control, absorbing any selling pressure.

Indicator:  Relative strength 14:  Neutral

The Relative strength Indicator (14) has moved above the important 50 level after the initial fall below the 30 level during the C wave movement, the overall RSI trend shows upside momentum associated with the current price movement from the larger trading ranges within recovery. From a technical perspective, RSI moving over 50 and 60 often suggests an improvement in Bullish momentum, overall bearish volatility and selling pressure has subsided for now.

Comments last week The XJO has demonstrated a robust bullish trend, decisively breaking above the critical resistance level of 8083, as noted previously. This breakout, an expanded weekly range, underscores strong buyer control and sustained upward momentum. On the daily timeframe, the price action further reinforces this bullish narrative, with price bars exhibiting a fluid movement higher and crossing the 200-day moving average (MA), a widely watched long-term trend indicator. The 200-day MA, positioned slightly above 8083, provides additional confluence.

S&P 500 WEEKLY:  Bullish consolidation

The S&P also set a short-range week with the close below the 5670-resistance level, a further push higher could be expected following this current consolidation. Closing below a key resistance level like 5670 suggests that while a full breakout was not achieved, the market has remained resilient. Buyers held firm enough to prevent a steep decline, yet the inability to decisively breach 5670 indicates that a cautionary approach has persisted near these higher levels. During consolidation, prices typically oscillate within a defined range, allowing the market to reset before potentially launching into a new phase. This phase of calm often serves as a period of accumulation.

Indicator:  Relative strength 14.   

For bullish confirmation, a recovery back to the 50 level on the RSI shows momentum is stable. A directional move over this level would indicate renewed strength and the potential for a renewed upside shift in momentum.

The current RSI reading moving above 30 and sitting right at the 50 level offers a bullish view. A reverse and deeper move towards the 30 level would signal potential exhaustion among buyers, but without clear evidence of sellers stepping in, downside risks remain low.

Comments from last week

The S&P 500 weekly chart reflects a bullish trend as of the close last week, supported by strong price action, tech sector performance, and positive economic signals. The index is above key moving averages and significant level of 5670. Approaching resistance at 5853 price movements may see some early selling leading to consolidation around this level.

Volumes were average last week, not showing significant spikes that would confirm a climactic move. This supports a steady, controlled rally rather than an exhaustive one.

SPX DAILY   Price structure:  Breakaway Gaps

The Daily chart better defines the consolidation around the 5670-resistance level with the small Gap fill last Wednesday. It is also observed the current price consolidation remains below the 200-day average.  Once this balancing act resolves—especially with a convincing move above the 200-day average—it would serve as a catalyst for a more sustained upward push. The expectation of price moving back into the consolidation zone below the 6100 level and above the 5832 level remains.

Indicator: Relative strength 14. 

The Relative Strength Indicator (RSI) having moved below the key 30 level turning higher in line with price action two weeks ago has stabilised this week. Momentum has now turned towards a Bullish buy signal now complete with the sustained cross of the key 50 level. A continuing close above the 50 level is required to remain bullish. If the RSI falls further below the pivotal 50 level, it will likely confirm a further bearish outlook, leading to further downside targets.

Comments from last week:  The S&P 500 daily chart confirms a bullish trend, building on the second bullish pivot point from last week at 5500-5550. The index gapped higher on May 1st and 2nd, crossing 5670 driven by tech strength, economic optimism, and sustained buying post the pivot point low. Traders should watch key levels 5670 and 5700 and the 200-day simple moving average for breakout or a reversal signal showing from early profit taking, with risk management critical in this volatile environment.

NASDAQ (100) DAILY Price structure:  Consolidation.

While the Nasdaq’s current consolidation below the 200-day moving average indicates a pause in momentum, it also sets the stage for a potential rebound if the necessary bullish catalysts emerge. During consolidation the market builds the energy required for a sustained upward move, but traders should remain cautious and await further confirmation before committing to new positions. The key observation of last week price action is the closing of the Gap followed by the move back to the 200-day average. A price move back to this lower level would send a Bearish signal to traders.

Indicator: Relative strength 14: Bullish turn

The Relative Strength Index (RSI) has now turned sideways after breaking over the critical 50 level, which signals positive strength in momentum remains. Should the RSI continue to rise further towards the 70 level, it would serve as a strongly Bullish indicator, highlighting a significant move higher may be underway, market participants cannot afford to overlook this outcome.

Comments from last week.  The Nasdaq 100 weekly chart reflects a bullish trend as of the higher being set on the 21st April 2025, with the index at 20,102, recovering from April’s low and testing the 200-day moving average. The breakout above 19,180, supported by tech strength and current positive economic signals from the receding tariffs, suggests potential for further upside toward 20,500-21,000, though resistance at the 200-day average looms. The recovery from the April lows is not a Primary UP Trend and the Index may consolidate above the 20,900 level.

USD Spot GOLD – DAILY:  Price consolidating

Despite the looming resistance at $3500, the price is trading above the short-term trend line—a line drawn through recent support lows that reflects the immediate price trajectory. This trend line serves as dynamic support, suggesting that even though the rally has stalled near $3500, buyers are still present enough to prevent a sharp decline. If gold manages to accumulate sufficient buying momentum, particularly with confirming signals like a spike in activity or bullish candlestick formations in early trade this week, it could break above the $3500 resistance, signalling the start of a new upward trajectory. The underlying Primary trend remains UP.

Indicator:  Relative Strength 14:  Slowing momentum

The RSI has moved to cross the 70 level but remains lower and the previous high point set during the push to $3500. This is a signal of weakening internal momentum in this current look back period (14), however, it remains a short-term observation as price begins to consolidate. Further RSI declines in the coming week below the 50 level will reflect the potential for a strong divergence outright sell signal. Short term holders and traders should now monitor the RSI for a cross below the 50 level as a sell signal.

Comments from last week: Following the rejection high discussed last week, USD Gold has maintained its downward trajectory, extending losses into the close of the week. This sustained decline reflects growing selling pressure, with profit-taking and broader market contributing to the retracement. The first key technical support is now identified at $3167.5, a level that may serve as a potential stabilization point should buyers begin to re-enter the market. The price action around this support zone will be critical in determining whether the current pullback finds a floor or if further declines are likely to test the uptrend line in the near term.

AUD GOLD – DAILY: Reverse Pivot

The Australian dollar Gold price remains stable, and the USD Gold price moves higher offset by the stronger $AUD. Importantly the current price remains above the short-term trend line and closing towards the high following a bullish week. Australian Gold producers remain in a strong buy position with very active merger and acquisition activity underway.

Indicator:  Relative Strength 14: 

The Relative Strength Index (RSI) is showing a sharp downturn below the 70 level with a short recovery. Momentum is slowing, a further close below the 50 level would indicate momentum has turned bearish. 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.

Comments from last week. Gold in Australian dollar term has now set a reverse Pivot point with the close towards the $5000 level. Technical support is shown at $4691, with two influencing inputs of the USD Gold price and the movement in the $AUD, the AUD Gold price may further consolidate above the current UP trend lines. A closing price below the $5000.0 level may see some flow on selling in the Australian Gold producers.

SILVER Price structure:  trading range remains

Silver is not Gold. The $32.50 level remains a critical support with resistance level of $33.40 for the metal remaining in play. While silver often gets compared to gold, its technical behaviour—highlighted by the critical support at $32.50 and the resistance at $33.40—paints its own unique market picture. The current long term trading range suggests that the metal is awaiting a catalyst before taking a definitive direction. Whether silver will break out above $33.40 or fall below the support at $32.50 will be crucial in determining its next phase, and traders should closely monitor these levels when planning their positions.

Relative strength 14:

The relative strength index (RSI) has moved lower to align with the recent short-term reversal in price from the $33.40 level.  The current move lower has moved to the 50 level, but not decisively. This movement suggests a potential stabilization or recovery following the recent reversal.

Comments from last week. Silver continues to decline from the $33.40 level discussed last week. The FO low point has not acted as the swing point with further selling into the close of last week to retest the Thursday lows at $31.50. A breakdown from this level may see the $28.72 level targeted with first support at $31.50 the key level to hold this week. Silver remains highly tradeable within the current ranges; however, USD Silver is not in a Bull market.

AUSTRALIAN VOLATILITY INDEX:  The equities trader’s compass.

The current volatility closing value has closed above the key 13 level with an earlier 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 demand and subsequently higher priced PUT options to cover downside portfolio risk. With the indicator value moving higher from the low Mid-week, the forward pricing (Volatility) of PUT options (insurance) is increasing, this is observed with an advance 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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