XJO WEEKLY
Price structure: Consolidation

Last week a higher low and higher high has moved off the 7632 all-time high-level set in August 2021. The index has now remained at or around this level for the past 20 weeks. The rising wedge pattern broke to the low side with the impulsive move, the current rally can only be described as a retest of the 7586-level underway.  The Primary trend remains UP with the Index entering into a consolidating range movement as current price action remains inside of the impulsive range of 4 weeks ago.

Indicator: Relative Strength 14: Bullish signal

Relative strength has turned sideways to higher as part of the directional move. Only further movements towards the 70 level will remain a bullish signal for further price gains. Last week the RSI value moved higher while above the 50 level in line with current price move. However, a new indicator high value is required over the late Q4-2023 high point to set a bullish tone.  Should the RSI reading move below the 50 level, the strong indication is for the current low to negligent momentum to continue.

Comments last week: Sellers continue to maintain strength over the price action with last week’s “short range” higher close bar. The 7632 level is now providing resistance following the impulsive down move 3 weeks ago. The Index is now developing a trading range between the spike lows at 7500 points and resistance at 7900 points. The Primary trend remains UP with the Index entering into a consolidating range movement as current price action remains inside of the impulsive range of 3 weeks ago.

XJO DAILY
Price structure: Pennant retest

The Daily Chart again shows a reversal pivot point set last Thursday as a retest of the 7700 level, followed by a small “inside range” to close the week. To remain bullish, the 7700 level could hold as support in the coming week. Traders should look for a close over 7870, the April 10th high point. Several important levels are developing in the Index; a breakout higher will target the 8000-point level.

Indicator: Relative Strength 14

The Relative Strength Indicator (14) turned higher into the close on Friday. The overall decline in momentum is a result of the larger price decline developing. This is the level where traders would be looking for a further sell signal below the 50 level, but with the current readings above the “50” level now potentially heading to the “70” level, early sellers would look for a divergence sell signal.

Comments from last week: In the Daily time frame, internal support is developing at 7580, this will be the short-term level to hold in the coming week. The consolidation, now developing into a continuation pennant, can break lower to retest the 7472 support level. With strength in the Financials last week providing support, a follow-through higher can only be achieved with a broad-based rally across all sectors, in particular the materials sector, which holds BHP and RIO.

S&P 500 WEEKLY: Key Support in Play

The “Hammer bar” of 2 weeks ago remains the key observation as the Index moves higher over 5200 points. While expecting a bearish week last week, the current price gain reaffirms the underlying primary UP trend; this will be further confirmed should the price move over the high of 6 weeks prior, which would be a very bullish outcome for further gains. As the index is within a consolidation range, a break lower would show a major top in place. The new “trendline line” is now “tentative” until a third touch point is made or it is broken; the index remains in a consolidation phase.

Indicator: Relative Strength Indicator 14

Relative strength has risen as the momentum indicator remains below the 70 level but above the important 50 level. In the coming week, traders will monitor the RSI for a bearish signal with a movement lower towards the key 50 level, as any index price consolidation towards the 4920–4818 level may re-assert a bearish RSI signal with the indicator turning lower towards the 50 level and towards the 30 level.

Comments from last week: Last week, the index posted a lower shadow range with a high close. Should the index confirm a close below the 5000-point level this week, this is regarded as bearish. Also noted is that the current price movements remain within the strong range of three weeks ago. Key support remains at 4920. A close below this level will show a lower high being set and offer the potential for a further decline.

SPX DAILY
Price structure: Gap open, Sell.

The Daily “bearish flag” has failed with a breakout to the upside. Last Friday, the index posted a “Gap open sell” signal; the observation following this “Doji” type bar is that buyers are unwilling to take the index higher, indicating a loss of broad-based buying support. Should a decline take place, an immediate “gap” down will take place as an indication that recent buyers have moved to take profit.

Indicator: Relative Strength Indicator 14

Relative Strength Indicator has moved above the 50 level, indicating bullish momentum, and is currently tracking sideways above the 50 level. A continued close over the “50 level would be a bullish signal with the expectation of further gains. Relative strength is a momentum indicator; a swing back below the key 50 level would be a Bearish signal.

Comments from last week: The “Pivot reversal” discussed last week has failed to follow through, with further mixed price movements showing last week, the structure is developing into a bearish flag pattern. Short-range bars indicate neither the buyers nor sellers have price control. To remain bullish, a close over the recent 5264 high point is required; until then, the index is considered to be retesting the highs.

NASDAQ DAILY
Price structure: Gap open sell

As with the S&P500, the Nasdaq has also set a “Gap open Sell” signal. The past week has been highlighted by the daily consolidation above the 18,000-point level. As the index remains in the prior 3-month consolidation area, a move down may be sharp, and traders may move to protect profits. No Primary Trend is in place as the current price moves sideways within a range above 16,996 and a resistance of 18,464.

Indicator: Relative Strength 14

Last week saw a sharp momentum reversal, with the momentum indicator now turning higher over the key 50 level. The RSI could now be monitored for further movement higher above the 50 level, indicating a stronger bullish momentum move is underway. This may provide some early insight into overall Primary trend continuation. Failure of Relative strength with another move below this important 50 level shows momentum to the downside.

Comments from last week: The Nasdaq moved back into the distribution-consolidation area above the 17,790 level on last Friday’s Gap up move.  With the close over the 17,790 level, the potential remains for a further retest towards the 18,464 high level. This is currently not a Bullish breakout higher but remains a retest of the highs underway. Close inspection of the Daily bars shows the expanded ranges occur on down-close bars, indicating selling pressure. A breakout over the 18,464 high with an expanded range would offer a very Bullish signal, until then, caution would be used in this consolidation.

USD Spot GOLD – DAILY: Consolidation developing

Gold price movements have respected the short-term underlying trendline,, offering a further Bullish view as a retest of the high at $2431.3 takes place within this longer-term Primary UP Trend. This week,, a break below the trendline would show a lower high being set and have the potential to retest the 2222.0 level. The potential for a significant trading range to develop remains as current price movements remain in this $2280.0 support and $2431.3 resistance area.

Indicator: Relative Strength 14

The RSI is turning lower from above the key 70 levels set in late March with the price reversal. Currently, bear flag development has the indicator moving sideways above the important 50 level. A Negative momentum signal will occur should the RSI move below the 50 level. Long-term traders should monitor this Daily chart for a fifth major yearly top developing at this $2400.0 level, with further declines in the long term.

Comments from last week:  The bearish flag discussed last week has followed through to set lower prices; a retest of the $2222.0 level remains a strong possible outcome.  The developing a,b,c pattern (bullish) requires the “c” leg to extend lower to confirm the setup; the potential retest of $2222.0 would satisfy that requirement. The underlying Primary trend remains UP. Consolidation is an important development within trends. However, statistics show that after 9 weeks of advances in gold, the PM often declines into long periods of consolidation. The February – March period is also a seasonal window for Gold buying in the sub-continent.

AUD Spot GOLD Daily: Bullish Reversal.

The upward movement in the $USD Gold price and the small decline in the $AUD have lifted the $AUD Gold price, offering a bullish view for local producers. The AUD Gold price remains within a strong Primary UP trend, with the potential for further gains should the underlying $USD Gold price continue to appreciate in value.

Comments from last week: The continuing decline in the USD price of Gold coupled with the small appreciation in the $AUD has the $AUD Gold price declining to $3476.58 at the close to show continuation from the Pivot point reversal. Sentiment within the Gold sector stocks with production underway may soften and see continuing profit-taking following the recent strong rally.

SILVER
Price structure: Resistance rejection

Currently, the price structure of silver remains at some important historical levels. The rejection of the May 21’ level of $28.80 is a bearish move into the weekly close last Friday. The strong potential is for Silver to develop a trading range between support of $26.20 and resistance of $28.80. This week, should silver move above the $28.80 level, the historical resistance from February will remain at $30.03. Importantly, the underlying Primary trend remains UP.

Relative Strength 14:

Current relative strength has turned lower from above the 50 level, indicating upward momentum has slowed, should the RSI continue lower from this point too break below the key 50 level further downward momentum would be expected. Only a continued move higher and over the 50 level would reflect a solid change in the underlying price momentum and should alert to a potential resumption of the Primary Trend.

Comments from last week: The Bearish flag discussed last week has followed through with lower prices, the current 3 day consolidation at the $26.20 Support / Resistance level can move lower to retest the $24.60 level in this overall corrective move lower. To regain a bullish view Silver would have to trade back to the $27.0 – $27.50 level. The Daily trend is down, with the longer-term Weekly trend remaining in a well-defined Bullish UP trend.

AUSTRALIAN VOLATILITY INDEX:  The equities traders compass.

The current volatility closing value has moved above the 11 level following a move lower below the 11 level. This closing value indicates that the XVI remains within the “Bullish for Equities” level. 

With the indicator moving lower early in the week, the forward pricing (Volatility) of PUT options (insurance) was decreasing, this is observed against a flat market, indicating market participants believe equity price movements may turn neutral, as the cost of 3 month (insurance) Put Options were decreasing, suggesting the market is moving towards a bullish outlook.

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 correlation to the underlying market.