XJO WEEKLY
Price structure: Spinning top

The Weekly chart of the XJO displays the Spinning Top candle showing indecision. This suggests a potential pause or reversal in the market’s current trend, indicating that traders are uncertain about the next direction. The spinning top is a clear signal of equilibrium between the buyers and sellers, reflecting the market’s hesitation to commit firmly to either direction. It remains positive with the current closing price remaining above the 8514 level, with 8385 and interim support for the week ahead. Should the Weekly value close below this level the potential remains for a move towards 8083 points.

Indicator: Relative Strength 14:  Remains Bullish

Relative strength has turned sideways in line with the rejection of lower prices and remains above the key 50 level indicating overall Bullish momentum. Only further movements higher towards the upper 70 level can set a continuing bullish signal for further higher price movements.
Should the RSI turn further lower to move below the 50 level, the strong indication is for negative momentum to develop leading to Trend failure and further declines.

Comments last week: The mid-week decline to retest the 8385 level was quickly rejected, leading to a strong recovery. This resulted in the index closing at the higher end of the range, and specifically at the current resistance level of 8515 points.

Buyers remain in control of this 12 Month Primary UP Trend largely driven by gains in the financial sector and strong gains within some leading Industrials. Eg WES, CSL, and BSL

XJO DAILY
Price structure: Late rejection.

The Daily chart indicates the market has again rejected higher prices to close below the 8567 level setting up the potential for a close below the 8514 breakout level. The Daily chart shows a consolidation zone of values between 8385 as support and 8514 as resistance. The current price movement may move back into this trading range. High volumes on the rejection further indicate larger holdings are being liquidated into retail portfolios.

Indicator: Relative Strength 14: Neutral

The Relative strength Indicator (14) has remained sideways into the close last Friday, but has also remained above the important 50 level, the overall RSI trend shows slowing momentum associated with the current larger trading range. Should a move occur lower too or below the 50 level, Traders would be looking for further Sell signals should a continued lower price move occur with the RSI closing below the “30” level targeting 20.

Comments from last week: The Daily chart highlights the growing trading range with 8514 being set as resistance and 8083 indicating longer term support. The Index has set a reversal and new higher low at the internal support level of 8385. A further breakout higher would be a significant development as support for the top Stocks in the XJO 200 continue to gain support. Both ANZ and WBC are yet to trade a new all-time high enjoyed by their peers. The current weakness in the $AUD should continue to underpin the resources sector. Of note is the declining volumes last week often associated with larger investors moving to the sidelines.

S&P 500 WEEKLY: Continuing resistance 

As described in this note for the past 4 weeks, the 6100 point level is setting significant resistance, each effort has faced robust rejection with last week offering the 6th attempt to breakout. The enduring resistance at this level underscores the market’s hesitation, reflecting caution among traders and investors. Despite the persistent push against this barrier, the market appears to be consolidating within a tight range. The resilience of the 6100 level suggests that any future breakout, should it occur, may trigger substantial buying interest and drive the index to further new highs.

Indicator: Relative Strength Indicator 14.  Divergence failure

The Bearish Divergence remains in the Relative Strength Index (RSI) has failed to indicate a reversal in the current Trend.
The current movement higher, shows improving upward price momentum, only a further move towards the 70 level will confirm the bullish signal.

If the RSI crosses below the key threshold of 50, it may confirm a bearish outlook.

Comments from last week: As described last week the 6100-point level continues to provide resistance, with the current 12 month upward trading channel remaining intact, indicating buyers remain supportive. This resistance level may serve at providing a critical threshold for future price advances, however a successful breakout above this level potentially triggering substantial buying interest and driving the Index to new highs within the very strong upward price channel remains the preferred view.

SPX DAILY Price Structure: Resistance

While the S&P 500’s struggle with the 6100 point level underscores the market’s current resistance, the possibility of a bullish breakout remains plausible. Traders are closely monitoring this level, as its breach could ignite substantial buying interest and propel the index to new heights, confirming a strong bullish market sentiment from the still persistent Primary UP trend. However, the caution observed in the market suggests that any breakout will not be without its challenges.

The failure of the key reversal Outside Period, highlighted in last week’s commentary, adds complexity to the current market dynamics. This setup often indicates potential trend reversals, yet the market’s resilience at the 6100 point level suggests that buyers are still present, providing support for future upward movements.

Indicator: Relative strength 14. 

The Relative Strength Indicator (RSI) continues to move over the key 50 level, suggesting that with the consolidating prices, momentum remains neutral. If the RSI falls below the pivotal 50 level, it will likely confirm a bearish outlook, leading to further downside targets and a potential retest of the 5800 level.

Comments from last week:  An almost identical 5 days of price action to the previous week. Both the Dark Cloud and the Outside period down close (Opd) are reversal signals when viewed in both the Weekly time frame and this Daily view. The 6100 level has now been tested on 4 occasions with immediate rejection. It should be noted the rejection at this level has failed to follow through lower, other than to build a strong support level along the 5800 level. The underlying Primary UP trend remains in both the Weekly and Daily time frames.

NASDAQ (100) DAILY Price structure: 

Failure of the Outside period discussed last week is an important development with the current price consolidation area extending back to December 2024. This suggests that despite several attempts to break down through the 21,340-point support level, the market has remained confined within a relatively narrow range of buyer support. The chart has been redrawn to show the developing Support level at 20,900. During the past 3 months of consolidation, it is important to note the Primary Trend remains UP.

Indicator: Relative Strength 14: Bearish turn

Relative strength has now turned higher while moving above the 50 level, indicating strengthening momentum as price also moves higher. The 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 towards the 50 level would send a very Bearish signal not to be ignored.

Comments from last week: The outside period set last Friday was a notable event, as it marks an immediate and significant shift in market sentiment. An outside period, which occurs when the high and low of the current period exceed the high and low of the previous period, often signals a potential reversal of the current short-term trend. The Tech heavy Nasdaq 100 remains in a consolidation phase as market participants assess the importance of current AI developments in China and the potential impact on the US tech industry. With the current 200 day moving average still rising a retest of this moving average would not be out of the question at 20,000 points suggesting a 5% decline from current levels.

USD Spot GOLD – DAILY:  Key Reversal

Following a stellar advance in USD Gold, the rejection bar high price set at $2943.0 was not exceeded in the following 3 sessions with last Friday setting an outside reversal period as traders move to protect profits. Should price follow through lower on a close below last Friday’s $2876.0 low traders could expect a retest of the short trendline towards the $2840.0 level. A further retracement may find strong support at the breakout level of $2790.0. In the coming days a closing price over the Old high may begin to set up a sell divergence signal within the RSI.

Indicator: Relative Strength 14: Swing lower.

The RSI has turned lower to finish below the 70 level. This is a bearish signal, and it remains a strong observation price has lost its 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 divergence Sell signal.

Comments from last week: USD Spot Gold has developed an exponential price advance following the breakout above the $2790 level. This upward momentum is reflective of significant bullish sentiment in the market, driven by strong investor demand and positive market dynamics. The finish last Friday prior to trading at an all-time high price and above the key $2800 level further underscores the prevailing strength. While the bullish outlook remains firm, traders should be cautious of potential pullbacks towards the $2790 breakout level following the Fake out range (FO) set last Friday. Typically, prices may retrace to retest significant breakout points, but a close below this level could indicate a shift in the current bullish momentum.

AUD GOLD – DAILY: Rejection.

With the advance in the AUD and corresponding decline in the USD Gold price, the AUD price of Gold has set a rejection bar on this Weekly chart closing towards the $4,500 level.

Local producers may begin to see some selling pressure in the short term. The $4256.0 level is the current key support for price to hold on any further decline this week.

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 likely to 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 favor of continued gains.

The strong price trend in this chart is based on the weakening Australian Dollar and further advances in the $USD Gold price. As the Australian dollar consolidates around A$0.62 cents the current advance over the $4,500 level is being driven by the USD Gold price. This current price trend remains on target to reach $5,000 oz. Australian Gold producers will benefit in rising cash flow and remain a Buy for diversified  portfolios.

SILVER Price structure: Key levels remain in play

Last Friday saw a very strong price move above the $32.50 resistance level, only to be rejected during the final session with the close back inside the $32.50 resistance level. These types of Fake out (FO) movements can follow through to further selling. In this case the next Support level remains at $31.50. Although Silver remains highly tradeable within the current price ranges the large underlying price structure is one of consolidation between $28.50 and $32.50. This is not Bull market price activity.

Relative Strength 14:

Relative strength is now moving in line with the underlying reversal price structure. The current reading has moved above the key 50 level, showing Bullish momentum, but declining from the high 60’s momentum point.  This indicator should be monitored for a Sell divergence signal, completed with a continuing closing price below the $31.50 level.

Comments from last week: Silver is not in a price Bull market but remains within a large consolidation zone and currently respecting the $32.50 resistance level originally set in May 2024. The October 2024 breakout towards $35.0 remains a false break and has left buyers of that period in a losing position. With last Friday’s Fake out (FO) range closing towards the opening price of the week, profit taking at this level remains a constant for traders. Buyers should remain vigilant for a breakout above $32.50 as a potential retest of the $35.0 level where more selling may take place.

AUSTRALIAN VOLATILITY INDEX:  The equities trader’s compass.

The current volatility closing value has closed below the key 11 level following a large spike higher during the week.  Current closing value indicates the XVI volatility level is within the Complacement level for Equities as the market volatility begins to see mid week higher priced PUT option insurance to cover portfolio risk. 

With the indicator value moving higher Mid-week, the forward pricing (Volatility) of PUT options (insurance) was increasing, however this is observed against an overall Bullish advance in the market. Volatility now rules in this current XJO200 consolidation 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 correlation to the underlying market movements.