XJO WEEKLY    

Price structure: 5 Wave pattern.

The 5 wave pattern discussed last week has played out below the 7910 level. The current price move is considered CORRECTIVE and not a trend change. The current move has closed in the congestion range above 7632 and now 7910 as resistance. With the Index now close to the 7632 level indicating all gains from August 2021 have now been erased. Potentially a place for value buyer to step in. A close above the 7910 level would indicate a reversal signal.

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, should a price reversal occur the RIS will turn higher. 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 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.

XJO DAILY  

Price structure:  3 Bar Triangle.

As last week closed, bot Thursday and Friday have settled within the range set last Wednesday, this constitutes a 3 bar pattern and highly indicative of a reversal early this week. The strong directional move from the 8567 high is significant. A potential rally from this level is possible carrying with it the risk of being sold into. High volume in the Low indicates exhaustion.

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 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.

S&P 500 WEEKLY:  Hammer bar

With the Gap open lower last week the Index has recovered to close near the high of the range, a very bullish signal. Recovery may take a further week, a strong indication of reversal will show with a close above 5670 points. Traders should look for a limited move higher into the 6000 point range.

Indicator:  Relative strength 14.   Declining momentum.

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. This week look for a turn higher towards the 50 level.

Comments from last week.:  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.

SPX DAILY  Price structure:  Pivot point reversal

Last week the S&P Daily chart shows a 4 day consolidation with last Friday setting a Bullish Pivot Point reversal following the FO Fake out low testing the 5500 point level. The immediate rejection to set the Pivot Point shows a short cover rally may be underway. First level of resistance is the 5670 level with major resistance expected at the 5832 level. Should current volatility see the Index move lower the Fake out low point at 5004 points should be used as a Stop level.

Indicator: Relative strength 14. 

The Relative Strength Indicator (RSI) has moved below the key 30 level and moving sideways, suggests that with the consolidating prices, momentum has now turned neutral. If the RSI falls further below the pivotal 30 level, it will likely confirm a further bearish outlook, leading to further downside targets and a potential retest of the 5400 level.

Comments from last week:  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.

NASDAQ (100) DAILY Price structure:  Potential reversal again.

Last week the analysis centred around the potential reversal bar, without a close above 20,236 level taking place. The Index has again set a reversal pattern with the Pivot point bar closing over the high of last Thursday high.  With a follow through price may retest the 20,236 level at the 200 day SMA.

Indicator: Relative strength 14: Bullish turn

Relative strength has now turned higher and moving above the 30 level. A closing price divergence signal has developed and may lead to a short price rally to retest the 200 day SMA.  A further move lower below the 30 level would send a very Bearish signal not to be ignored.

Comments from last week.  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.

USD Spot GOLD – DAILY:  Bullish

USD Gold has made a significant move above the USD$ 3,000 level to find immediate selling. The impulsive movement last Thursday has failed to follow through with Fridays close equal to the open. Gold may set a consolidation pattern above the $2956.0 level prior to a further movement higher.

Indicator:  Relative Strength 14:  Swing higher.

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

Comments from last week: 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 $2956.0 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.

AUD GOLD – DAILY: Bullish Continuation

Gold in Australian dollar terms has remained very bullish last week to close over the key $4700 level at $4725. As the USD price has risen with the $AUD remaining steady around the $0.63 cents level, Gold in Australian dollar terms has remained very bullish. Local producers EVN, DEG, GOR and NST will benefit from the appreciation in the Gold price.

Gold explorers may not find the same interest without a significant discovery.

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.

Comments from last week. 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.

SILVER Price structure:  Breakout

Last week the discussion centred around the $32.50 level as an area of resistance. The OPu range set last Tuesday closed over this level leading to  a breakout above $33.40. The original price target of $36.30 remains intact in the Primary UP trend. Expect some resistance at the October 2024 high of $35.00.

The $33.40 level is now a key support level to hold in the coming days.

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 $33.40 level.

Comments from last week. 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…

AUSTRALIAN VOLATILITY INDEX:  The equities trader’s compass.

The current volatility closing value has closed above the key 13 level following a further spike higher 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 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. A reversal of the XVI is a bullish signal.

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.

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 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.

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.