XJO WEEKLY
Price structure: Consolidation remains

The Bullish “Pivot” setup discussed last week has failed to bring further buying to the market with a complete reversal seen in the price action last week. The Weekly price movement remains between resistance of the 7910 all-time high, and Support shown at 7632. No reversal of the Primary UP trend has occurred at this point however a close below the 7632 level would show a technical reversal of Trend. Last week’s inside range (IPd) shows the market “in balance”.

Indicator: Relative Strength 14 – Poor momentum

Relative strength has turned lower as part of the current consolidation. Only further movements towards the 70 level will remain a bullish signal for further price gains. However, during price consolidation the RSI naturally moves to the neutral 50 level.  Should the RSI reading move below the 50 level, the strong indication is for negative momentum to develop.

Comments last week: Although the Index remains within a wide consolidation zone, the market moved higher to close over the high point of the previous week and finally set a pivot point reversal following the prior week’s retest towards the 7632 level. This is a very Bullish setup, with a possible breakout above the 7910 level. The underlying primary trend remains UP.

XJO DAILY
Price structure:  Consolidation.

The shortened trading week started with an impulsive move lower with further consolidation in the form of short-range bars at the low of the (Tuesday) range. The internal Technical support level shown at 7700 has provided some mid-week support. The past week has remained mixed between weakening resource stock and strengthening financials. Until multiple sector strengths develops, the market may remain range-bound between 7580 and 7910, with 7700 being the key level to hold for the Index to remain Bullish.

Indicator: Relative Strength 14

The Relative Strength Indicator (14) has turned sideways into the close on Friday, the overall neutral momentum results from the smaller price movements that reflect in the Relative strength moving to a neutral reading (50). This is the level where traders would be looking for a further buy signal above the 50 level, but with the current readings at the “50” level now, the potential for a Bearish reversal remains a concern.

Comments from last week: Follow through from the Daily pivot point discussed last week shows minimal overlap on the daily trading ranges, with last Friday closing towards the high of the day. Traders would look for a breakout across the 7910 level to set a target of 8000 points. Several strong daily ranges in the past week indicate buyers controlling price movements. The 7910 level remains the first resistance target, this is the level at which sellers would be looking to take profit.

S&P 500 WEEKLY: Resistance breakaway

The S&P shows strong momentum, trending away from the recent consolidation at the 5270 level. The Index is currently being lifted by the overweight Tech stocks with falling market breadth (Bearish) behind this leading sector. The S&P remains at risk of a corrective move lower. The current breakout aligns with the Primary UP trend and targets 5500 points. A closing price below the short-term trendline will offer the first trend reversal signal.

Indicator: Relative Strength Indicator 14

Relative Strength has turned sideways to higher as the momentum indicator improves. With the reading moving over the 70 level, positive momentum remains strong. As discussed last week, the RSI is developing a bearish divergence signal with a movement setting a lower point on a higher market again last week. A further turn towards the key 50 levels, with any Index price consolidation towards the 4920-4818 level, may re-assert a further bearish RSI signal.

Comments from last week: The further breakout of the S&P500 over the 5270 level has again not been decisive, with a lower shadow testing towards the short Trendline while overlapping the previous week’s price range. This remains a bearish setup with the potential to close below the 5720 level as the first indication of trend failure. To remain Bullish, the price action should set a strong advance from this level towards the 5500 level to indicate that the user remains in control.

SPX DAILY
Price structure: Potential Bull trap.

The S&P500 has set another “GAP” in the chart. The potential for a “GAP” down in price, leaving an island top, remains. The current short-term trendline remains in place; a price move lower may see this line tested. Island Tops can be the precursor to a sharp reversal in price as the buyers at the high are left abandoned. No solid “sell” signal is showing, with the ultimate target of 5500 remaining in place.

Indicator: Relative Strength Indicator 14

The Relative Strength Indicator has moved over the 70 level, indicating an improvement in bullish momentum, and is currently turning lower (Friday) while above the 70 level. A continued move lower towards the “70 level would be a bearish signal with the expectation of further declines. Relative strength is a momentum indicator; a swing back below the key 50 level would be a Bearish signal that should not be ignored.

Comments from last week: The Daily price movement remains in consolidation at the Fake-Out point. The current closing highs remain unconvincing of further gains as the price movement remains extended above the 200-day moving average. The overall Primary trend remains UP. Traders should monitor the Index for a closing price below the 5300 level as the first reversal signal.

NASDAQ DAILY
Price structure: Momentum breakout

The driven Nasdaq, riding on a wave of “AI” expectation, driving earnings higher, “gapped” the Index higher last Wednesday with further follow-through. The current price levels remain “extended” from the 200-day moving average, similar to the February 2024 levels that saw some follow-on consolidation take place. The first signal of a Bearish reversal will be a close below the “GAP” level. The underlying Primary trend remains UP.

Indicator: Relative Strength 14

Last week saw the momentum indicator turn higher to sideways above the key 70 level. The RSI could now be monitored for a potential further movement lower below the 70 level, indicating the first slowing of bullish momentum move is underway. This may provide some early insight into the overall Primary trend reversal. Relative strength moving higher above the important 70 level shows Bullish momentum remains strong.
Comments from last week: Last Wednesday, the Nasdaq index gapped open to a new high above the previous OPd high. Both Thursday and Friday did not follow through, with only short-range days, discounting the view of a strong bullish outcome. Further consolidation may develop at this level. The underlying Primary trend remains UP. The short-term downside risk remains; should the recent price “Gap” be filled on a reversal bar, the result may develop into a selling event towards the 18,464 level.

USD Spot GOLD – DAILY: Bearish flag.

The strong range OPd discussed last week has resulted in a group of small range price bars remaining above the $2288.0 support level. It is clear a larger trading range is developing, as discussed since the all-time high of $2431.30 was set and not eclipsed. The “FO” fake out again saw strong selling lower the price back to the $2330 level,, where most of the recent price action had clung. A further breakdown below this important support level would see significant selling take place, with $2222.0 as the target level.

Indicator: Relative Strength 14

The RSI is turning higher but remains below the key 50 level. Relative strength is a momentum indicator and has turned negative at these levels, indicating that price momentum over the current 14-day lookback period is weakening. Long-term traders should monitor this Daily chart for a fifth major yearly top developing at this level, with further declines in the long term.

Comments from last week: Gold has remained within the Trading range between $2288.0 and resistance shown at $2431. Last Friday, $USD Gold again set a very strong “outside range” (OPd) to test the lower level of the range. Rice now risks following through lower to the $2222.0 support level. Three major high points are now evident, April, May, and now June show key reversal points in this consolidation, indicating a Major top is now in place. Immediate price support is required at this level before any further Bullish moves can be made.

AUD Spot GOLD – DAILY: Pennant.

$AUD Gold is a price factor coming from the $USD Gold price in $AUD terms. The pennant pattern continues developing, setting a bullish week above the late April low. This will remain a positive influence on Australian Gold mining companies. A further rise in the USD price of Gold or a decline in the AUD is required to hold the current value of Gold in AUD terms.

Comments from last week: The decline in the $AUD value of Gold has been offset by the decline in the $AUD to $0.6582c. The $AUD Gold price is now consolidating into a Pennant pattern above $3,450. A further rise in the USD price of Gold or a decline in the AUD is required to hold the current value of Gold in AUD terms.

SILVER Price structure: Valid Trendline in place

The Silver chart has developed a 3-point Trendline as the price finds buyers at the $28.80 support level. This confluence of support must continue to find buyers over the $30.0 level to remain bullish. A further decline below this important level targets the $26.20 level. The Primary (Weekly) trend remains UP.

Relative Strength 14:

Currently, Relative Strength is turning lower from the 50 level, indicating a “Sell Divergence” is now playing out into a full sell signal. Only a continued move higher and over the 50 level would reflect a solid change in the underlying price momentum as the Primary UP trend rolls over to enter a Down Trend.

Comments from last week: Last week, the Bearish Divergence was identified as the highest risk to the underlying price of Silver. That divergence has now played out, with the price of Silver moving below a significant support level of $30.0. The next support level is shown at $28.80. This will be the key level to hold this week.

AUSTRALIAN VOLATILITY INDEX: The equities traders compass.

The current volatility closing value has moved to close below the 11 value again, following a further move below this key 11 level. The closing value indicates the XVI remains within the “Complacent Level 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 months (insurance) Put Options were decreasing, suggesting the market is moving towards a bullish outlook.

The XVI should remain subdued below the “13” level for continued support of equities.

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 and 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.