XJO WEEKLY
Price structure: Consolidation

Last week saw rejection below the 7910 level with a low close in the range. In the coming week,, the 7910 level will be the key observation for traders to gauge market strength. The underlying primary trend remains UP. Good technical support remains at 7632. This will be the level to monitor for a bearish break to the downside should selling continue in the top heavily weighted banks and resource stocks.

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 increased while above the 50 level, in line with the 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: Last week, a higher low and higher high 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 the impulsive range of 4 weeks ago.

XJO DAILY
Price structure: Retest of resistance

The daily close over the 7800 level remains the technical level to hold on to this week. Given the strong move higher last Thursday, a breakout to the high side looks like the better probability, with Friday selling down to the 7800 level. Although the Index remains within a developing consolidation zone, the important observation is that the current retest of the March 24 high of 7910 remains in place with the potential to break out higher.

Indicator: Relative Strength 14

The Relative Strength Indicator (14) turned lower into Friday’s close. The overall decline in momentum is a result of the larger price consolidation 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: 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 points at the April 10th   high point. Several important levels are developing in the Index, a breakout higher will target the 8000 point level.

S&P 500 WEEKLY: Resistance breakout

The Weekly range is short compared to recent high-low ranges; however, the Index value has made a new all-time closing high, reaffirming the Primary UP trend. The 5270 level should now provide immediate support on any decline in the index value.

Indicator: Relative Strength Indicator 14

Relative Strength has turned higher as the momentum indicator remains below the 70 level but above the important 50 level. In the coming week, traders would monitor the RSI for a bearish divergence 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:  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 and be a 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.

SPX DAILY
Price structure: 2nd Gap open Sell.

The S&P500 has set a second “Gap open.” These types of movements, where the Buyers open the market, can indicate a short-term euphoric top developing and should be monitored for a closing value below the “Gap” area to confirm. The two small range bars set last Thursday and Friday are a bullish flag pattern developing; a breakout high could be expected.

Indicator: Relative Strength Indicator 14

Relative Strength Indicator had moved above the 50 level indicating bullish momentum, and is currently tracking sideways below the 70 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 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 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 recent Buyers have moved to take profit.

NASDAQ DAILY
Price structure: Breakout back retest

The Nasdaq set a new breakout above the 18,464 level as part of the overall Primary UP trend. The lower close on Friday is the retest of this level, which must hold for Buyers to remain in control. Should this small resistance/support level not hold in the coming days, the 2nd Gap open sell signal will be the area to hold. Overall, this is a very positive move by the index to set higher highs this week.

Indicator: Relative Strength 14

Last week saw the momentum indicator turning higher to sideways below the key 70 level. The RSI could now be monitored for a further movement higher over the 70 level indicating a stronger bullish momentum move is underway, this may provide some early insight to overall Primary trend continuation. Failure of the Relative strength with another move below this important 50 level shows momentum to the downside.

Comments from last week: As with the S&P500 the Nasdaq has also set a “Gap open Sell” signal, the past week is 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 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.

USD Spot GOLD – DAILY: All time high retest.

Gold staged a directional move during the past week but remains below the $2431.3 spike high point (SH). Gold looks set to make a new all-time momentum high. The $2431.3 level will remain an area where profit takes place putting the buyers under pressure. The overall Primary UP trend remains in place. 

Indicator: Relative Strength 14

The RSI is turning higher from the key 50 level.  The Relative Strength is a momentum indicator and remains strong at these levels, indicating price momentum over the current 14-day look-back period is gaining strength.   Long term traders should monitor this Daily chart for a 5th major yearly top developing at this $2430.0 level with further declines in the long term.

Comments from last week:  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.  

AUD Spot Gold Daily: Bullish Pivot Reversal.

The $AUD Gold price has improved on gains in the $USD Gold price, even though the small rally in the $AUD from $0.66 to $0.67 has discounted part of the current rally. Overall the AUD Gold price has set a bullish pivot point with a potential retest of the highs around $3750 remaining in place.

Comments from last week: 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.

SILVER Price structure: Momentum breakout

Two weeks ago,, the rejection of the May 21 level of $28.80 was a bearish move. However, the Primary UP trend has reasserted itself with a significant breakout higher, with an Impulsive range being set, showing the buyer in full control. Impulsive moves in the past have led to some consolidation in the following days. A retest back towards the $30.03 level would signal that the sellers are moving the price.

Relative Strength 14:

Current Relative Strength has turned higher from above the 50 level, indicating upward momentum has slowed, a further close of the RSI over the 70 level add to the current momentum in place. Only a continued move higher and over the 70 level would reflect a solid change in the underlying price momentum as the current Primary UP trend becomes an extended move.

Comments from last week: 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 remains at $30.03. Importantly the underlying Primary trend remains UP.

AUSTRALIAN VOLATILITY INDEX:  The equities traders compass.

The current volatility closing value has moved above the 11 level again following a move lower below the 11 level. The 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 months (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.