XJO WEEKLY    

Price structure: Inside range

The Index has established a defined trading range after rebounding sharply from the 7200-point lows. This inside range suggests a period of consolidation, where market participants are assessing the strength of the recovery and determining the next direction. Investors may be closely watching for a breakout higher from this range, which could indicate a continuation of the upward momentum. A potential pullback from this point suggests traders are taking profits and reassessing broader economic conditions. Market sentiment, remains jittery, and technical signals of key support and resistance will likely play a role in shaping the next phase of movement. Key support is 7632 to hold this shortened trading week.

Indicator: Relative strength 14: Declining upward momentum.

Relative strength has turned higher in line with the higher movement in the Index and has remained below the key 50 level for 7 weeks. Only further movements higher towards the 50 and 70 level can set a continuing bullish signal for 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 Up Trend failure and further declines.

Comments last week:-  The Index has demonstrated a solid recovery, marked by a robust candle formation that has successfully closed above the significant August 2021 high of 7,632 points. This achievement signals a noteworthy rebound from the retest low towards 7120, this could indicate renewed upward momentum in this volatile market. Breaking through this key resistance level not only highlights the strength of the recovery but also underscores the potential for continued bullish sentiment among investors.

XJO DAILY  

Price structure:  Recovery

The daily price action has steadily advanced toward the critical 7910-resistance level, reflecting strong upward momentum in recent sessions. By closing at the high in late trading last Friday, the market demonstrated sustained buying interest, with traders pushing prices higher as confidence remained intact. This close near the day’s peak suggests bullish sentiment and a potential test of the resistance level in the near term. However, market participants will be watching closely for any signs of rejection at the 7910 level, a breakthrough could set the stage for the next major movement higher in price action. External economic factors, investor sentiment, and trading volume currently remaining subdued will all play a key role in determining whether this level holds and leads to further gains.

Indicator:  Relative strength 14:  Neutral

The Relative strength Indicator (14) remains just below the important 50 level after the initial fall below the 30 level, the overall RSI trend shows upside momentum associated with the current price movement from the small trading ranges within recovery. From a technical perspective, RSI moving over 50 often suggests an improvement in Bullish momentum, but in the context of overall bearish volatility, it can also indicate that selling pressure has subsided for now.

Comments last week The a-b-c pattern has been a central theme in recent discussions, this has now reached its full resolution, as the Index extended its movement, testing the 7,200 level. This development marks the culmination of the anticipated corrective phase, reinforcing the structured nature of the pattern. With this test complete, attention now shifts to whether the market stabilizes at this threshold or signals the next directional move. The Daily closing over 7632-point level is a strong bullish signal with continuation higher expected. The current volume study has trading volumes below the 1B level, this is not strong volume showing a lack of interest from sidelined investors, momentum may slow or weaken with a grind higher.

S&P 500 WEEKLY:  Consolidation

The resistance at the significant Haguro level of 5382 is emerging as a pivotal point in the market, drawing attention as price action encounters resistance in breaking through. This level’s importance indicates heightened trader activity and decision-making around these price points. As the market approaches this resistance, there are signs that consolidation may now be underway, a period of indecision and stabilization. The consolidation phase around these levels will serve as a precursor to either a breakout above the resistance the preferred outcome, or a retracement, depending on market sentiment and external factors around the current Tariff announcements influencing current trading.

Indicator:  Relative strength 14.   

The recent movement lower is highlighting fading price momentum within the consolidation zone, suggesting that bullish strength remains absent for now.

For bullish confirmation, a recovery back toward the 50 level on the RSI is necessary. This would indicate renewed strength and the potential for an upside shift in momentum.

The current RSI reading moving above 30 without a cross of the 50 level further reinforces bearish pressure, confirming a continued loss of momentum.

A deeper move into oversold territory could signal potential exhaustion among sellers, but without clear evidence of buyers stepping in, downside risks remain elevated.

Comments from last week.:  With a solid test at the 5120 level followed by the retest of the Trendline at 4835 points.

The Haguro method considers the Midpoint of a large range bar as support or resistance. Currently the S&P has closed at the 5382 mid point of the range from 2 weeks ago.  With current market volatility longer term traders should look for a further close higher to confirm the current price recovery. The price action last week, a result from a significant short cover rally may result in further consolidation below the 5,500 level.

SPX DAILY   Price structure:  Daily consolidation

With multiple inside days forming, the Index continues to consolidate just below the key 5504 level. This sustained consolidation suggests a period of market indecision, where traders are absorbing recent price movements and preparing for the next significant shift. The current consolidation remains confined within the impulsive pivot bar range, reinforcing the idea that price action is stabilizing before a potential breakout or retracement. Market participants will be closely monitoring price around this zone, as a decisive move beyond this range could set the stage for the next trend direction. Currently the underlying Primary Trend is down.

Indicator: Relative strength 14. 

The Relative Strength Indicator (RSI) having moved below the key 30 level turning higher in line with price action last week, momentum has now turned towards a Bullish reversal although not complete until a cross of the key 50 level. A close above the 50 level is required to remain bullish. If the RSI falls further below the pivotal 30 level, it will likely confirm a further bearish outlook, leading to further downside targets.

Comments from last week:  April 2024 support level at 4953 has again provided support for a reversal pattern from the recent sharp decline. The large range Pivot reversal, the result from a strong short cover event has not followed through higher from the 5504-resistance level. Further consolidation could be expected at this Gap level prior to a move higher.

Overall momentum observed by the RSI continues to decline.

NASDAQ (100) DAILY Price structure:  Consolidation.

The Nasdaq’s price action continues to closely mirror movements across the broader major indices, reflecting similar trends and investor sentiment. In the Nasdaq, the key resistance level remains firmly positioned at 19,180 points, acting as a crucial barrier to further upward momentum. The 18,464 level remains as support with 19,180 level set as resistance.

Indicator: Relative strength 14: Bearish turn

The Relative Strength Index (RSI) has now shifted downward, breaking towards the critical 30 level, which signals decreasing strength in momentum. Should the RSI continue to fall further towards the 30 level, it would serve as a strongly Bearish indicator, highlighting a significant warning of potential further downside that market participants cannot afford to overlook.

Comments from last week.  This week, traders will keep a sharp focus on the 19,180 resistance level, as it marks a pivotal point in market activity. The notable and robust range established last Wednesday has not demonstrated continued momentum to the upside as the trading week drew to a close. Instead, the final sessions of the week have been characterized by the formation of two inside range bars, signalling indecision and hinting at the potential for a consolidation phase to develop. Should the Index advance from this current close over the 19,180 level considerable resistance remains at the 200 day moving average now rolling over lower.

USD Spot GOLD – DAILY:  New Momentum high

Gold continues to build strong upward momentum, pushing to fresh highs as bullish sentiment drives price action. The most recent breakout from the small pennant formation signals continued strength, with technical indicators pointing to further price gains ahead. This breakout suggests renewed buying pressure and confidence among traders, reinforcing the potential for a sustained move higher. The $3167.50 support level remains as a key level to be observed on any price decline.

Indicator:  Relative Strength 14: 

The RSI has moved to cross the 70 level but remains lower than the previous high point. This is a signal of weakening internal momentum in this current look back period (14), however, it remains a short-term observation price remains in strong upward momentum. Further RSI declines in the coming week below the 70 level will reflect the potential for a strong divergence top to develop. Short term holders and traders should now monitor the RSI for a cross below the 50 level as a sell signal.

Comments from last week: Gold remains with a strong Primary UP trend.

The successful retest of the $2956.0 level last week has set an impulsive price movement with follow through higher over the prior $3167.50 high. As the past 5 bars have set a low below 2 weeks ago and a new high the Weekly chart shows an outside range, this can be highly indicative of a short term top approaching. Until a reversal pattern shows the current projection is for a higher price within this Primary UP Trend.

AUD GOLD – DAILY: Bullish range

AUD Gold has reached a new closing high, signalling strong upward momentum in the market. With USD Gold prices continuing to rise and the Australian dollar holding within the 62c to 63c range, the conditions remain favourable for further price gains. The steady performance of the $AUD relative to USD Gold supports expectations for continued strength, as investors respond to shifting global market expectations around inflation and uncertainty in the US Bond market. Traders will be monitoring whether this momentum sustains and if higher resistance levels come into play in the near term.

Indicator:  Relative Strength 14: 

The Relative Strength Index (RSI) is showing a consistent move above the pivotal 50 level and 70 level. This persistence above the 70 topline 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. With $USD Gold surging higher and the $AUD remaining stable around the $0.62-63c level the Australian dollar Gold price continues to move high in this exponential Trend. This type of exponential price move can lead to a sharp reversal as profit taking takes place in the underlying USD Gold price or a strong move higher in the $AUD. Australian Gold producers will continue to benefit from this price action.

SILVER Price structure:  Silver is not Gold.

Silver has surged to the $32.50 level, encountering selling pressure as the market approached the weekly close. This suggests that traders are taking profits or positioning ahead of potential shifts in price action. Despite this, Silver continues to trade within a broad consolidation zone between support at $28.72 and resistance of $35.00, indicating that the market is still searching for direction. A sustained breakout or rejection from this $32.50 area could provide the next major movement, with traders closely watching technical indicators and external market influences for further confirmation

Relative strength 14:

The relative strength index (RSI) has moved higher to align with the recent short-term reversal in price, from dipping below the critical 30 threshold, which typically signifies oversold conditions the current move higher has moved over the 50 level. This movement suggests a potential stabilization or recovery following the reversal.

Comments from last week. Silver has again tested the lower channel in this ongoing range trade between Support at $28.50and resistance at $35.00. The 3 bar pattern set last week has also set a pivot reversal.

The resistance level at $32.50 remains a key level to cross in this current momentum move higher. Silver is not Gold.

AUSTRALIAN VOLATILITY INDEX:  The equities trader’s compass.

The current volatility closing value has closed above the key 13 level with 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 higher priced PUT options to cover downside portfolio risk.

With the indicator value moving lower from the high Mid-week, the forward pricing (Volatility) of PUT options (insurance) is decreasing, this is observed with an advance in the market. Volatility now rules in this current XJO200 corrective 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 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.