XJO WEEKLY
Price structure: Bullish Weekly close

The Weekly chart of the XJO shows a bullish reversal bar with a close above the mid range of the overall bar. Wit the retest towards the 7200 low falling short it adds to the bullishness of the current run from the 6930 support level. Traders should look for a further close above the 7565 and 7632 levels to confirm the resumption of the developing trend.

Indicator: Relative strength 14:

Relative strength remains above the 50 level again as part of the overall directional move higher in price. Only further movements towards the 70 level will remain a bullish signal for further gains, last week the RSI value moved lower a continued move below this important level to the 50 level would signal further Bearish momentum as sentiment may change.

Comments last week: The week in balance below the 7565 level without a retest towards the 7200 level. Further consolidation would be expected without an economic driver to influence market buying or selling. Consolidation in the form of a developing Bullish flag pattern in this “high place” remains bullish for further gains only on a close above the 7632 level. Seasonally January can set the tone for the coming year. The Bullish impulsive movement set 5 weeks back remains the dominant feature in this Weekly view.

XJO DAILY
Price structure: Bullish pivot reversal

The development of the a,b,c type retracement is a very Bullish development in the Index with last Friday completing a Pivot point reversal. The Index displayed the same pattern during November 2023 with a completed breakout to the high side. The Weekly trend is UP with this early signal in the Daily chart not confirming the potential to retest towards the 7600 high.

Indicator: Relative strength 14:

The Relative strength Indicator (14) has turned higher into the close on Friday, as the Relative strength indicator had a swing to move below the 50-level following the sell divergence signal discussed 3 weeks ago the current close above the 50 remains the play for this week.

Comments last week:

The Daily price structure of the current Pennant pattern importantly has formed above the 7472 level. The Daily chart suggests a move lower to complete the Pennant pattern, potentially towards the 7290 level.  The mixture of UP close and DOWN close highlight the indecision of the market. A further short-term decline should be expected. Within the equities market a “buy the dip” scenario should be presented.

S&P 500 WEEKLY
Price structure: breakout exceeds resistance level.

The S&P has moved to an all-time high with the close above the 4818 level with the close towards the high of the weekly range following the retest lower midweek the momentum move has the potential to move the Index higher.

The failure of the reverse pivot of 3 weeks ago to retest the 4545 support level highlights the bullishness of the Index that remains in a strong Primary UP trend.

Indicator: Relative Strength Indicator 14

Relative strength has again turned higher and moves below the 70 level towards the 70 level, but to give a strong momentum signal the RSI should move over the 70 level with any underlying price advances. In the coming weeks this consolidation towards the 4545 level may re-assert a bearish RSI signal as the Relative strength indicator turns lower below the 50 level.

Comments from last week: 

The immediate Pivot reversal setting a new intra week high, sets a very bullish tone for this week with follow through expected to take the Index past the all time high of 4818 in an immediate short covering rally. Price failure from this level would be a significant event with the potential to retest the 4545 level a strong possibility. A close below the 4700 level would offer that possibility.

SPX DAILY
Price structure: Sell divergence complete.

The Daily chart of the S&P500 now displays a strong support level at 4700 with 3 retests on that level. The strong range day last Friday has the potential to follow through to higher levels following the display of a morning star pattern at #3, this has set a second bullish pivot point now in the background but a strong signal of buyers taking control of prices.

Indicator: Relative Strength Indicator 14

Relative strength Indicator has moved below the 70 level indicating weakening momentum. Although not a signal of over brought, the current second and third movement into this over 70 level is often seen as a level to take profits as seen during December 2023. The Sell divergence signal has been resolved with the RIS line setting a new higher low and moving back towards the 70 level.

Comments from last week: 

The Daily pivot reversal bar has set the market an a retest of the highs, the current OPd (outside period d) has a very high probability of marking the current 2nd high at this level below the 4800 mark. The underlying Daily trend is UP with strong support developing at 4700 points.

It remains, the chart has several unresolved “open gaps” towards the 4,400 level and below.

NASDAQ DAILY
Price structure: Bullish breakout.

With the Pivot point set and the current breakaway gapping of price the Index to set to move to new highs. With the underlying primary trend remaining UP the divergence away from the 200 day moving average ( also pointing up) is a cause of concern in the short term. Confirmed by the strong range day set last Friday, traders should be aware profit taking can be swift at these high levels.

Indicator: Relative Strength 14

Relative strength has again moved towards the 70 range, it remains an area to monitor for and further exhaustion reversal.

The observance is the overall Relative strength is again, bullish. The RSI should now be monitored for a further movement higher indicating a change to positive momentum and completion of the divergence sell signal indicating a bullish turn.

Comments from last week: The price rally last week fell short of taking out the Pivot Point high set 2 weeks ago. This sets a further divergence with the S&P500 setting a new intra-week high. The underlying Primary trend is UP however this is a potential lower high being set with the Outside range with a 94% probability of the high in place last Thursday. Last Friday’s small range bar indicates the market in balance.

USD Spot GOLD – DAILY: Bull Trap at the 5th High?

The daily chart has again begun to trend down from the $2072 highs, the retest and failure at the $2049-$2050 remains a strong bearish signal. Further failure of price to exceed this level in the coming week will keep the technical sell signal in place. The broader (Weekly) trend in Gold remains UP from the October lows, however continued weakness below the $2049-$2050 level has the potential to set a new weekly downtrend in place.

Indicator: Relative Strength 14

The RSI turning lower from below the key 70 level to below the 50 level, again turning higher with the rising price, during the current consolidation in price only with a price breakout higher will move the indicator higher towards the 70 level, a Relative strength reading below 50 indicates bearish momentum. Long term traders should continue to monitor this long term Daily chart for a 5th major yearly top in progress at the $2072.0 level with further declines in the long term.

Comments from last week: 

 A new bullish pivot setting the current “higher low” at $2020. The resistance level of $2049 continues to work against the current movement. As Gold is trading towards the all-time high price of $2072, the current higher low development is bullish for further gains. Weakness in price will be seen should the current $2020 support level fail to hold any retracement in price. Gold remains within a significant trading range.

SILVER
Price structure: No trend

Silver again retests the $22.50 level with some indecision bars set last Thursday and Friday. This pattern is a Bearish consolidation with the potential for a price move lower towards the $22.09 level and lower. Silver remains within a large consolidation zone below $26.40 and above $22.09 with no identifiable primary trend in place.

Relative strength 14:

Current Relative strength has turned lower from below the 50 level to move sideways at this level, indicating momentum has turned neutral, if the RSI continues lower, the bearish momentum signal will show a continued price movement lower. Only a continued move higher would reflect a solid change in the underlying price momentum would alert to a potential new trend and breakout.

Comments from last week:  Silver set an important “Pivot Point” above the key support level of $22.50. Rejection at the end of Friday saw the closing price well down in the Daily range. Silver remains within a well defined trading range between $22.50 support and $24.60 resistance. No underlying trend is identified.

AUSTRALIAN VOLATILITY INDEX: The equities traders compass.

The current volatility closing value has moved to above the 11 level, closing lower the XVI is within the “bullish” level. With the indicator now moving higher the forward pricing of PUT options is now increasing, this is observed against a rising market indicating equity price movements may turn further bullish as the cost of 3 month (insurance) Put Options is increasing (demand).

For continued support of equities, the XVI should remain subdued below the “13” level.

The cost of 3month forward PUT options is decreasing from recent elevated levels.

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 as forward price changes, this “skew” in pricing is measured in this XVI. The XVI value works as an inverse observation to the underlying market.