XJO WEEKLY
Price structure: All time high on the close.

The Weekly chart shows a small range low to high advance, the current close at an all-time high is an important observation as no broad profit taking has taken place. Current observable price rejection remains above the 8083 level. This week key support remains above the 7910 level with resistance at 8083 points. The final stages of the Australian FY reporting will be completed this week.

Indicator: Relative Strength 14 – Neutral to Bullish

Relative strength has turned higher in line with the long-range price action for the week and remains above the key 50 level from the bullish momentum within the previous 14 bars. Only further movements higher towards the 70 level can set a continuing bullish signal for further higher price movements. Should the RSI reading move below the 50 level, the strong indication is for negative momentum to develop leading to Trend failure and further consolidation.

Comments last week: Last week the XJO set a solid range low to high to close just below the Weekly all time high closing value of 7971 points and above the key 7910 resistance level. This is a very Bullish setup for further gains with 8500 points the upside target. Although the Index has consolidated above the 7632-point level the Primary trend has remained UP with no reversal signal following through lower.

XJO DAILY
Price structure:  Resistance

The slow grind higher during last week on close examination shows a small retest back towards the 7910 level with recovery to close to the high of the range last Wednesday. The small body of the daily range shows Daily price consolidation. As with the Weekly observation, 7910 remains key support, should a decline gather momentum. In the short term 8000 points is the strong psychological level to hold to keep the buyers interested.

Indicator: Relative Strength 14: Bullish

The Relative Strength Indicator (14) has turned slightly higher over the key 50 level into the close last Friday, the overall indication over the past Month is decreasing momentum. With the RSI over the 50 level, traders would be looking for further BUY momentum should a  continued move occur with the RSI rising over the “50” level towards 70. Overall the Relative strength has remained along the “50” level this year from January indicating a balance in momentum.

Comments from last week: From the sharp decline back to support at 7632 point the Index has moved higher from the “Pivot Point” discussed last week. With initial resistance at 7860 points the Friday breakout range can be described as “Impulsive” also closing above the 7910 level. Expect some Daily consolidation to confirm buyers remain in control. The next key resistance level is 8083, with a further close over this level traders should be concerned for some short-term profit taking.

S&P 500 WEEKLY: New all-time high close.

The strong range bars from the “Gap open buy” followed by the “Pivot point” has continued to set a bullish tone to close at an all time weekly high. Last week the range was small but importantly no overlap into the previous week’s range.  The Spike high resistance level is 5670 points, this will be the level to cross and remain over into the close of this week to remain bullish in the long term. The underlying Primary Trend remains UP.

Indicator: Relative Strength Indicator 14. Bullish gain

Relative strength has sharply risen as strong price momentum has given way to a bullish reversal. The RSI value (momentum) has remained over the key 50 level during this Primary UP trend.  A turn lower towards the 50 with any Index price movement towards the 5000-point level will re-assert a full bearish RSI signal.

Comments from last week: Following the “Gap open Buy” signal discussed last week the Index has moved higher to set a Pivot point Buy signal. The week’s range is strong, low to high, when compared to recent ranges, showing buyers in control. Traders should look for a break over the 5670 level to set a new all time high as the underlying Primary UP trend continues. Reversal should only be considered with a close below the 5400-point level.

SPX DAILY Price Structure: Final Gap fill.

The final “Gap” at 5639 points has been filled with immediate rejection, setting an Outside period OPd last Thursday. Last Friday’s Inside period IP shows the market coming back into balance below the Daily/Weekly high resistance level of 5670. Without follow through lower from the OP set last Thursday the Index may remain bullish. Following the fluid movement from the 5100-point low, when found at a high, the OP has a high statistical outcome for marking the real high swing within the next 3 bars.

Indicator: Relative Strength Indicator 14

Relative Strength Indicator has moved above the 50 level into last Friday, traders should consider a further close above the 50 level as a strong Bullish momentum signal. With a continued move higher above the “50” level the expectation of further advances remains. Relative strength is a momentum indicator, only a swing back higher towards the key 70 level would set a very strong Bullish signal that should not be ignored.

Comments from last week: The Daily view shows a strong recovery move, with a final “Gap open sell” This can be seen as a blow-off type of movement. Traders should look for a consolidation above 5,500 points to confirm the previous movement from the 5100-swing low. This movement is often seen as a second opportunity by trapped buyers to sell against the earlier July high. Too remain bullish within the current Primary UP trend a further closing price over the resistance level of 5670 is required.

NASDAQ (100) DAILY Price structure: Outside + Inside

The Nasdaq has not closed the Gap at 20,000-point points before setting the OP + IP. This week should the price move lower into the 19,100 point “Gap” a bullish reversal should immediately follow for the Index to remain Bullish going into September. The concern is a full reversal at this level will set an observable lower high with the potential to follow lower into the 17,500-level reversing the current Primary UP Trend.

Indicator: Relative Strength 14

Three weeks ago, the momentum indicator turned higher from the key 30 level in line with current price movements. As the Relative strength has now moved above the key 50 level, momentum is Bullish. Relative strength moving higher above the important 50 level is required before a Bullish momentum signal can be declared. This can provide some early insight for Major Primary UP trend continuation, conversely, a move lower below the “50” would indicate a loss of upward momentum.

Comments from last week:  A sign of the current volatility is the number of “Gaps” in price. As with the S&P500 the Nasdaq has also set a Gap open sell signal into the 19,500 level. Price consolidation at this level is required to confirm the previous swing low from the 200-day moving average. The upper price Gap at 20,000 is the target for this current move higher. Only a further close below the current “Gap open” offers a momentum failure sell signal.

USD Spot GOLD – DAILY: Consolidation at $2,500

USD Gold again moves to consolidation, currently at $2,500 level, this remains very bullish for further gains in the near term. The near-term price target of $2570 remains, a further close above this target level is possible on the current price momentum. The current close remains above the $2483 FO high set on July 17th, a very bullish setup. The underlying Primary trend is UP.

Indicator: Relative Strength 14: Bullish

The RSI has turned higher and remains above the 50 level and turned higher towards the 70 level on the close of last week showing a strong momentum move underway. Long-term traders should continue to monitor this daily chart for a 5th major yearly top development at this level, with further declines in the long term. A further close over the $2570 level would negate this view.

Comments from last week: USD Gold has set a Trend continuation breakout bar following the Pivot point swing and the retest of the $2431.3 level set last Thursday. The immediate price target of USD$2570 is shown. With the Fibonacci extension tool, the 61.8% extension of the consolidation range has been met with 100% as the price target with an ultimate target level of 161.8% level, shown at $2650.0.  USD Gold remains within a technical Primary UP trend.

SILVER Price structure: Corrective

Silver is not Gold. USD silver shows the current move underway is corrective within the downtrend but remains highly tradable for short-term price action participants. Last week saw a back test of the $28.80 resistance level again with immediate support with Friday setting a close at the high end of the Daily range.

Relative Strength 14:

Over the past 3 months the Relative Strength has steadily declined and has moved below the 50-level moving towards the 30 level, indicating a sell signal. Last Friday’s close saw the indicator turn higher, with a cross over the 50 level with the 70 level as the target, this would reflect a solid change in the underlying price momentum and confirm Primary UP trend momentum is underway. The RSI should be monitored for a cross below the 50 level indicating MOMENTUM FAILURE.

Comments from last week:  USD silver has set a strong recovery, with a close over the key $28.80 level following the impulsive bar set last Thursday. The next primary resistance target is $31.50. Before a UP trend is considered to look for a higher low swing point to be set, the current move underway is corrective within the downtrend but remains highly tradable for short-term price action participants.

AUSTRALIAN VOLATILITY INDEX: The equities trader’s compass.

The current volatility closing value has moved to close below the key 13 level following a strong move higher above the 13 level on Macro news surrounding the Japanese Yen carry trade and potential US Recession. Current closing value indicates the XVI volatility level has moved back well within the “Bullish for Equities” level. 

With the indicator moving lower, the forward pricing (Volatility) of PUT options (insurance) is decreasing, this is observed against a Bullish market, indicating market participants believe equity price movements may turn higher. 

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

The cost of 3 month forward PUT options is lower 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 this longer dated forward price change, or “skew” in pricing is measured in this XVI. The XVI value works as an inverse correlation to the underlying market.