XJO WEEKLY
Price structure: Breakout

The 8385 level has remained the key resistance level to cross for the XJO 200 to remain bullish. A continued breakout above this level would be a significant bullish signal, attracting more buyers into the market and driving prices higher. Market participants will be closely monitoring the price action around the 8385 level to provide a price support level, as sustained trading above this support could pave the way for further gains.

The 8385 level has remained the key resistance level to cross since November 2024.

Indicator: Relative Strength 14:  Remains Bullish

Relative strength has turned higher in line with the rejection of lower prices and remains above The key 50 level indicating overall Bullish momentum. Only further movements higher towards the 70 level can set a continuing bullish signal for further higher price movements.
Should the RSI turn further lower to move to or below the 50 level, the strong indication is for negative momentum to develop leading to Trend failure and further declines.

Comments last week:  The Index is moving between to key levels of 8083 operating as Support and 8385 as Resistance. The current risk is a breakdown of the Index through support, at the 8083 level. Should this support fail, it would indicate a potential shift in market sentiment, possibly leading to further declines and a challenge to the prevailing uptrend that has characterized the past year. Traders and investors will be closely watching for any signs of weakness, which could trigger a wave of selling pressure and push the Index below this critical support level.

XJO DAILY
Price structure: Support Building.

The daily chart for the XJO 200 indicates that support is building, with prices finding a foothold at the 8385 level and building a potential base formation. Traders should closely observe the daily movements to gauge the strength of this emerging support. The importance of maintaining support above the 8083 level cannot be overstated, as it would reinforce the bullish sentiment and provide a solid foundation for future rallies. With a series of Higher low points in place the Index is working towards a retest of the 8514 highs.

Indicator: Relative Strength 14:

The Relative strength Indicator (14) has turned higher into the close last Friday and has remained above the important 50 level, the overall RSI trend shows slowing momentum. Should a move occur lower to or below the 50 level, Traders would be looking for further Sell signals should a continued lower price move occur with the RSI closing below the “30” level targeting 20. 

Comments from last week: The Daily view of the Index more clearly highlights the importance of the 8330 level as resistance has developed at this level late last year. This level has acted as a significant barrier to upward price movements, with several attempts to breach it being met with strong selling pressure as defined in the November December period last year. This persistent resistance has created a critical point of focus for traders and investors alike, as any successful break above 8330 could signal a renewed Bullish phase and potential for higher price targets towards the 8500 level. Failure to overcome this resistance could reinforce the Bearish outlook and lead to further testing of lower support levels.

S&P 500 WEEKLY: Breakout. 

The S&P500 continues to consolidate along the 5853-support level, as markets contemplate the first days of the new US Presidency. Overall, the structure is becoming very Bullish for further gains. The underlying Primary Trend remains UP.

Any failure to maintain these support levels could signal a sudden shift in market sentiment, leading to increased selling pressure and potential declines. Traders and investors should remain vigilant, closely monitoring support levels at 5853 and RSI movements to avoid potential losses.

Indicator: Relative Strength Indicator 14.  Divergence failure

The Bearish Divergence being observed in the Relative Strength Index (RSI) has signaled a failure, no follow through lower has taken place. This occurs when prices continue to rise while the RSI also trends higher, indicating strengthening momentum and higher prices.

The RSI showing a longer-term Bearish Divergence confirming caution remains. If the RSI crosses below the key threshold of 50, it may confirm a bearish outlook.

Comments from last week: Support along the 5853 level continues to build, reflecting a critical area where buyers are stepping in to defend this price point. This level has been tested multiple times, and each retest has seen a resurgence in buying activity, suggesting its importance as a key support zone. The market’s ability to maintain above this level could signal the potential for a bullish reversal, especially if accompanied by increasing volumes and positive momentum indicators.

SPX DAILY Price Structure: Island top

The Island Top, defined by a higher Gap open followed by consolidation when this is completed should a Gap down in price occur the top will be in place. As the S&P trades back into the all-time higher area the risk remains of a sharp decline. The 6020 level remains as current key support level, however the current breakout is very Bullish for further gains should the Index continue to close over the 6100 point level this trading week. The Index has set new highs following a consolidation decline during December and January.

Indicator: Relative strength 14. Bullish Divergence

The Relative Strength Indicator (RSI) continues to show a bullish divergence, suggesting that with the rising prices, momentum to the upside is building. If the RSI falls below the pivotal 50 level, it would likely confirm a bearish outlook, leading to further downside targets.

Comments from last week:  Overall the market remains cautious as the new US presidential cycle begins this week.

The S&P 500 has shown critical support and resistance levels with 5900 points acting as support and 6020 points serving as resistance. These levels are vital for traders to watch, as the market’s ability to breach these thresholds could indicate the next directional move. A break above 6020 could signal renewed bullish momentum, while a failure to hold 5900 could lead to further declines.

NASDAQ (100) DAILY Price structure: Island

With the Index Gapping higher and consolidating in the past week the potential for an Island top remains in place. Should the price Gap drop from this level the top will be confirmed. The current breakout from the declining pattern (3 lows) remains bullish only with continuing closes over the 21,600 level. 

As we move forward, this week the current UP trend is expected to remain in place. The potential for reversal remains with the 21,340-level remaining as key support.

Indicator: Relative Strength 14: Bearish turn

Relative strength has now turned higher while moving back above the 50 level, indicating strengthening momentum as price also moves higher. The rising RSI over the 50 value can provide some early insight for the current Major Primary UP trend to develop further. A further move lower towards the 50 level would send a very Bearish signal not to be ignored.

Comments from last week: The downward sloping price channel continues to develop within the Nasdaq, characterized by lower highs and lower lows. This pattern underscores the persistent bearish pressure, suggesting that traders should remain cautious. 

As the Nasdaq navigates this downtrend, the interplay between price structure and relative strength will be crucial. The new “Gap open sell signal” occurred last Friday, signalling further potential weakness. Additionally, the rising wedge pattern adds complexity, indicating potential major reversals that could disrupt the current Primary UP trend.

USD Spot GOLD – DAILY: Resistance

USD Gold has moved to retest the $2790 levels set in October last year. The USD Gold has been on a bullish trajectory, recently testing the resistance levels around $2790 set in October of the previous year. The sustained upward movement from the pennant pattern indicates strong bullish momentum, suggesting further gains are on the horizon. The market momentum remains positive, as evidenced by the RSI’s behaviour, which continues to move higher above the pivotal 50 level. This is a bullish signal, reinforcing the potential for further upward advances in the coming weeks. However, traders should remain vigilant for any price declines towards the $2717.0 level, as this could signal a shift in momentum.

Indicator: Relative Strength 14: Swing Lower continues.

The RSI has turned sideways and higher to finish above the 50 level. This is a bullish signal, and it remains a strong observation price is resuming upward momentum. Further advances in the coming weeks over the 70 level will remain a very Bullish signal.  Price declines from this level will see the RSI move lower towards the 50 level.

Comments from last week: USD gold has again moved higher to find resistance at the 2717.0 level. In the larger picture, the breakout higher from the major pennant formation is important. This breakout indicates a potential shift in market sentiment and reinforces the underlying bullish momentum. As traders closely watch for further advances, the RSI’s movement will be critical in assessing the strength and sustainability of this trend.

If the price manages to sustain above the 2717.0 resistance level, it could pave the way for further upward movement and potentially establish new highs. However, any failure to hold above this level may result in a pullback, providing an opportunity for traders to reassess their positions. Moreover, the RSI’s behaviour around the 50 level will offer valuable insights into the market’s next move.

AUD GOLD – DAILY: Primary UP Trend.

The $AUD Gold price continues to move higher as a combination of the increasing USD Gold price but being partially offset by the appreciation in the underlying $AUD. This remains very Bullish for unhedged Australian Gold producers. As the AUD Gold price advances, the next significant resistance level to watch is around the A$4,500 mark.

Indicator:  Relative Strength 14:  

The Relative Strength Index (RSI) remains a crucial indicator, showing a consistent move above the pivotal 50 level. This persistence above the 50 midline suggests that the bullish momentum is not only intact but likely to 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.

The weekly chart of AUD Gold has further developed into a major UP trend, solidifying its bullish outlook. Given the current closing high, this remains a very strong signal for Australian-based Gold miners’ price appreciation. The current Primary UP remains strong and intact. As the AUD Gold price advances, the next significant resistance level to watch is around the A$4,500 mark.

SILVER Price structure: Daily UP trend remains

Silver is not within a major Weekly Bull market trend and continues to consolidate above the $29.60 level. Based on this week’s closing price the appreciation value in Silver has been the same as Gold since 2022 at 70%. The Gold price must move substantially higher to bring Silver higher, a close over the $31.50 would be significant. The current view is Silver remains within a large price consolidation area below the $32.0 level and above the $28.80 level.

Relative Strength 14:

Relative strength is now moving in line with the underlying reversal price structure. The current reading has moved above the key 50 level, showing increasing Bullish momentum.  This indicator should be monitored for a BUY divergence signal, completed with a continuing closing price above $29.60 level.

Comments from last week: Silver’s recent performance has shown a modest uptick over the past week, yet it is crucial for the price to maintain its hold on the $29.60 support level. This level is not just a psychological threshold but a technical level that, if held, could indicate the beginning of a more substantial upward trend. Failure to sustain above this support might signal a potential fallback into the prevailing downtrend, thereby dampening the prospects of a near-term reversal. Traders will need to keep a vigilant eye on the price action around this key level to gauge the future direction of Silver.

AUSTRALIAN VOLATILITY INDEX:  The equities trader’s compass.

The current volatility closing value has moved lower to close below the key 11 level following a small spike higher during the week.  Current closing value indicates the XVI volatility level is within the Complacement level for Equities as the market volatility begins to see lower priced PUT option insurance to cover portfolio risk. 

With the indicator value moving higher Mid-week, the forward pricing (Volatility) of PUT options (insurance) was increasing, however this is observed against an overall Bullish advance in the market.

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 correlation to the underlying market.