XJO WEEKLY    

Price structure: Potential a,b,c pattern.

The significant move from point 5 to point A with the current shallow rally will be monitored for a further decline to set a new C wave decline. With the Index closing over the key 7910 level an immediate follow through higher to cross the 8083 level is required to remain Bullish. The C wave extension target is the 7400 level, a closing price below the 7910 level will set the first confirmation of this target.

Indicator: Relative strength 14: Early buy signal.

Relative strength has turned higher in line with the reversal in the Index and has remained below the key 50 level, should a further price rally occur the RSI will turn higher. 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 Trend failure and further declines.

Comments last week:-  Last week the index set an inside range IPu, this can indicate a period of market consolidation, often suggesting indecision among traders. With a lower high and a higher low compared to the previous week, it shows that the market is waiting for a catalyst to break out in either direction. It is important to note the close is above the key 7910 level at 7931 points. This key level may still provide some resistance in this trading week, an immediate buying move higher is required to take control from the sellers.

XJO DAILY  

Price structure:  Bear flag.

The combination of Daily overlapping price movements in an upward slope against the fluid movement decline to point A from the 8567 resistance level signals a bearish flag development, this was discussed last week with the first target price of 7632 as full confirmation the Sellers retaining control. Should the Bearish C wave develop the 7632 level may provide some initial support, this should be monitored  by short term traders as a gauge to market sentiment.

Indicator:  Relative strength 14:  Bullish

The Relative strength Indicator (14) has moved below the important 50 and 30 levels and currently moving sideways after the initial rise from below the 30 level, the overall RSI trend shows increasing upside momentum associated with the current overlapping trading ranges, but has not crossed the key 50 level. On potential price reversal a move lower further below the 30 level is possible. Traders would be looking for further Buy signal should the RSI close above the “50” level targeting towards 70.

Comments last week The “3-bar triangle” pattern often signals a reversal, and it seems like the XJO Daily chart is aligning with this expectation discussed last week. A reversal underway could indicate a shift in market sentiment, possibly moving from bearish to bullish, depending on the follow through in this trading week. Although the close is above the 7910 level, the rejection bar set last Friday may see the current rally as a bearish flag pattern targeting a lower low at the 7632-point level.

S&P 500 WEEKLY:  Breakdown

The S&P has moved to the downside of the high low range set 2 weeks ago. A further follow through lower will confirm the view that the 5670 level has provided a key resistance level. Until a significant reversal takes place, the Index targets 5120 points. Last weeks range open to the low close displays a larger range, indicating sellers have control. Price moving lower has the Buyers within the last 28 weeks are trapped in a losing position, the current risk is momentum may increase further to the downside.

Indicator:  Relative strength 14.   Turning momentum.

The current movement lower, shows failing price momentum in this consolidation area, only a further move back towards the 50 level will confirm the bullish signal.

If the RSI crosses below the key threshold of 30, it will further confirm the loss of momentum. This week look for a turn higher towards the 50 level to remain bullish.

Comments from last week.:  The key level of 5670 is providing some support with the close last week at 5667 points. The S&P500 has moved into balance. The hammer bar discussed last week has not followed through into higher prices. A closing break either side of last week’s high – low range will offer further direction. The expectation of a bullish reversal remains the expected outcome should a further close over the 5670 level take place.

SPX DAILY   Price structure:  Bear Flag Rejection

The Daily view of the S&P500 shows a very clear technical rejection at the 200-day moving average with a large range setting a pivot point reversal. This was followed by a further large range showing into the close last Friday, momentum is clearly breaking to the downside.  The 5828 level is set as first support, a close below this level would further confirm bearish momentum

Indicator: Relative strength 14. 

The Relative Strength Indicator (RSI) has moved above the key 30 level and tagged the 50 level before turning lower in line with price. Momentum has again turned Bearish. A further 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 and a potential retest of the 5400 level.

Comments from last week:  From the Bullish pivot reversal of 2 weeks ago, last week the Index traded in a small range of overlapping price bars. The important observation is the price action remains below the 200-day moving average. The second observation is prices have found consistent rejection when above the 5670-level indicating strong selling is taking place. A bearish trend may develop with a closing price below 5,525 points during this week.

NASDAQ (100) DAILY Price structure:  Test Reject.

Test and reject of the 200-day SMA set with a pivot point reversal, now sets the tone for further declines. With price filling Monday’s open GAP with no reversal higher, shows the sellers in full control of price movement. The consolidation of price below the 200-day SMA and the current breakdown now targets the 17,000-point area in the long term. In this trading week a close below the $19,180 level sets the Primary down trend in place and first targets the 18,464 level.

Indicator: Relative strength 14: Bearish turn

Relative strength has now turned lower and moving towards the 30 level. The closing price divergence signal discussed last week has met the targeted retest the 200 day SMA.  A further move lower below the 30 level would send a very Bearish signal not to be ignored.

Comments from last week.  The Nasdaq 100 displays a solid week of price consolidation within a small price range. Consistent rejection is showing below the 20,000-point level indicating sellers remain in control. The recent decline from the highs of 22,133 remains a corrective price movement, this does not change the primary UP trend. The Nasdaq has erased gains achieved over the past 6 months. The current decline has met the measured decline from the trading range..

USD Spot GOLD – DAILY:  New high

USD$ Gold continues the strong price momentum trend with a new all-time high. While the primary trend is currently UP, momentum has remained strong as seen in the RSI moving over the 70 level. The current new high in USD Gold was achieved on lower momentum suggesting a divergence. Price has set resistance at $3057 a successful retest of this level followed by a further rally would be very bullish.

Indicator:  Relative Strength 14:  Divergence.

The RSI has turned higher above the 70 level but remains lower than the Mid-March level. This is a signal of weakening momentum; 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 further consolidation at these current levels. Short term holders and traders should now monitor the RSI for a divergent Sell signal.

Comments from last week: USD Gold has set a Pivot Point reversal bar on last Friday’s close; this is a bearish reversal following the fluid movement higher from the $2956.0 breakout level. Continuation from this reversal may retest the $2956 level as support. As USD Gold remains with a strong primary uptrend the expectation will be for a higher low to be set. A closing price below the $2956 support level would send a very bearish signal to the short-term holders and further selling would be expected.

AUD GOLD – DAILY: Bullish Continuation

The strong momentum trend continues on the strength of the $USD Gold price and stable $AUD in the $0.62 cent range. Further consolidation or decline in the $AUD will propel price higher. Local Australian Gold producers are now moving at 52-week highs or towards all-time highs. This has now set off merger and acquisition activity within the industry.

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. Australian dollar Gold trades to $4800 on a strong bullish continuation bar. The decline in the $AUD and appreciation in the USD Gold price has lifted price following the short consolidation above the $4500 level.

Local producers EVN, GOR and NST will benefit from the appreciation in the Gold price.

Gold explorers may not find the same interest without a significant discovery.

SILVER Price structure:  Rejection

As with Gold, Silver has set an RSI divergence as price moves towards testing the $35.00 all-time high level. Silver currently remains within a Primary UP trend with a $36.30 target. The price consolidation may develop above the $33.40 level as first support. A price break below this level may see a retest of the key $32.59 level.

Relative strength 14:

Relative strength is again moving in line with the underlying short-term reversal in price towards the 50 level. This indicator should be monitored for a Sell divergence signal as the indicator sets a lower high completed with a continuing closing price below the $33.40 level.

Comments from last week. The original price target of $36.30 remains intact in the Primary UP trend. Silver has moved to a full Pivot reversal move lower with last Fridays extended range bar. Price resistance is developing below the $35.0 level. The $32.50 level may act as support in the coming days, a break of this level has the trendline support at approximately $32.0. To remain bullish Silver requires a closing price above $34.50..

AUSTRALIAN VOLATILITY INDEX:  The equities trader’s compass.

The current volatility closing value has closed below the key 13 level following a further spike lower during the week.  Current closing value indicates the XVI volatility level has moved to a Bullish level for Equities as the market volatility begins to see mid-week lower demand and subsequently priced PUT option insurance to cover downside portfolio risk.

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