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Black and White Technical Report: The Week Beginning 15/03/2021

Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets

While Bond market news flow continues to discount the prospect of higher prices the US Indices push on to set new highs in the S&P 500 and Russell 2000. It could be considered the components of these indices will benefit the most from the Stimulus checks going out in the coming weeks.

With Bond yields rising to equal the dividend return in the S&P 500 traders could keep in mind the capital growth of equities will benefit traders.

Gold and Silver have set new and important lows in the past week. This sector is considered to be in the early stages of a new price rally.

XJO WEEKLY
Price structure:
Solid consolidation around the 6737 continues to develop, while the Daily volume profile suggests distribution, current price action remains trading in small weekly ranges without commitment from the Buyers or the sellers.

7130 remains the upside target.

This current 6737 shall remain an important level to hold in the coming week.

Frist support level 6430.

Heavily weighted into the Index are the 4 pillar banks with CBA the largest, followed by CSL BHP. Currently all of the largest weighted stocks remain in Primary UP trends.


Indicator: Relative Strength
The RSI indicator has remained over the key 50 level, last week a little higher, a sign of improving price momentum. 

The RSI should be monitored for a move below the key level of 50 to show a completed shift to bearish momentum.

 

Indicator: MACD
MACD remains a swing entered a Sell signal, It should be acknowledged this indicator can be very slow to react on a weekly basis and may continue to track sideways in the coming weeks as it did during 2019.

Traders should notice the faster average (orange) is now turning down and may swing to a sell signal.

Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets
Comments from last week:
The break of a potential short term trend line has developed as price consolidates around the 6737 level. The chart remains within a Primary UP trend, with a bullish pattern developing over the past 4 weeks of consolidation. 
A breakout over the OPd high 6938 is required to confirm a Primary trend remains in place.

 

XJO DAILY
Price structure:
The developing Daily support level of 6655 was again tested last week with an immediate reaction higher towards 6837. The daily chart displays a significant consolidation pattern developing from last November 2020.  Friday’s price action confirmed a “pivot point reversal”, continuation should be expected in the coming week.

 

Indicator:  Relative Strength
With RSI making a series of lower highs recently and remains tracking below the 50 level, setting a bearish momentum signal, which also remains in line with the neutral consolidation price action, a view of higher market momentum should continue to be held.

Indicator:  VOLUME:   Fridays LOW volume showed lack of support for higher prices.
High Volumes in this small pattern indicate an increase of selling on down days, this indicator should now be monitored for declining volumes to signal a loss of selling momentum.

Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets

Comments from last week:  The daily chart shows a new support level developing at 6655, this will be the level to hold in the coming week as further consolidation takes place. With several levels of Support and Resistance showing a breakout will have some significance if completed on high volume. The mix of down days on high volume signifies distribution.


S&P 500 WEEKLY
Price structure:
The S&P has set a new Bullish Pivot point with last weeks close in the top part of the overall range and a record closing value. The 3725 has been successfully retested, this level will remain a key level to hold in the coming week. The expectation is for a continuation to higher prices in the coming week.  This will reflect in the RSI reading (see below).

 

Indicator: Relative Strength Indicator
Relative Strength remains above the key 50 level and has set a Bearish divergence from price. This not the same but remains remarkably similar to the Jan Feb 2020 divergence setup and continues to play out. RSI is currently reflecting slower momentum as consolidation takes place, a movement below the 50 level would signal strong bearish price momentum. It should be acknowledged the RSI has also remained above the 50 level for the past 11 months.

Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets

Comments from last week: Weekly support at 3725 will be the key level to hold in the coming week, it should be noted last week’s closing value was higher than the previous week (2 weeks ago). The market has not displayed any bearish momentum and simply remains in consolidation. The weekly high of 3950 will be the key level to take out on a price rally from this level.

 

S&P 500 DAILY
Price structure:
Continued higher daily closes equals strong price momentum. While Bond market news flow continues to discount the prospect of higher prices the Index pushes on. Friday’s inside day is an important signal for Monday’s trade as the market seems in balance. A closing price higher may signal overall higher prices for the coming week.

Indicator: Relative Strength
Relative Strength short term has turned BULLISH. The RSI should be monitored for a movement and continuing close above the 50 level and further move above the key 70 level as upward momentum may gather pace.

Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets

Comments from last week:  The potential is for a completed a, b, c retracement, the signal is Fridays large range bar with a high close, can be very bullish for further gains in the coming days. With one small resistance level to overcome at 3872.0, a daily close over this level would signal a retest of the highs underway. A new tentative trend line (2 points) is now in place. A price breakdown below last Thursdays low at 3723 would be a very bearish signal.  The next significant downside price GAP to fill is shown at 3390.

 

USD Spot GOLD – WEEKLY
Price structure:
The long-term trend line now confirmed as valid (3touches) has given immediate support to the recent weekly declines. This coming week a retest of $1764 will give traders a clearly defined signal of support with a close over this level. Although Gold remains within a Primary down trend this can be viewed as an early signal price has found some support.

 

Indicator: Relative Strength
Relative Strength turns higher and fails to cross the key “50” level. This is an early signal of changing momentum and should be monitored for a close above the 50 level. Look for a continued upturn in the RSI to confirm any potential price rally getting underway.

Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets
Comments from last week: Goldbugs can’t catch a bullish move at the moment. The Primary trend (Weekly) remains firmly DOWN, with a retest of the long term trend line being completed. A further breakdown from this trendline would send a very bearish signal to the long term holders and may see a capitulation move lower through the current trendline to search for the next trendline at circa $1550.

For this price chart to turn Bullish a close over $1764 is required.

AUD GOLD DAILY
Price structure:
The Australian Dollar Gold price chart has also displayed some important reversal signals in the past week.

The 3 Bar reversal with he unbroken low has a high statistical outcome for marking a turning point following a previous decline.

The AUDXAU remains within the definition of a Primary down trend, however this is an important signal for early entry traders into the Australian listed Gold producers.

NCM, NST, SLR, RRL and SBM. 

 

Indicator: Relative Strength
With the RSI turning higher from below the key 30 level showing a changing momentum. 

The bullish divergence signal did not develop, but this momentum indicator can now be monitored for a continued move above the 30 level.

This momentum indicator needs a continued swing higher over the key 50 level in line with any price gains to confirm a valid buy signal.

Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets

Comments from last week: During the last 2 weeks we have seen a weakening of the Australian dollar from the 80c high to around .7686, a significant decline. However, the underlying USD Gold price has also declined leaving the XAUAUD to languish at 12-month lows.

Last Friday’s OPu (outside up close) may signal a short-term base in this current decline.

This will play out into Australian Gold producers NCM, NST, RRL, SLR and others.

The Australian gold explorers will remain dependant on news flow.

SILVER DAILY
Price structure:
In line with other precious metals charts Silver has also presented a significant reversal signal as the $26.00 support / resistance level is reclaimed.

Last week saw a Bullish pivot reversal set.

Silver remains within a large consolidation phase, however this current 3 Bar price action with the pivot demands traders take notice of a potential resumption of the Primary UP trend.

 

Indicator: Relative Strength
Relative Strength has turned lower below the 50 level, operating in line with the underlying price movement. A good signal for further improvement in price momentum would be a move above the 50 level.

Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets

Comments from last week: Last week Silver traded below the tentative trendline and below the key $26.00 support level. This key level will remain as the resistance level to beat on any upswing in price.

Friday’s “hammer” bar may bring higher prices in the short term.

The Silver chart remains in a far stronger position than its counterpart Gold to take advantage of a change in sentiment in precious metals.

COPPER DAILY
Price structure:  Inventories under pressure.
A further successful retest of the $4.00 support resistance level sets Copper up for further gains in the coming week. This is a very good signal the Buyers are willing to take the price higher.

This chart should be monitored for a closing price below the $4.00 level as an early sign of price weakness.

The Primary Trend remain UP.

 

Indicator: Relative Strength
Relative Strength has moved over the 70 level. 

An early BEARISH divergence signal has continued to confirm. Further confirmation will show as a move below the “70” level.

It should be remembered the RSI can track above the 70 level for many weeks at a time and remains a signal of very strong price momentum.

Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets

Comments from last week:  From the shooting star of 2 weeks ago, the current close remaining above the $4.00 level is a very good signal for further gains. The current consolidation remains strong as the metal found buyers below the $4.00 level during the past week. This current level will be the benchmark of support in the coming days, a close below $4.0 would be a short-term bear signal and should be monitored for plays in the Australian copper stocks, S32 OZL, COD, KFM and others.

AUSTRALIAN VOLATILITY INDEX
Early with the weekly price bar Volatility again spiked higher (bond yield news) 

IT remains of concern the XVI continued to close above the “13” level a signal of elevated volatility.

Closer inspection of the price bars shows last weeks close is a 5 week low and may lead to further declines and will remain Bullish for equities.

The XVI is the difference of 1-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.   

Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets
Comments from last week: The XVI has moved higher from an early week low in line with market volatility, however the close is shown lower than the previous week.

With the market Indexes consolidating a move lower would be expected.

The current reading of 16.6 is not extreme but remains elevated.

USD DOLLAR INDEX
Price structure:
This remains the most important chart for traders. The breakout above the 91.66 level is significant as is the current orderly decline in the form of a Bullish Flag.

Last week’s breakout put the DXY into a Primary UP trend.

 

Indicator:  Relative Strength
While the RSI has made a sharp recovery above the 50 level. Traders will look for an RSI to remain above the 50 level to confirm a more significant momentum move higher is underway, this remains highly probable. 

The December / January divergence signal is playing out.

Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets

Comments from last week:  The flight to the USD is underway as the price breaks out above the down trend line and first level of major resistance shown at 91.66.

With Bond yields increasing and approaching the Dividend yield of the S&P500, this current bullish move would be expected to continue.

While the RSI has made a sharp recovery above the 50 level. Traders will look for an RSI to remain above the 50 level to confirm a more significant momentum move higher is underway, this remains highly probable. 

The December / January divergence signal is playing out.

WTI CRUDE OIL
Price structure:  This commodity is news driven by supply -demand.
Price consolidation along this $66.00 level is an important development with the $75.20 resistance level in sight.

The current trendline should be monitored as the dynamic support for next weeks price moves.

With US driving season approaching WTI should be well supported.

Indicator: Relative Strength
RSI turning higher over the 50 level and now over 70 remains in a very good place for further momentum price gains until a dip below the 70 level. 

The indicator is “rolling” lower in line with current price consolidation.

As the indicator remains over 70, this should also be monitored for a potential divergence signal.

Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets

Comments from last week: Last week saw a very strong move in WTI to test the $66.00 level without hesitation. The Primary Trend in Oil remains UP. The next key level for WTI is the July 2018 resistance level shown at $75.20. With he short trendline in place a breach of the line may signal the first move into consolidation of price. With as closing price below support at $61.80 a signal for a retracement would be in place.

  • Black and White Technical Report: The Week Beginning 15/03/2021, FP Markets
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