The strong jobs report from last Friday again sets up a further strong technical sell signal.
US and Australian Indices remain in a Primary downtrend with support levels ignored as price move lower. US and Australian reporting season has finished this now leads into the September quarter, a seasonally volatile period.
Copper sets a second strong bear signal in an already declining market.
Gold and Silver continue the Primary downtrend with Silver clearly the weaker of the two.
Last week set a strong impulsive move underway without respect for potential support at 6930 in this weekly view. The strong range high to low sets up a retest of the tentative trendline at 6640.
The underlying Primary trend is down.
Relative Strength has closed below the 50 levels and set a lower high as part of the overall decline in Relative Strength. Price momentum has turned negative on the lower side of 50. However, should Relative Strength move above the key 50 levels a signal of improving price momentum would prevail.
Comments from last week: The Weekly chart of the XJO displays a “hangman” bar for last week, in the weekly timeframe this is a very bearish signal and price weakness to develop. The Primary trend has remained down for the past 5 months with last week potentially marking the new lower high point. The initial downside target is 6930 with 6640 and the tentative trendline is both inline to be tested.
Rejection of 7130 has set 2 strong movements lower in the past week. The 6930 level did provide some short-term support, however, the impulsive move lower towards 6765 sets up the potential for further support, a close below this level brings into play a retest of the June lows circa 6400 points.
The Relative Strength Indicator (14) reflecting the underlying price momentum has moved lower blow the 50 levels indicating weak momentum. The Daily Relative Strength did set up a divergence sell signal and may signal a continuing retest towards the 6765 and lower level on this slowing momentum.
Again, last Friday’s lower volume bar is not an encouraging signal to indicate new buyers/money is entering the market following the mid-week volume spikes.
Only stronger volumes over 1Bil on a Daily basis would indicate strong new money buying.
Comments from last week: Last staged a retest of the 7130 closing price high set on the 17th of August. The declining volumes on this current rally only suggest turnover of equities with no new money entering the market. This current small double top has the potential to retest the 6930 level in the coming days. The next following daily support is 6765 essentially being the lower extension of the double top should the low (6950) set a lower close on a daily basis.
A decisive follow-through week below the weekly support of 4050, only sets up for a retest of 3715 as the Primary downtrend confirms a second lower high at the FO+1 high. Of note is the weekly price ranges from high to low have remained strong during the overall downtrend from Q2 2022. Often referred to as a “committed sell” and offers no evidence of buying support.
The reading below the 50 level sets up the sell signal on momentum, last week the indicator turned further lower, indicating a change in momentum. A movement towards the 30 level would be a very strong short-term bearish signal. Positive momentum requires a reading above the key level of 50.
Comments from last week: As expected from last week, the FO bar of 2 weeks ago has played out reversing the immediate price direction. The Weekly chart has confirmed higher price rejection with a pivot point in place below the short trendline with the price also closing below the important 4200 level. The SPX has remained within a Primary downtrend since March 2022, the current price rejection has the potential to move the index lower to retest 3715 lows.
The pivot reversal discussed last week has followed through with 1 period of support at the 3940 level before continued selling lower. The break of the short-term trendline is further evidence of the “committed sell” underway. This has the potential to retest 3740 very quickly.
Relative Strength has continued the decline below the 50 levels as price action declines. The uptick last Friday may be discounted very quickly as further price declines occur.
Comments from last week: Last Friday set up a pivot reversal with a large range and “impulsive” movement lower. These types of moves can headline a continuation move for the coming days. Rejection of the 200-day moving average is now complete with the current lower high in place also reconfirming the larger weekly trend. The first significant weekly support is shown at 3940.
Price moving over the 4200 level would signal a bullish reversal.
The continued movement lower from the “Opd” sets up the trendline target of circa 11,500 points. This seasonally weak period of the year may be self-full filling, so the current declines cannot be ignored as a signal of further weakness given the current close below the 12,175 level.
The Relative Strength Indicator moving below the 50 levels is a signal of a loss of positive momentum. With a continuing move, the indicator may cross lower below the 30 levels, the price movement will remain negative with a continued reading below 50 and have the potential to retest the tentative trendline.
Comments from last week: The Daily Nasdaq displays the same “lower high” price rejection with an OPd (outside period) the current test of 12573 will offer further insight to price movement with a break below this level. Friday range is very large compared to recent price movements, this type of movement often precedes further declines.
Gold continues the decline back into the channel, the next support level indicated is $1676.0. Friday close sets up a bullish pivot point, however, this reversal signal is set against the Primary downtrend and without any further catalysts for price support further declines should be expected.
Price momentum is working lower with the RSI turning lower below the 50 levels. Price momentum has again turned negative, and the current “uptick” may be discounted very quickly. (Price consolidation would naturally see the RSI drift back to around the 50 levels. A strong movement, either way will show the next directional move.)
Comments from last week: Rejection from the developed Bear flag (3+ bars) has moved the price back into the long-term downward price channel. A further breakdown below $1720 would further confirm the current move underway. The daily range is larger than previous ranges indicating a further directional move may be underway. The first significant support level is $1720 with $1676 below.
Unlike Gold, Silver has set a decisive deeper low in this case below the $18.40 level with a test towards the $17.20 level. The potential for a retest higher to the $18.40 as resistance would give an indication of buyer strength or not. Silver remains within a Primary down trend without evidence of a base pattern or strong reversal.
Current Relative Strength is rolling lower with the movement below the 30-level, RSI turning lower would reflect the underlying momentum turning negative. A continuing move along the 30 levels and lower would be very bearish in the short term. Price consolidation would see the relative strength turn towards the 50 levels.
Comments from last week: The Daily chart of Silver also displays a bear flag breakdown from last Friday’s trading session. The $18.40 support level remains as the current downside target in this primary downtrend.
Again, nothing to report from this steady decline. Australian Gold producers will continue to trend lower as the $AUDXAU price decline. The $AUDXAU price remains within a very large consolidation zone and will continue to place Australian producers under price pressure.
Relative Strength has turned sideways and lowered from above the 50 levels, this shows a decrease in positive price momentum and remains a strong warning for further declines.
Comments from last week: AUD Gold continues to consolidate along the $2537.0 level, the lower shadows of recent bars offer insight into current support. A lower support level is $2440 with the down trendline as upper resistance.
The FO discussed last week has followed through with lower prices, importantly the impulsive range close below the $3.47 level sets up a further retest of the $3.20 previous low level. Copper remains within a Primary downtrend.
The current reading has swung from below the 30-level to read higher as downward momentum has slowed however the current reading remains below the key 50 levels. The key now is for the RSI to swing back above the 50 levels as a reflection of ongoing price gains. A sharp cross of the 50 levels is required to offer a strong buy signal.
Comments from last week: Copper set a small FO (Fake Out) of last Wednesday’s high, this second rejection of the $3.80 level. This small pattern has the potential to set lower prices in the days ahead.
The volatility reading has moved sharply above the 13 levels indicating forward pricing of PUT options is increasing. In general, lower equity prices or consolidation of equity prices is indicated as the reading remains above the 13 levels.
For continued support of equities, the XVI should move below the “13” level.
The cost of 3month forward PUT options is decreasing from recent elevated levels.
The XVI is the difference between the 3-month forward pricing of ETO Options against the current month.
As markets anticipate events, the forward-priced option volatility changes, hence as forwarding price changes, this “skew” in pricing is measured in this XVI.
The XVI value works as an inverse observation to the underlying market.
The close above the 110 level was quickly rejected last Friday, the potential now is for the DXY to enter into a consolidation phase above the 108 level. The underlying primary trend is UP. In the short term, a continued close above the 109 level may follow through higher very quickly.
The Relative Strength has turned higher in line with price movements and should now be monitored for further consolidation as the current reading is above the 50 levels but below the 70 levels. This will move lower to sideways should the price decline further, only a continued reading above the 50 levels would indicate continuing strong price momentum.
Comments from last week: Following last week’s early rally to test the 110 level the current decline is developing into a bullish flag pattern. The current OP (outside period) can mark the swing point higher. The underlying primary trend is up, this flag pattern is a continuation signal within this trend. Price targets from this level maybe 116.0.
Rejection of the $94 level and current support at $84.25. Last week the WTI contract set an OPd (outside period down close) price movement below this level would be very bearish in the short term. However, the OP bar has a high probability of posing a reversal signal, support at $84.25 must hold.
The RSI turning towards the 50 is a result of price consolidation, a move over this key level would signal increasing positive price momentum.
Comments from last week: Consolidation above the $84.25level and below the $94.0 level the larger range week closing above the open is s sign the buyers remain as price also closes outside of the short down trendline. Further a close above $94.0 would regain this level as support, current momentum does not suggest this will occur.
Source - database | Page ID - 21368