Black and White Technical Report: The Week Beginning 06/09/2021

Reporting season is now complete, with a number of ex dividend events taking place, the largest in BHP and CSL has kept the XJO Index subdued below the key resistance level identified two weeks ago.

US markets have maintained their very positive bias to the upside, again in the past week we saw failed potential reversal signals as the markets push higher, of note is the Russell 2000 working back to all-time highs.

WTI Oil held a key support level at $66.00 following the lows of two weeks ago and looks set to push higher.

Gold and Silver have turned very Bullish following a surprisingly weak Non-Farm payroll report last Friday night. Both are testing important resistance levels.

Price structure:
The pivot point set three weeks ago is still very much in play with the current resistance level at 7530 remaining in place, technically helped by the ex-dividend effect of the past week.

The underlying Primary trend remains UP as the trendline is further tested in the past week.

The underlying market sentiment remains positive, with some very positive moves in the financials and large miners, this could be expected to continue in the coming week.

7197 remains the long-term support should a retracement take place. However, the target of 7715 remains the preferred observation within this primary UP trend.


Indicator: Relative Strength 14
RSI has remained below the 70 level after negating the potential momentum divergence signal.

The RSI should be monitored for a continued move below the key level of 70 to show a shift lower in price momentum. 

Black and White Technical Report: The Week Beginning 06/09/2021, FP Markets
Comments from last week: 
Last week saw the Index retest the trendline after finding 7530 resistance being the “midpoint” of the previous week’s range. A close of the resistance at 7530 would signal a further longer term move higher to test the price target shown at 7715 and potentially meet the 8000 point mark. The small range last week shows indecision, also with the close midway of the range. A breakdown lower would see the 7197 level at the potential target.


Price structure:
The Daily chart shows the clear development of resistance at 7530, with last Friday closing in on the highs, this level should be broken higher in the coming week on current positive market sentiment.

The observation of last Thursday’s low retesting the 3 bar triangle lows is a bullish signal, however for this week 7400-7450 is the key support area this week on any price weakness. 

Key to the Index moving higher will be the large caps BHP, WES, CSL and Banks remaining positive.


Indicator: Relative Strength 14
The Relative Strength Indicator 14 shows the increase of upward price momentum, most times this indicator shows the obvious, and in this case the observation is the turning sideways around the 50 level as would be expected during a consolidation price range. 


Indicator: VOLUME
Declining volumes into the close of the week suggest further hesitation from the buyers, this will be monitored today for an increase in trading volumes as a signal of accumulation.

Black and White Technical Report: The Week Beginning 06/09/2021, FP Markets

Comments from last week:  The 7530 level is better highlighted in this Daily chart. The 3 bar triangle of 2 weeks ago has held the price action above 7400. Last Friday’s hammer bar is a positive for further gains in the coming days. A daily close above 7530 would be very positive for an initial retest of the 7632 highs and potentially higher. The 7530 may provide further resistance and be seen as a lower high on any price failure at these levels. Next lower support level of 7400 – 7430 will be viewed as the key levels to hold should markets lose the positive sentiment.


Price structure:
The grind higher continues for the S&P 500 as the smaller industrials component finds buyers. The overall “wedge” pattern persists, this type of bearish structure when broken can lead to significant declines, however for this week first support is identified at 4320 should a decline take place.

Although the market is grinding higher, the key observation is the open / close ranges remain very small for the past 6 weeks showing a lack of real commitment from the Buyers.


Indicator:  Relative Strength Indicator 14
Observation, the Relative Strength Indicator, first moved over the “70” level in April this year. Currently, the Relative Strength Indicator has re-emerged and remains as a developing divergence sell signal. The Sell line is shown around the 65 level. It can also be observed that the RSI can track sideways over the “70” level as price creep/consolidation takes place.

Black and White Technical Report: The Week Beginning 06/09/2021, FP Markets

Comments from last week: The outside range of two weeks ago has been disregarded as a potential turning point in the S&P 500 market with new highs set into the last end of week close. The long bearish “wedge” pattern remains intact. Given current price momentum, a breakout higher could be expected, but major support is shown at 4320 and a break lower than this level would give a Bear signal.


Price structure:
The same observation of short trading ranges can be seen following the move higher from 4460 support. This market remains on high alert for a reversal to retest the 4460 level in the short term; the 4536 level is required to hold to maintain the buyer’s confidence. There is NO reversal signal provided in this market in the Weekly or this Daily chart other than the current small ranges to keep traders on alert for weakness. Reversal will come in a large range trading session to the downside as the first key observation of any committed selling.

Indicator: Relative Strength 14
The RSI move along the 70 level would show slowing momentum, however the upturn in response to the pivot reversal 2 weeks ago is a good indicator of continued positive momentum, a move below the 50 level would indicate a loss of price momentum and would be viewed as a signal to retest the support level at 4460 – 4367.

Black and White Technical Report: The Week Beginning 06/09/2021, FP Markets

Comments from last week: Last Thursday provided a small reversal pivot with Friday negating the pattern and closing on the highs of the week. The large range bar indicates some follow-through may occur in the coming days. First level of support is shown at 4460 (-40 points) during this week; that level will become critical to hold as price action develops. Key DAILY support for the S&P 500 is shown at 4367.

Price structure: This Index is the most concerning for traders
Unlike the other US Index’s, the Nasdaq has maintained some strength in the daily ranges with last Friday posting a new closing high from the developing support at 15534.0 level. This level is now the key level to hold in the coming days for the Buyers to remain confident. Price has accelerated away from the tentative and long-term trend lines, a reversion type of retracement could reasonably be expected on a closing price below 15534.0


Indicator: Relative Strength 14
The Relative Strength Indicator turned sideways last week. No real signal can be gleaned from the RSI; however, an overall BEARISH divergence remains in place.

Black and White Technical Report: The Week Beginning 06/09/2021, FP Markets

Comments from last week: Last Monday’s breakout over 15184 has been the key observation in this Daily chart with the following price action holding this important level. In the coming week this will be the key level to hold, however the price action remains very positive for further gains.


USD Spot GOLD – DAILY     
Price structure:
Gold remains one of the best “technical” charts for the week and highlights the importance of identifying key support and resistance within a price chart. Friday night’s close saw the $1834.0 level again tested as part of a continuation price move from support at $1788.0. Gold traders have the opportunity to retest the $1916.40 high price area. A further breakout higher could be expected following Friday’s “impulsive” (large range) bar, in this event traders would look for a “retest” of $1834.0 as a signal for price support.


Indicator:  Relative Strength 14
The Relative Strength is heading back to the 70 level, a signal of increasing price momentum and should again be monitored for a further move higher. 

Black and White Technical Report: The Week Beginning 06/09/2021, FP Markets 

Comments from last week:  An impressive breakout on Friday night saw the $1788.0 level hold as support following last Monday’s breakout along with the short downtrend line broken. Price action should be viewed closely as the keen eye would have seen the breakout level being tested during the past week to set up intra week support. A significant price movement in a leveraged position.

GOLD remains within a trading range of $1764.30 and $1834.0 as resistance.

The current breakout above $1788.0 with a large range price bar is a very bullish signal for further gains, the first being a retest of trading range resistance.


Price structure:
Silver has also put in an impulsive price bar and is currently retesting the short term down trendline. The short-term price structure looks very bullish for further gains to retest resistance at $25.52.

As the larger view shows Silver remains within a broad trading range with $23.00 support and $28.40 resistance, traders could expect a retest of the high in the coming months should momentum remain positive.


Indicator:  Relative Strength 14
Current Relative Strength is viewed as weak upward momentum, this can change, a move over the 50 level would be very positive and reinforce a retest of the $25.52 level.

Black and White Technical Report: The Week Beginning 06/09/2021, FP Markets

Comments from last week: Silver seems to be starting from a lower base with a pivot reversal set last Monday and followed through higher on Friday night. Key resistance at $23.75 has been broken decisively, but the downtrend line remains as the first real test for the buyers of any further gains.

$25.52 remains significant resistance. Silver appears to have set a low price base and is ready for a continued momentum move higher.


Price structure:
The $AUD and GOLD has developed into an a,b,c type of retracement (Bullish) as the $AUD gains strength now at 0.7430 although $USD Gold has traded higher.

Last week a breakout higher was expected, the chart structure remains positive and within a trading range.


Indicator: Relative Strength 14
Relative Strength moving back below the 50 level is in line with price movements. Price momentum has again turned negative, further declines in price will see the RSI decline further, however look for further gains in this reading to underscore any strength in price.

Black and White Technical Report: The Week Beginning 06/09/2021, FP Markets

Comments from last week:  Very good price structure has developed out of the past 4 month trading range. Last week the breakout and shallow retracement has set a new Bullish pivot point with Friday’s close and also confirms a “higher low” at this point in time. First resistance remains at $2541.0.


Price structure:  LME Inventories still remain historically low.
The past midpoint resistance level of $4.33 remains as the level to cross in the short term (daily). The current development is not positive for Copper and may see a further retest of the trendline and potentially the 4.00 level again. Although an a,b,c type retracement is identified, it could be expected Copper will trade between $4.00 and $4.50  Chart remains positive for the longer term underlying Primary UP trend to resume.

Indicator: Relative Strength 14
The current key observation in the RSI is the overall decline from the April 2021 high point. Further confirmation of a loss of momentum is shown as the RSI moves along the “50” level, the “U” turn above the 50 level is a positive sign of improving price momentum, The RSI requires a continued reading above the 50 level to signal positive price momentum.

The underlying Bearish divergence signal is finished.

It should be remembered the RSI can track above the 50 -70 level for many months at a time.

Black and White Technical Report: The Week Beginning 06/09/2021, FP Markets

Comments from last week: Copper set an Inside period up close (IPu) showing the market in balance following the a, b, c type retracement. This is a good indication the retest of the $4.00 level is complete. Going forward $4.00 will remain an immediate key support.


Volatility remains benign (read positive) for Australian equities; the forward premium for PUT options remains in line with the underlying time to expiry values.  Volatilities can change very quickly on news items and trader sentiment. The tenant that states low volatility precedes high volatility also holds true. Risk insurance is NOT being priced into the premiums, (for now). 

The XVI is the difference of 1-3 month forward pricing of ETO Options against the 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 of the underlying market.   

Black and White Technical Report: The Week Beginning 06/09/2021, FP Markets

Comments from last week: Volatilities can change very quickly on news items and trader sentiment. The tenant that states low volatility precedes high volatility also holds true. Although the past week showed a spike in volatility, the closing value has remained within the Bullish for equities window. As the closing price was higher than the previous week, traders will be on alert for potential higher values in the coming week.


Price structure:
The observation for the DXY shows a trading range developing between 91.66 and resistance of 93.18. Friday’s close at 92.07 is indicative of some short-term daily support, however the loss of momentum indicated in the Relative strength Indicator is suggesting further declines below this intermediate support level to further test 91.66.

Indicator:  Relative Strength 14
Relative Strength and bearish divergence is playing out with moves below the 50 level. Momentum is now negative. As the relative strength remains negative, further declines on this loss of pricing momentum could be expected.

Black and White Technical Report: The Week Beginning 06/09/2021, FP Markets

Comments from last week: The bullish view taken last week has failed. Last Monday’s large range reversal showed resistance developing along the “Neckline” of the Cup and handle pattern. 92.07 remains as support in any further declines.


Price structure: This commodity is news driven by supply -demand.
Last week the lower shadow of the price bar “retested” the $66.00 level with a close back towards the high of the week. The Outside period (OP) of two weeks ago is playing out as the low “marker” and key support following the a,b,c type price retracement.

A bullish signal can be derived from this price action; a retest of the $75.20 high is underway. This view will be negated on a daily close below the current key level of $66.0.  


Indicator: Relative Strength 14
RSI set a sharp reversal from the “30” level to reach 50, look for a further rise in this indicator as confirmation of the underlying Bullish view in the current price action.

Black and White Technical Report: The Week Beginning 06/09/2021, FP Markets

Comments from last week: Oil set an outside period reversal bar at the key support level among $61.80 following an a, b, c retracement. Next week the trend line will be redrawn as tentative. The expectation for a higher price is high as the key reversal bar is a large range bar closing on the highs and with no lower wick or shadow formed in the early part of the week. The closing price over $66.00 is a good signal for further gains in the coming days, this level will remain as short term price support and should be monitored as the key level to hold.

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Source - database | Page ID - 21411

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