Black and White Technical Report: The Week Beginning 11/10/2021

Major Indices’ have made small reversals higher in the past week, however the road to higher values is going to be met with several resistance levels. The strongest of the majors is the XJO, showing a solid reversal last week.

Historically October is a bullish month and there is no evidence to suggest otherwise for this October.

The China Evergrande debt saga is not over, and further news may adversely move the markets, in particular the threat of contagion to other credit providers in the real estate sector. 

Fun fact, most Stock market downturns have been preceded by a liquidity event in the Realestate markets. 

Gold and Silver have not followed through from last week’s bullish reversal bars, more consolidation looks to be the outcome for the coming week. Both are highly tradable in the current ranges.

Oil again closed at a 2 year high, energy equities and futures should offer some great trading this week.


Price structure:
An inside range (Ipu) puts the market in balance. What’s to notice is, the historical level around 7197 has provided price support. The conclusion is the market is providing good technical support at this 10% retracement from the high level.

In the coming week the closing price on either side of the Ipu will give some insight into further gains (or losses) in this market, following the completion of the a, b, c retracement.

Stock should be analysed individually, the better performers last week remained in the Energy and Financials space.

The underlying primary trend remains UP.


Indicator: Relative Strength 14
Relative Strength has turned positive, as the reading is above the 50 level (just) the next move in the RSI will be telling for overall market strength or weakness.

The RSI should be monitored for a continued move above the key level of 50 to show a continuing shift to bullish price momentum. 

      Black and White Technical Report: The Week Beginning 11/10/2021, FP Markets

Comments from last week:  The decline last week has shown an outside period down close (OPd). The a, b, c labels have been reapplied as this retracement takes place. What should have been a bullish week off the Hammer bar 2 weeks ago has closed on the 7197-support level. 6900 remains as the next key support should price decline further. However, the OPd is often the selling “flush” required to mark the low area. This week 7197 will be the key level to close above to give insight to a potentially bullish October the bear killer. 
Underlying primary trend remains UP.


Price structure:
The past week has seen the market churn out a low-price area; the giveaway is in the Relative strength indicator 14 (see below). Last Thursday’s IP followed by Friday’s breakout gave an indication of a test of 7370 underway. 

Friday’s high close should lead to a positive opening for this week.

The bigger picture risk is the Index fails to take out the higher resistance levels of 7530 and 7632, if this longer-term (many months) scenario plays out the whole price picture from June 2021 onward may be a very broad topping pattern. 

So while a rally in October may occur, the current resistance levels should be monitored in the coming days and weeks.


Indicator:  Relative Strength 14
Divergence can be seen with the RSI setting higher lows against the underlying price making new closing lows last Tuesday / Wednesday. Daily price momentum is still regarded as negative; however the overall declines are becoming weaker as the RSI moves toward the key 50 level.

Black and White Technical Report: The Week Beginning 11/10/2021, FP Markets

Comments from last week: Thursday saw the close of the quarter finish 19 points higher. With Friday closing to a new low. As with the Weekly, Friday finished with an OPd, potentially marking the low. This closing price level has met the highs of Q1 2020 this is an important level for the Bulls to defend in the coming days. Price failing to set a new low on Friday gives the market a cautionary buy bias for the next 2 days. Trading volumes are relatively high compared to previous months. With price volatility so high, the observation of price churn would apply. This type of price action is often found in both Top and basing patterns. Last Friday’s OPd was completed on less volume than the Wednesday decline.


Price structure:
Support is building above 4240 and 4320 with the market finding buyers in this area. Last week’s bar showed some indecision with a closing price well off the high. The underlying Primary trend for the S&P 500 is UP and there is no evidence of a reversal top in place. The price movement outside of the longer-term rising wedge has not met with any committed selling as the Weekly price ranges high to low remain in sync with past ranges.

Further consolidation may take place in the coming week. A weekly close below 4320 could be the warning for weaker prices in the coming weeks, but at this juncture the market remains bullish.


Indicator:  Relative Strength Indicator 14
Relative Strength has again remained below the 70 level, in line with the underlying price decline. The Sell line is shown around the 65 level; this has now been reached. With the Indicator turning higher last week, this should be monitored for further rises.

Black and White Technical Report: The Week Beginning 11/10/2021, FP Markets

Comments from last week: The Weekly Candle structure for the S&P 500 is developing a series of lower shadows, indicating buying at a low price. The important observation is the closing price is well off the low price set mid-week. The support range of 4240 to 4320 has held so far. A closing price below these levels would alert traders to the potential retest of 4050 in the coming weeks. However, the technical bias is bullish off current support levels.


Price structure:
With the late week rises of price, the a, b, c retracement pattern looks to be complete. The Gap open on Thursday is concerning as this often leads to some selling as quick profits are realised. The longer term trendline is the resistance point into the close of last week as is the higher 4444 level of past resistance.


Indicator: Relative Strength 14
The RSI failing to cross the 50 level is a concern for current positive momentum. Traders will now monitor the RSI for a movement above the 50 level to confirm any Bullish price action.

Black and White Technical Report: The Week Beginning 11/10/2021, FP Markets

Comments from last week:  Another tentative trendline broken, highlighting support and resistance “levels” are more important. The daily price has retested the 3 bar low price of 4305, last Friday’s engulfing high close offers the buyers further opportunity to retest the 4444 level. Should a daily close occur below 4300 the next key level for support is 4240. The Relative Strength has set a higher low (so far) as price closed lower last Thursday. There is potentially a bullish divergence Buy signal developing.


Price structure:
As with the S & P, the a, b, c retracement pattern is deemed complete with the price moving higher following last Monday’s swing low point. In the short-term, last Friday has set a bearish pivot reversal point off the extended trendline for a potential retest of 14535 support. The Nasdaq may be building support over the 14535 level, and as with the other Indices’ this may be viewed as a major top pattern building from the early July period to now.

Indicator: Relative Strength 14
Relative Strength has made a new low in line with the current price decline. The up turn from Friday’s bullish hammer may be an early change in price momentum. This should not be monitored for a close above the 50 level in line with further price gains.

Black and White Technical Report: The Week Beginning 11/10/2021, FP Markets

Comments from last week: The long term trendline is now broken along with the key support level of 14765. Last Friday’s Bullish hammer bar gives the Index potential for retesting the trendline in the coming day. Traders would look for a continuing close above 14765 as a bullish signal. Should further price weakness occur below 14535 the index would look to the 14073 level, this would be the retest of the initial breakout in June 2021.


USD Spot GOLD – DAILY     
Price structure: No evidence of a Bull market.
There is NO Bull market in Gold.

The failure of the metal to follow through higher from the impulsive range is concerning as the $1764.30 level remains as the major resistance level to cover.

Last Friday’s Fake out (FO) is also a shooting star candle and has the potential to retest the $1725.0 level and the long term Weekly trendline in the coming days.

Indicator:  Relative Strength 14
The Relative Strength moving below the 50 level is heading back to the 50 level, a signal of increasing price momentum with the sharp move higher and should again be monitored for a further move higher above the 50 level. The fact that it has failed is concerning for the bulls. 

Black and White Technical Report: The Week Beginning 11/10/2021, FP Markets

Comments from last week:  Following the September price decline, last Thursday saw Gold set an impulsive range bar followed by the inside range of Friday, indicating the market has moved to become balanced. The $1764.30 level once again shows its importance, this time as resistance. Historically Gold follows through higher following an impulsive range bar. A close over the $1764.30 level will give some insight to a potential move higher in the coming days and weeks.


Price structure:
As with Gold, Silver has failed to follow through higher last week, essentially trading sideways from the swing point low at $21.60. Silver remains in a Primary downtrend and there is no evidence of a base being formed as the launch place for an UP trend to take hold. Last Friday set a shooting star candle/bar under the downtrend line, $22.50 needs to hold in the coming week, a close below this level would give a strong bear continuation signal.


Indicator:  Relative Strength 14
Current Relative Strength is now viewed as potentially bullish, as the reading approaches the 50 level. The reading has had only one trip over the 50 level in the past 4 months.

Black and White Technical Report: The Week Beginning 11/10/2021, FP Markets

Comments from last week: Silver has traded down to meet an important level of $21.60. The short term level of $22.50 may provide some resistance in the coming days. A strong close over this level would set a challenge to the downtrend line. Silver remains in a Primary downtrend, however short term momentum appears to be changing for the buyer to enter the market.


Price structure:
More consolidation with the current daily bars building a bullish flag, the AUDXAU remains within a large trading range from 2326.00 to 2477.0. Traders of Australian Gold equities would look for a solid close over the $2477.0 level as a very strong signal for further gains.


Indicator: Relative Strength 14
Relative Strength moving back below the 50 level is in line with price movements. Price momentum has again turned flat to negative, a further rise in price will see the RSI move over the important 50 level.

Black and White Technical Report: The Week Beginning 11/10/2021, FP Markets
Comments from last week: 
The AUD Gold price remains the key support for local producers NCM, NST, EVN and SLR along with the juniors. This current consolidation in price with last Thursday’s up swing is a bullish signal for further gains.

Price structure:
The support level at $4.00 has held its price for the past 3 months, currently the resistance level remains at the Midpoint range of $4.33. The a, b, c retracement pattern is complete, the low at “c” and the $4.00 support will remain the level to hold in any further price weakness. The lower shadows of each week indicate support at lower levels. A daily close over the $4.33 level should be monitored for further gains.


Indicator: Relative Strength 14
The RSI has turned flat but is at risk of again crossing below the 50 level as upward momentum slows. This current reading is only reflective of the underlying consolidation in price.

Black and White Technical Report: The Week Beginning 11/10/2021, FP Markets

Comments from last week: Copper continues to retest the $4.00 level in what should have been a bullish week following the Hammer retest bar. The price chart remains in consolidation above the $4.00 level with solid resistance shown again at 44.33. This may take months to resolve, and off traders short term trading opportunities both long and short. The shadow of higher inflation globally weighs on the price of copper.


Volatility has settled lower following the news of the Chinese Evergrande potential default.

The end reading remains elevated and will bring some pressure onto equities.

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 11/10/2021, FP Markets

Comments from last week: The XVI is now reading a high volatility value above the key 13 level. This may place downward pressure on equities. This week look for a lower reading as further support for a Bullish October.

Price structure:
The push higher continues with last week’s breakout from the Bullish flag pattern. The breakout has not immediately followed thru higher and further consolidation may occur. The underlying Primary trend is UP. US 10 year yields have also climbed higher to finish at 1.61%.


Indicator:  Relative Strength 14
The Relative Strength has decisively crossed the 50 level to turn bullish and moved over the 70-level indicating strong price momentum. This is a very good indicator of strong bullish momentum underway; the final downturn is in response to the formation of the building bullish price flag.

Black and White Technical Report: The Week Beginning 11/10/2021, FP Markets

Comments from last week: The USD remains in a Bull market confirmed again with the breakout over the 93.45 level. Current price structure is building a bullish flag pattern for a strike at 94.70. This will place pressure on currency crosses EUR, AUD. Good for Australian Gold producers and Iron Ore producers.


Price structure:  This commodity is news driven by supply -demand.
Last finished with a large range bar with a high range of $81.11. The solid close above the $75.20 is an important event for the Bulls. There are no further significant resistance points until the $100 level.


Indicator: Relative Strength 14
RSI set a sharp reversal to move over the 50 level, look for a further rise in this indicator as the current reading moves over the 70 level as confirmation of the underlying Bullish momentum in the current price action.

Black and White Technical Report: The Week Beginning 11/10/2021, FP Markets
Comments from last week
: WTI continues to grind higher with an important closing price above $75.20. Traders would look for a retest and hold of the $75.20 level as a sign of price strength. WTI Oil has closed at a 2 year high as the Primary UP trend continues to develop with the $100 level as the long term target.

Start Trading
in Minutes

bullet Access 10,000+ financial instruments
bullet Auto open & close positions
bullet News & economic calendar
bullet Technical indicators & charts
bullet Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.

Source - cache | Page ID - 21426

Get instant Updates in Telegram