Black and White Technical Report: The Week Beginning 13/12/2021

Last week a week of recovery from the initial Omicron detection. The Evergrande default has failed to impact the markets so-far, this news item may again inject the market with volatility. US Indices, remain well place to again push to new all-time highs in the run up to Christmas as does the Australian XJO. China import data shows no slow down for Coal and Iron Ore, the large resource suppliers BHP,RIO,FMG and OZL have steadied the sector and moved higher from good technical support levels.

XJO WEEKLY Price structure:

The bigger picture of the XJO index is one of continuing consolidation above 7200 and below 7530. Last week set a new Bullish pivot and confirms the 3 rd retest of this level since the June – July period 2021. With 3 significant low points the pattern is deemed complete, a breakout higher could be expected given the Relative strength Indicator has again turned positive.

Indicator: Relative strength 14: Relative strength has turned higher, as the reading is above the 50 level, the next move in the RSI will be telling should it move higher, this is a good position for further gains. The Relative strength Indicator reflects price momentum.

Comments from Last week: Last week commentary centred around the 7200 level. With price moving below this level and closing above shows the buyer support on price weakness. The small range between the open and close indicates the market remains in balance, this remains a solid signal for the markets to hold this level going into the Xmas period. Overall, the broader multi month sideways trading pattern remains a great concern, given the Lower High remains in place..

 

Last Wednesday’s FO bar has set a small retracement (as they do). The strong bullish days of last Tuesday and Wednesday has been met with limited selling with a retest of the 7350 level. A breakdown below the 7216 level would be a significant bearish signal, momentum remains to the upside.

Indicator: Relative strength 14:

The Relative strength Indicator (14) reflecting the underlying price momentum has moved sideways but above the key 50 level. Showing the downside momentum has eased, A continued movement over the 50 level would show a continuing positive change of momentum.

Indicator: VOLUME: Trading volumes have remained solid in the past week during this consolidating price structure, with Wednesday putting in a strong volume day.

Comments from Last week: Last Thursday set up a Fake out low (FO) and closed as a Bullish Hammer bar.
The daily level of 7216 remains the key level to close above in the coming week.
While the Index remains structurally weak with significant resistance overhead at 7370 and 7472, further consolidation along the current level may see these resistance levels challenged in the coming weeks.

 

S&P 500 WEEKLY Price structure:

The S&P 500 has set a Bullish pivot point, the large Weekly range is a strong signal for further gains this week. The next step is to trade above the recent OPd high, this would be a very Bullish signal for further gains.
The S&P remain within the definition of a Primary UP trend, without any evidence of a long term top developing.

Indicator: Relative strength Indicator 14.

The relative strength indicator has completed the Bearish divergence signal, the sell line at 60 has been met however failed to follow through. The current upswing is a positive outcome for the week. A reading below the key 50 level would signal further price weakness.

Comments from Last week: The Weekly chart shows a decisive movement down through the 4545 level on a large range week.
The S&P 500 remains within the confines of a Primary UP trend within a well-defined channel with a potential retest of the 4320 level underway. 4320 remains the price level to test in the coming week.

S&P 500 DAILY Price structure:

With the last Monday close above 4545 the S&P has pushed higher and looks set to again make new all-time highs. The OPd again marks the Daily swing point, the last three trading days have setup a small consolidation point. A breakout higher could be expected. Last week also set a new price Gap at the 4630 area, this level should be monitored should a retracement in price occur in the short term.

Indicator: Relative strength 14:
Relative strength Indicator (14) has turned higher from below the 50 level a signal of increasing price momentum. A further close below the 50 level would alert traders to failing price momentum with further downside.

NASDAQ DAILY Price structure:

Last week the Nasdaq did not perform in line with the S&P 500 following the recent a,b,c type decline with this Index consolidating above the 16200-level following last Tuesday’s Gap higher. The “tentative” trendline and 2 levels of support at 15700 and 15534 remain. Further consolidation may set up a bullish breakout over the 16550 level to test the upper price channel line.
The Nasdaq remains well within the definition of a Primary UP trend. A close below 15534 would change the underlying trend.

Indicator: Relative strength 14:

Relative strength indicator moving above the 50 level is a strong sign of improving price momentum, however the current reading swinging around the shows waning momentum and should be monitored for further weakness.

USD Spot GOLD – DAILY Price structure: No evidence of a Bull market.

Another week to add to the consolidation picture, this is not a Bull market with two definitive points of reference, resistance at $1788.0 and support at $1764.0 Last weeks OPu can offer evidence of a swing point in play, this would require a close above the $1788.0 resistance to confirm. Gold remains within a MAJOR sideway move with No Bullish price evidence. The key issue with this type of pattern is long term holders may sell and allocate fuds
elsewhere.

Indicator: Relative Strength 14:

Relative strength shows a reading below the 50 level and turning sideways to up as downside momentum continues to slow.

SILVER DAILY Price structure:

With the $22.50 level providing resistance, Silver is setting up to retest of the MAJOR support level of $21.60.
A retest of this $21.60 level may provide a double low scenario and see buying support. The Daily trend is Down inside this consolidation area below $24.90

Indicator: Relative strength 14:
Current Relative strength is moving below the 50 level and now at the 30 level shows price momentum failing. A further move below or along the 30 level would be very bearish in the short term.

AUD GOLD DAILY Price structure:

The current level to hold at $2477.0. This remains a positive outlook with the support level of $2477.00 developing from what was resistance during the May to September period.
With the $USD Gold price in consolidation the AUDXAU price is strongly affected by movement in the $AUD. This chart remains supportive to Australian Gold producers NCM,NST,SLR and others.

Indicator Relative strength 14:

Relative strength moving sideways has turned lower but remains just above the key 50 level shows a loss of positive momentum, this is typical with consolidation area’s.

COPPER DAILY Price structure:
With the news around China potentially moving into economic slowdown, Copper reflects this outlook with another consolidation week. The concern is the $4.330 level remains key going forward, with a potential retest of the $4.00 level underway. MIN,OZL and other producers will be responsive to this chart.

Indicator: Relative strength 14:

Current reading swing above and below the 50 level reflect the current consolidation underway. The key for now is the RSI remains above the 50 level as a reflection of ongoing and any positive underlying positive price momentum.

AUSTRALIAN VOLATILITY INDEX:
The week provided a wide range movement. With a reading remaining above the 13 level, forward risk is still demanding a premium. This reading remains news dependant, with Evergrande and Omicron driving readings.
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 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.

USD DOLLAR INDEX Price structure:
This secondary consolidation is developing into a continuation pennant with the 97.75 level remaining the ultimate target. This outcome would place pressure on the $AUD, providing support for local Gold producers and the Commodities sector in general.

Indicator: Relative strength 14:

The Relative strength has turned lower in line with price movements and slowing momentum. And has the potential to move lower on further price weakness while remaining above the 50 level.

Comments from Last week: The $USD continues to build a strong UP trend, last weeks test and reject of the 95.70 level within this consolidation area is a bullish signal for further gains. A close below the 95.70 level would signal a short-term top is in, and a retest of 94.70 possible, however the underlying UP trend is prevailing.

WTI CRUDE OIL, Price structure: This commodity is news driven by supply -demand.
With e $61.80 level ($62.0) again tested, the WTI contract set a 3 Bar reversal setup on Friday close for the week. The expectation would be for further follow through higher in the coming week to test $75.20. The WTI contract remains within the definition of a Primary UP trend.

Indicator: Relative strength 14:

Relative strength Indicator turning higher as last week shows a reversal bar from the close of 2 weeks ago. This is the area to now monitor for a Bullish divergence signal to develop over the coming weeks.