Black and White Technical Report: The Week Beginning 15/11/2021

From an early sell down to late recovery, the Major indices may have completed a small retracement.

Bull markets tend to grind higher with continued liquidity in the background, none of the major Indices show any significant reversal patterns coming into what can be a bullish cycle for the end of the year.

Gold and Silver have posted significant price movements higher from the August – September lows, but both remain inside multi quarter consolidation ranges.

Several important resistance levels have been broken in this current rally that looks set to continue. 

 

XJO WEEKLY    
Price structure:
The 7530-midpoint level set 14 week ago remains the key resistance level to trade and close over for the Index to again be declared bullish. Continued consolidation below this level may set up a bearish retest of the 7197 -7200 level again. While the Index remains within the confines of a Primary UP trend, a closing breakdown below 7200 would shake the buyers with a bear trend declared.

Last week’s “inside” Hammer bar shows the market in balance, the break on either side should be decisive for the coming weeks.

 

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 below the 50 level. For overall market strength or weakness. The Relative Strength Indicator reflects price momentum.

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

Black and White Technical Report: The Week Beginning 15/11/2021, FP Markets
Comments from last week: The XJO has set an OPu (outside period up close). This type of 1 week price movement can show a high or low after an extended move. The past 5 weeks cannot be described as an extended move, so the potential for further upside remains the current view. A weekly close over the 7530 would give a very strong signal for the price target of 7715 to be met. Currently the underlying primary trend remains UP, but at risk of changing to Down at a price movement below 7180.

 

 

XJO DAILY  
Price structure:
The Pivot point set above 7370 shows a bullish reversal, however 7472 remains the short-term Daily resistance. While the Index remains within the current trading range from 7216 to 7632, the pattern remains consistent with a “broad top” pattern developing. For the markets to stage a positive breakout higher strong price movement will be required in the heavily weighted Banks along with BHP, RIO, CSL and WES.


Indicator: Relative Strength 14
The RSI has again retested the 50 level and moved sharply higher again. In the short term a continued move above this key level should be expected with price moving over the 7472 level.

 

Indicator: VOLUME
Trading volumes have remained benign on the rising price structure; this is not a great long-term signal for the Bullish.

Black and White Technical Report: The Week Beginning 15/11/2021, FP Markets

Comments from last week:  Last Tuesday OPd has set the low, with the bigger picture showing a HL (higher low) however the developing resistance at 7472 is the key level to break and “close over” on this daily observation. This current move is important for the bullish to negate the potential for a much broader top developing. Last Friday set a FO (fake out) as price breaks higher above a previous rejection level and rejects again, a short 1 to 2 day pull back could be expected. The Daily chart has set the higher low with the Thursday / Friday follow on working higher on low trading volumes, this remains positive for further gains.

 

S&P 500 WEEKLY
Price structure:
The S&P Weekly inside period down close (IPd) shows the market in balance around the 4700-point level. A break to the lower side targets the 4545 Resistance/ Support level. There is NO indication of a top in place or even one developing as the market again pushes this all-time high area. This type of price action can remain bullish as the inside period has a lower shadow indicating late week buying.


Indicator:  Relative Strength Indicator 14
A signal of decreasing momentum as the Relative Strength Indicator (14) turns sideways as the calculation takes in last week closing below the closing price of the week prior. The Relative Strength Indicator remains in a good place for further strength, a continued movement over the 70 level would indicate strong price momentum. Historically the indicator can remain over the 70 level for an extended period of time as seen during July – September. 

Black and White Technical Report: The Week Beginning 15/11/2021, FP Markets
Comments from last week: Four weeks of solid gains is starting to ring alarm bells as the market rarely moves in this type of extended move without some form of retest to confirm support. This remains a very strong Primary UP trend with any signals of reversal or topping pattern developing. The range of last week is longer than the previous week showing strong buying. When selling enters the market the first support level remains at 4545 points to hold.

S&P 500 DAILY
Price structure:
Within the daily price structure, the closing price support at 4650 will be the key area this week. Tuesday, Wednesday, Thursday have set up a bullish 3 bar reversal pattern confirmed on Fridays close. Although the Index has put in a very strong price move from the 4400 level a further leg higher is possible.

 

Indicator: Relative Strength 14
Relative Strength Indicator (14) has turned lower from the 70 level a signal of slowing price momentum, a further movement higher over 70 would indicate further strong price momentum and may be viewed as over-brought and potentially offer a bearish divergence sell signal should price move lower. A further close below the 70 level would alert traders to failing upward price momentum.

Black and White Technical Report: The Week Beginning 15/11/2021, FP Markets

Comments from last week:  An extended almost vertical price movement has set a “Gap open” often an exhaustion Gap following a strong price move. A high probability turning point may be in play, confirmation will show on Today should a “gap down” occur, the “evening star” will be set. This type of price pattern has led to many significant reversals, an observation of this was made in early September 2020 and mid-September 2018. However many reversals in the S & P 500 have occurred following an exhaustion Gap higher following an extended price move.

NASDAQ DAILY
Price structure:
During April 2021 (circled) the Nasdaq showed a gap open following a strong price rally, late June showed the same pattern as did late August. Last week the Gap open was identified as a bearish signal. Historically the Nasdaq shows consolidation following this type of price event. The rising 20 period moving average set in the Bollinger band would be the first level of support.

 

Indicator: Relative Strength 14
Relative Strength Indicator moving over the 70 level is a strong sign of improving price momentum, with the 70 level and higher a possibility and an indication of strong price momentum leading to an exhaustion. 

Black and White Technical Report: The Week Beginning 15/11/2021, FP Markets
Comments from last week
: With the Bollinger Band overlay, the major “Gap open” movements have been marked. These have occurred with price moving outside of the upper band, often followed through with a retest of the 20-period average within the bands, or the lower the Bollinger Band in more severe retracements, April 2021 is an example. The observation for this week is price has made an extended move above the 20-period average, historically a signal of caution with a potential retest of the breakout at the 15700 level or lower.

 

USD Spot GOLD – DAILY     
Price structure: No evidence of a Bull market
Could this be the early stage of the breakout rally? Possibly is the best answer with the $1834 resistance level easily breached with a large range day. The all time high of $1916.4 is the next resistance level. The Daily chart has now entered an UP trend from the HL point identified last week. Gold has staged strong price rallies in the past only to fail on profit taking.

( A 10% price move in Gold would set the metal at a new all-time high of $2052.60)


Indicator: Relative Strength 14
Relative Strength Indicator 14 moving over the 70 level, a signal of increasing price momentum with the sharp move higher and should again be monitored for a further move higher. 

Black and White Technical Report: The Week Beginning 15/11/2021, FP Markets
Comments from last week: 
Gold has made 2 impulsive movements last Thursday and Friday to close above the key $1800 level. This is a very Bullish signal for a retest of $1834 the next major resistance level. Gold has set a 2nd HL (higher low), a very strong signal for the long-expected move to retest the $1900 level is underway. Traders should monitor the $1834.0 level for consolidation in the coming days. The Relative strength has recovered and is moving above the 50 level potentially heading back to the 70 level.

 

SILVER DAILY    
Price structure:
The inverse Head and Shoulder pattern within the Daily chart offers a target of $28.0 or a 10% price move, with the resistance level of $24.90 broken and retested on Friday, further upside would be expected should the metal close over the $25.52 level. Silver remains within a much broader consolidation range above $21.60 and below $30.30.

( A 10% price move in Gold would set the metal at a new all-time high of $2052.60)

 

Indicator: Relative Strength 14
Current Relative Strength is moving over the key 50 level, towards the 70 level, a very good signal for further momentum gains in price. A move below the 50 level would be very bearish in the short term. 

Black and White Technical Report: The Week Beginning 15/11/2021, FP Markets
Comments from last week: Silver has seen a “hammer” retest of the $23.00 level with an immediate follow through higher out of the Bullish Flag pattern, this sets up a retest of the $24.90 level in the coming days. Two price tests have taken place at this level. A break of the $24.90 level would put Silver back into a Primary UP trend and show the hammer bar as the “higher low” point.

 

AUD GOLD DAILY    
Price structure:
Last week continued the strong price movement higher for Gold in $AUD terms. This is a great outcome for the local producers. Following strong price movements, consolidation can occur, this should be monitored above the $2541.0 level as a very bullish signal for further gains. Look for continued support at this $2541 level, with the next big resistance level of $2712 the longer-term target.


Indicator Relative Strength 14
Relative Strength moving strongly back above the 50 level and now the 70 level is in line with strong price movements. Price momentum has again turned positive, a further rise in price will see the RSI remain above the important 70 level.

Black and White Technical Report: The Week Beginning 15/11/2021, FP Markets

Comments from last week:  Finally, a breakout in the AUD Gold chart, a very strong signal for the local miners with many also making strong price moves. (SLR and NST) The underlying ($USD GOLD ) is showing a very strong price move higher, with a weaker $AUD the AUD Gold chart may continue to retest the 2541.0 level. Internally the $2400 level is a strong psychological level to hold in the coming days.

COPPER DAILY   
Price structure:
Last week Copper set a very Bullish pivot at a MAJOR support level, this again sets up a potential retest of the high of $4.80. The underlying trend in Copper remains UP. The consolidation area has 3 major low points 1, 2, 3 shown, without a price break below (3) the pattern may be deemed complete, prior to a bullish breakout.

 

Indicator: Relative Strength 14
Following the sharp turn lower in the RSI a reflection of the sharp price movement. Current readings are not a good signal for further immediate momentum gains. The key for now is the RSI remains above the 50 level as a reflection of ongoing and any positive underlying price momentum.

Black and White Technical Report: The Week Beginning 15/11/2021, FP Markets
Comments from last week: 
Another retest of the $4.33 level in copper shows a small range bar indicating the market is in balance at this level. Market in balance will lead to a directional price move in the coming weeks. For the bigger picture the move this week in Dr Copper may dictate the overall sentiment toward Global growth in the coming months. A close lower today would indicate a further retest of the $4.0 level underway, however a movement higher would send a strong signal to the bears this is the higher low point in place.

 

AUSTRALIAN VOLATILITY INDEX
The price of forward insurance ( PUT options ) has declined, with the weeks reading remaining in the Bullish zone between 11.0 and 13.0.

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 to the underlying market.   

Black and White Technical Report: The Week Beginning 15/11/2021, FP Markets

Comments from last week: Currently reflecting the underlying bullishness in the Australian equities market, the current reading would infer further gains as the forward price of  buying risk cover is no longer in demand.

 

USD DOLLAR INDEX  
Price structure:
Last week the DXY traded above the major level of 94.70. The broad base from August 2020 is complete. Look for price consolidation around this level as a bullish signal for further gains. A strong close below this level may see the 93.45 level retested, however following the strong impulsive price movement on Wednesday, further gains should be expected.

 

Indicator:  Relative Strength 14
The Relative Strength has turned higher in line with price movements and momentum. And has the potential to move higher on further price strength while above the 50 level.

Black and White Technical Report: The Week Beginning 15/11/2021, FP Markets
Comments from last week: 
The USD Index again set a FO (fake out) as price moved past the previous high point set early October to close inside this level. This is a picture of consolidation and will also show in the associated FX cross. The $AUD currently displays a “hammer bar” in the daily chart, suggesting the low has been set in line with this DXY showing rejection of high prices towards 94.70.

 

WTI CRUDE OIL
Price structure:  This commodity is news driven by supply -demand.
The Weekly Flag pattern continues to develop with the $75.20 support level and current Trendline holding. WTI remains within a Primary UP trend with the $107.13 target in place. Should a strong close below the important $75.20 level occur the resolve of the Buyers may be shaken in the short term, however the primary trend will remain in place.


Indicator: Relative Strength 14
RSI has set a sharp reversal to move below the 70 level. Close inspection shows the indicator “rolling” sideways putting the longs on alert of slowing momentum, this is a typical type of movement as retracement flag patterns occur.

Black and White Technical Report: The Week Beginning 15/11/2021, FP Markets
Comments from last week: This is a strong chart with a flag pattern developing at the current trendline, price is trapped between resistance at $84.25 and current support of $75.20. The Primary trend remains UP as the WTI moves higher away from the multi years consolidation zone. This remains a VERY bullish picture for further gains. Oil $100.




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