The major US Indices continue to test all time highs along with highs in the Dollar Index with the background of a potential Global health meltdown and the impact this would have in the commodities space.
Gold begins a new breakout with Silver continuing to hold key Support levels.
WTI Crude Oil remains under pressure at a major support level, although downside momentum is reversing the risk remains for a significant further decline.
The current Weekly chart of the XJO displays a Bull Flag breakout, 7300 remains the target. Within the Index Financials have become the driver of the Index value.
Further gains are expected in the coming week following the current high close in the range of last week.
The RSI remains over the key “50” level and has not entered an extreme level.
MACD remains a buy signal, but can be slow to react in this time frame.
Comments from last week: Last week’s low saw the retest of the 6890 completed, with a high close in the range.
7300 remains the preferred target within this primary UP Trend. The current breakout structure remains bullish.
The breakout over 7050 is a good sign for further gains. Thursday put in “Fake out sell” day followed by Fridays “inside day”.
This has the potential to retest 7050 on any follow on weakness in the coming days.
Relative strength has moved over the “50” level but has the potential to set a lower high from the January high as the Index has pushed to a new high, this divergence shows a loss of upside and slowing momentum.
Comments from last week: Monday’s retest of the 6890 followed with the Inside period has set the low with the follow on price rally higher. 7050 has now set up as the resistance level with Fridays rejection at this level. Trading volumes remain quite strong suggesting accumulation rather than distribution. However to give an immediate continuation signal, a close over 7050 is required this week.
S&P 500 WEEKLY
The S&P has defied all of the potential reversal signals and remains very Bullish for further gains.
Last weeks high close in the range suggest further gains in the coming week.
Underlying Primary trend remains UP.
Relative strength is again moving over the “70” level showing increasing price momentum, but keep in mind this is historical information.
This market has a further technical target of 3600 for 2020.
Comments from last week: The S&P has posted a strong range, but the “close of the week” remained inside the previous high. This “Fake out” move can be a rejection signal.
With the Primary UP trend in place and last weeks strong range further gains could be expected.
S&P 500 DAILY
The failed evening star reversal pattern highlights the Bullishness of this Market.
The current small range days show a loss of momentum, with the market at risk of putting in a retest of 3210.
Relative strength has again rolled lower as momentum slows, but remains above the 50 level.
Relative strength is an important indicator displaying price momentum, this chart now displays a diverging indicator to the rising price. This is ultimately a bearish signal.
Comments from last week: An “evening star” formation, gives a high potential signal for a Gap down to occur at the open of the next trading session. Traders would look for a retest of the 3210 level in the coming days. A breakout over the evening start high would be very bullish for further gains.
The Transport are NOT confirming the Major Indices’ as price consolidates at the 10870 level.
This is an important confirmation tool for the underlying health of the market.
This market needs to close over 11150 to confirm the Bull Market.
To remain a Bullish picture a close over 11150 is required to confirm the potential higher low marked.
Comments from last week: Last week’s “Inside period” a sign of indecision remains below the 11,000 point breakout level of 3 weeks ago. 10870 has developed as the new resistance level to any immediate gains. A further breakdown below 10500 would be a very bearish signal.
The current Bear flag remains at risk of failing as a breakout to test the $1610.90 resistance level remains imminent.
A bullish high close for the week now setd the tone for further gains.
The Primary UP trend remains in place with $1517 remaining as the major support level to watch on any further weakness.
Relative strength has rolled back above “70” as this price consolidation takes place around the $1560.00 $1575.00. Although not a bearish signal this should be monitored to remain above the 50 level.
Comments from last week: Gold remains the most crowded trade in the markets. Last week’s Bear flag failure with the lower shadow, has the potential to follow through into the retest of the $1610.90 level.
The intra week support at $1565 and breakout higher shows the underlying price strength as buyers come into the market. $1610.90 remains the ideal target in the coming week.
RSI continues to trend lower showing a loss of momentum. However, the current up turn in line with the Thursday / Friday move higher this is a good sign of further momentum gains.
Comments from last week: The Daily chart again shows the “over lapping” price action as a potential bearish price structure. Should a breakdown in price occur below $1540, it place’s the next target of $1517.00 in play. This type of consolidation can last many weeks before a breakout takes place.
Silver has not confirmed the underlying movement in Gold some traders consider this an important observation.
The daily silver chart does show a small breakout from the current descending pattern. This will need to be confirmed in the coming day to give this metal a Bullish “feel”.
This market remains within a significant consolidation phase.
Relative strength has “flattened” at the 50 level, with the potential for an upswing look for a breakout over $18.00 as the next key level.
Comments from last week: The daily chart of Silver has remained in consolidation with $17.76 remaining the key support – resistance level as Fridays “inside period” shows indecision.
AUSTRALIAN VOLATILITY INDEX
Current volatility levels, show a significant decrease in forward volatility values, this is a Bullish sign the market has decreased immediate near termrisk to valuations. This is expected to move lower in the coming weeks.
The XVI is the difference of 1 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.
An XVI over “13” is generally bearish for equities.
USD INDEX DAILY
Continuing to push higher, a good sign for the US economy. A bad sign for other currencies.
Follow on from the breakout is very strong as price closes towards the high of each trading day.
Relative strength is showing very strong momentum as it confirms the high in the underlying price.
Comments from last week:The completed “pipe” reversal on Monday has set the price movement higher with the very Bullish breakout over 98.45 resistance taking place. In the short term a retest of this key level will give an insight into the strength of the breakout. The USD Index has entered a Primary UP Trend. Relative strength continues to move higher inline with the current strong momentum.
WTI CRUDE OIL
Oil bulls have the support signal for further gains with the engulfing reversal at the %50.60 support level.
WTI remains within the 12 month trading range of $50.60 to $61.80.
Traders would look for a close below this $50.60 level, to suggest the $42 historical support will come into play.
The is NO underlying primary trend in play and Oil remains dependent of Supply issues.
Comments from last week: With a short range week at the key support level of $50.60, suggests support at this level. The Relative strength Indicator has slowed below the 30 level indicating a degree of exhaustion of momentum.
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