The current health alerts around the world continue to play out on the precious metals markets to the detriment of other Commodities.
Late last week we saw the first sign in the Equities markets, that are technically over extended are now starting to factor in the possibility of slowing global growth.
WTI Oil holds an important support level, but remains vulnerable to further declines.
Last weeks “FO” Fake out, where price exceeds the previous “high but closes below that level is a short term bearish signal, the “retest” level of 6890 comes into play this week. The week also displays a short range week, showing a lack of Buyer interest.
While the Primary trend remains UP, the early signs of retracement are now showing.
The RSI remains over the key “50” level and has not entered an extreme level, however last week remained “flat” showing a loss of momentum.
MACD remains a buy signal, but can be slow to react in this time frame.
Comments from last week: 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.
Thursday’s “shooting star” and Friday’s close below Thursdays open shows rejection of higher prices. The interim daily price target for any retracement is 7050, this level must hold in the coming days. The underlying trend is UP on a daily basis.
Relative strength is looking to “set” a lower high from the January high as the Index has pushed to a new high, this divergence indicates a weakening upward momentum.
Comments from last week: 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.
S&P 500 WEEKLY
One week after the FO a new high with the market closing back in to the FO level last week. Look for a retest of 3210 in the coming weeks as buyer momentum slows.
The consistent rising wedge is now risk of breaking down as Relative Strength is again moving over the “70” level showing increasing price momentum, but has moved lower, again, this is Bearish Divergence.
Ultimately this market has a further technical target of 3600 for 2020.
Comments from last week: 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.
S&P 500 DAILY
Following the “evening star” last week the market pushed high, however the “collection” of short range days show a lack of buyer support, with Thursday and Friday showing the early signs of high price rejection.
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. The current position of the RSI is beginning to turn bearish as it heads towards the “50” level.
Comments from last week: 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.
Last week again saw a rejection of higher prices, the longer upper shadow shows as the price closes in the lower portion of the weekly price.
10870 remains the key level to hold in the coming weeks.
This important Index is at risk of breaking the 10500 January “higher low” with the potential for the Transports to enter a Primary down trend. This would constitute one half of the two signals ( the other is the DOW 30 ) required to call as an early bear market.
To remain a Bullish picture a close over 11150 is required to confirm the potential higher low marked.
Comments from last week: 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.
Last week’s large and significant price range is a very bullish signal for further gains within this primary UP trend. Look for a further target of $1750 as momentum remains very strong.
The Primary UP trend remains in place with $1610.90 now showing as the major support level to watch on any price weakness.
Relative strength has rolled back above “70” as this price makes a significant and important move higher. Although not a bearish signal this should be monitored to remain above the 50 level.
Comments from last week: 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 sets the tone for further gains.
In the shorter term “daily” view, Fridays move is very strong and may suggest short term exhaustion and profit taking may enter the market. The Primary trend remains up and any retracement would be shallow.
Trader would look for a daily reversal in the form of a lower daily close or a break off the previous daily low.
RSI continues to move higher from last week, reflecting the increase of positive price momentum.
Comments from last week: 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. However the current upturn in line with the Thursday / Friday move higher this is a good sign of further momentum gains.
While silver has moved strongly higher, the metals price has failed to extend past the FO high from early January. Friday’s rejection candle can only suggest some small consolidation on price is on the way.
$18.84 remains the important resistance level in the coming days, a price breakout over this level could set a $20.00 price target.
The breakout over $18.00 is an important milestone for price advancement.
Relative strength has turned higher above the 50 level and reflects last weeks Bullish breakout.
Comments from last week: 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”. With the potential for an upswing look for a breakout over $18.00 as the next key level.
AUSTRALIAN VOLATILITY INDEX
Current volatility levels, show a significant increase in forward volatility values, this is a Bearish sign the market has increased immediate near term risk to valuations. This is expected to move higher in the coming week.
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
Following the persistent strong move higher, the “pipe” reversal is a very strong indicator of high price rejection, the Buyers have set about taking profits with a potential retest of 98.45 underway.
This will place further pressure on Commodities price.
Relative strength is showing very turning momentum and has turned lower, this week will show a potential movement below the key 50 level on any further weakness.
Comments from last week: 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.
WTI CRUDE OIL
There is NO underlying primary trend in play and Oil remains dependent of Supply issues.
Last week’s follow through higher is “weak” and may be the early sign of a further Bearish flag pattern developing. Any price breakdown below the $50.60 support level would be very bearish in the coming weeks.
Comments from last week: 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.
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