Black and White Technical Report: The Week Beginning 30/08/2021

Another week that was going to be the beginning of a corrective phase has ended on the highs.

With the mid-week retracement, the underlying Primary trend has remained “UP” for the major indices. This week’s Indices’. price movement will be monitored for a potential move higher

There seems like the never-ending bull market, but as technical traders the emphasis is on finding and exploiting price patterns followed by directional price momentum, not picking the next bear or bull market.

Gold and Silver have shown significant reversal price bars last Friday and follow through higher is now expected.

Gold and Silver stocks may be bid this week.

WTI Oil has successfully tested the $61.80 level as part of an a, b, c type retracement, now with a key reversal bar on Friday night.

Price structure:
Last week saw the Index retest the trendline after finding 7530 resistance being the “midpoint” of the previous week’s range.  A close of the resistance at 7530 would signal a further longer term move higher to test the price target shown at 7715 and potential meet the 8000 point mark. The small range last week shows indecision, also with the close midway of the range. A breakdown lower would see the 7197 level at the potential target. How-ever the Primary trend remains UP, so the favoured view would be a move higher on current positive market sentiment.

+ WES, WOW, FMG, BHP, Banks.  


Indicator: Relative Strength 14
RSI has remained, below the 70 level after negating the potential momentum divergence signal. The RSI should be monitored for a continued move below the key level of 70 to show a shift lower in price momentum. 

Black and White Technical Report: The Week Beginning 30/08/2021, FP Markets

Comments from last week:  As broad observation the Index is back in line to the 2018 advancement line, following the sharp corrective movement during Q1 2020. Last week’s Australian SPI futures close suggest a strong opening today, the observation of the “pivot point” carries less weight as the underlying Primary trend is UP.


Price structure:
The 7530 level is better highlighted in this Daily chart. The 3 bar triangle of 2 weeks ago has held the price action above 7400. Last Fridays hammer bar is a positive for further gains in the coming days.

A daily close over 7530 would be very positive for an initial retest of the 7632 highs and potentially higher.

The 7530 may provide further resistance and be seen as a lower high on any price failure at these levels. Next lower support level of 7400 – 7430 will be viewed as the key levels to hold should markets lose the positive sentiment. 


Indicator:  Relative Strength 14
The Relative Strength Indicator 14 shows the decrease of upward price momentum, most times this indicator shows the obvious, and in this case the observation is the turning sideways below the 50 level as would be expected during a consolidation price range. 


Indicator: VOLUME
High volumes into the close of the week suggest further accumulation as Friday’s price range found support and close towards the high.  (Hammer)

Black and White Technical Report: The Week Beginning 30/08/2021, FP Markets

Comments from last week:  Last week the Bearish wedge pattern played out into the short price decline. The low of 7429 has tested the breakout bar set on the 02/08/2021. 

The most important observation in this daily chart is last Fridays range inside of Wednesday and Thursday, setting up a 3 Bar reversal pattern. The line of commitment for the Bullish is the intraday support now set at 7430.

Price structure:
The outside range of two weeks ago has been disregarded as a potential turning point in the S&P 500 market with a new highs set into last end of week close.

The long bearish “wedge” pattern remains intact.

Given current price momentum a breakout higher could be expected, but major support is shown at 4320 and a break lower than this level would be give a Bear signal.


Indicator:  Relative Strength Indicator 14
Observation, the Relative Strength Indicator first moved over the “70” level in April this year. 

Currently the Relative Strength Indicator has re-emerged and remains as a developing divergence sell signal. The Sell line is shown around the 65 level. It can also be observed the RSI can track sideways over the “70” level as price consolidation take place.

Black and White Technical Report: The Week Beginning 30/08/2021, FP Markets

Comments from last week: Last week’s OP (outside period) has the potential to mark the high price prior to a downturn. This type of Weekly range has shown many times without follow through lower, however traders should remain vigilant for potential reversal signals in this persistent UP trend. The support level shown at 4320 remains the first level to test in a retracement move.

Price structure:
Last Thursday provided a small reversal pivot with Friday negating the pattern and closing on the highs of the week. The large range bar indicate some follow through may occur in the coming days. First level of support is shown at 4460 (-40 points) during this week that level will become critical to hold as price action develops. Key DAILY support for the S&P 500 is shown at 4367.


Indicator: Relative Strength 14
The RSI move below the 70 level would show slowing momentum, however the upturn in response to the pivot reversal is a good indicator of continued positive momentum, a move below the 50 level would indicate a loss of price momentum and would be viewed as a signal to retest the support level at 4394 – 4367 .

Black and White Technical Report: The Week Beginning 30/08/2021, FP Markets

Comments from last week:  The Trendline has been repositioned as “tentative” following last week’s short breakdown. Last Friday has set the Bullish pivot point reversal to close over 4432. The expectation would be for follow thru to new all-time highs above 4480 in the coming days. This is an important level for the buyers to take out for the market to remain Bullish.

The new intraday support is now 4367 and will be the decisive level to hold in the coming days.


Price structure: This Index is the most concerning for traders
Last Monday’s breakout over 15184 has been the key observation in this Daily chart with the following price action holding this important level. In the coming week this will be the key level to hold, however the price action remains very positive for further gains.

Indicator: Relative Strength 14
The Relative Strength Indicator has turned higher last week setting a higher low. An overall BEARISH divergence remains in place. The clear picture mentioned last week was the Index must take out the recent highs with an upturn in the RSI value and remain above 50, this has been confirmed last week.

Black and White Technical Report: The Week Beginning 30/08/2021, FP Markets

Comments from last week: In line with the S&P the Nasdaq has set a bullish Pivot point reversal with 15184 remaining the key resistance level to test. In a broader view the Index remains within a trading range of 14765 support and 15184 resistance. The new “tentative” trendline is now in place and will remain the first barometer of strength when the current price movement remain above this line. Underlying Primary trend remain UP.

Price structure
An impressive breakout on Friday night saw the $1788.0 level hold as support following last Monday’s breakout along with the short downtrend line broken. Price action should be viewed closely as the keen eye would have seen the breakout level was tested during the past week to set up intra week support. A significant price movement ina leveraged position.

GOLD remains within a trading range of $1764.30 and $1834.0 as resistance.

The current breakout above $1788.0 with a large range price bar is a very bullish signal for further gains, the first being a retest of trading range resistance.

Indicator: Relative Strength 14
The Relative Strength is heading back to the 70 level a signal of increasing price momentum and should be monitored for a further move higher.  

Black and White Technical Report: The Week Beginning 30/08/2021, FP Markets

Comments from last week:  $1788 has again set the resistance level, this re-test of the earlier support can be the precursor for a further decline as the new lower high develops. Confirmation of this would be the price moving below $1764.30, again this would be part of the general decline in price from the May high of $1916.

A price breakout above the $1788.0 level would be a very bullish signal for further gains to retest $1834.0.


Price structure:
Silver seems to be starting from a lower base with a pivot reversal set last Monday and followed through higher on Friday night. Key resistance at $23.75 has been broken decisively, but the down trend line remains as the fist real test for the buyers in any further gains.

$25.52 remains significant resistance.

Silver appears to have set a low price base and  ready for a continued momentum move higher.


Indicator:  Relative Strength 14
Last week the Bullish divergence pattern again failed on Monday’s sharp opening price movement lower. Current Relative Strength is viewed as weak upward momentum.

Black and White Technical Report: The Week Beginning 30/08/2021, FP Markets

Comments from last week: While many try and compare the precious metals of Silver and Gold, in this current period Silver has not followed the Gold price higher and remains within the confines of a Primary downtrend. 

With two previous bullish divergence signals failing, the potential now is for a retest of the $21.60 level in the coming weeks.  To give a bullish signal price would be required to close over the $23.75 level.

Price structure:
Very good price structure has developed out of the past 4 month trading range.

Last week the breakout and shallow retracement has set a new Bullish pivot point with Fridays close and also confirms a “higher low” at this point in time.

First resistance remains at $2541.0.

The $AUD and GOLD advancing into the close last week, sets this price chart up for further gains.


Indicator:  Relative Strength 14
Relative Strength moving back above the 50 level is in line with price movements. Price momentum has again turned positive, look for further gains in this reading to underscore the current strength in price.

Black and White Technical Report: The Week Beginning 30/08/2021, FP Markets

Comments from last week:  The past week has seen the $AUD decline below 0.72c driving the relative price of Gold in AUD terms higher. Should these levels hold in the coming days, this current rally will be a positive for the local producers in the short term. (read days not weeks)

Underlying USD Gold remains at a decision point at $1788.00 (see Gold note above) a further advance in the USD Gold price coupled with a decline in the $AUD will underpin both the Australian Gold sector and Australian equities.

Price structure: LME Inventories still remain historically low.
Last week Copper set an Inside period up close (IPu) showing the market in balance following the a, b, c type retracement.

This is a good indication the retest of the $4.00 level is complete.

Going forward $4.00 will remain immediate key support.

The past midpoint resistance level still remains as the level to cross in the short term (daily).

Chart remains positive for the underlying Primary UP trend to resume. 


Indicator: Relative Strength 14
Confirmation of a loss of momentum is shown as the RSI moves below the “50” level, the “U” turn above the 50 level is a very positive sign of improving price momentum, The RSI requires a continued reading above the 50 level to signal positive price momentum.

The underlying Bearish divergence signal is finished.

It should be remembered the RSI can track above the 50 -70 level for many months at a time.

Black and White Technical Report: The Week Beginning 30/08/2021, FP Markets

Comments from last week: Copper has retested the $4.00 level with an immediate buying reaction to lift price of the lows. The Copper price chart is now firmly in a consolidation zone above the $4.00 level with the close at trendline. Last week’s price range was strong and has the potential to follow through lower to retest the $4.00 again, traders would be cognisant that a loss of price momentum can be a swift correction lower. Should the market see a close below $4.00, Copper will enter into a Primary down trend.


Volatility remains benign (read positive) for Australian equities, the forward premiums for PUT options remains in line with the underlying time to expiry values. 

Risk insurance is NOT being priced into the premiums, (for now). 

The XVI is the difference of 1-3 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.   

Black and White Technical Report: The Week Beginning 30/08/2021, FP Markets

Comments from last week: Volatilities can change very quickly on news items and trader sentiment. The tenant that states low volatility precedes high volatility also holds true. Although the past week showed a spike in volatility the closing value has remained within the Bullish for equities window. As the closing price was higher than the previous week, traders will on alert for potential higher values in the coming week.

Price structure:
The bullish view taken last week has failed, Last Mondays large range reversal has shown resistance developing along the “Neckline” of the Cup and handle pattern.

92.07 remains as support in any further declines.

The DXY shows a trading range is developing between 91.66 and resistance of 93.18.


Indicator: Relative Strength 14
Relative Strength bearish divergence has reformed as the reading moves below the 50 level. The Relative Strength remains negative, and further declines on this loss of pricing momentum could be expected.

Black and White Technical Report: The Week Beginning 30/08/2021, FP Markets

Comments from last week:  The impulsive price bar has set the tone for the breakout higher above two resistance levels. Being the opposite of last week’s observations. The developed CUP and HANDLE pattern is bullish for further gains.

The small retest showing in last Fridays close on the 93.45 level is a strong sign of price strength that needs immediate follow through higher in the coming days.


Price structure: This commodity is news driven by supply -demand.
Last week Oil set an outside period reversal bar at the key support level among $61.80 following an a,b,c retracement.

Next week the trendline will be re-drawn as tentative.

The expectation for higher price is high as the key reversal bar is a large range bar closing on the highs and with no lower wick or shadow formed in the early part of the week.

The closing price over $66.00 is a good signal for further gains in the coming days, this level will remain as short term price support and should be monitored as the key level to hold.


Indicator: Relative Strength 14
RSI set a sharp reversal from the “30” level to reach 50, look for a further rise in this indicator as confirmation of the underlying Bullish view in the current price action.

Black and White Technical Report: The Week Beginning 30/08/2021, FP Markets

Comments from last week: The WTI Weekly chart has entered into a Primary downtrend. The current a, b, c retracement my result in a bullish breakout higher or may be viewed in hindsight as the first down turn to begin a bear market. Current support levels are important, the $66.00 level being broken to retest the $61.80 level shows a technical retracement underway.

My view would be for a simple a, b, c pattern to play out within the overall UP trend.

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