Experience Trading
on the Go
on the Go
Volatility has ruled the past week, with precious metals moving lower to test support levels along with major Indices moving lower to test important support levels.
Last Friday the indices set key Bullish technical reversal signals with the potential to retest higher levels.
The reduction in the XVI value shows forward prices for “risk” are coming off, a bullish signal is setting up for equities.
West Texas Intermediate and Brent crude remain within a strong Bull market move with the next long-term price target for WTI the 2014 high at $107.
Gold and Silver continue to range trade; however, the charts now show an early bullish development, as Gold retested the long term Weekly up trendline, this may still take two to three weeks to confirm buyer support is in.
XJO WEEKLY Price structure:
The past week was marked with another large high to low range bar, with no upper shadow (wick) indicating selling from the open the sharp move below the key support level of 6900 has been overcome with the weekly bar closing above this important level. The 7200 is now resistance, for the index to set a Bullish signal a close over this level must be achieved. The key observation is the closing price at 6988 is over the 50% mid-point (6965) of the range low to high.
Indicator: Relative strength 14:
Relative strength has turned sideways to down, as the reading has moved below the 50 level, the next move in the RSI will be telling should it move higher above the 50 level.
The Relative strength Indicator reflects price momentum the current weekly closing price still reflects slowing momentum.
XJO DAILY Price structure:
Last Thursday set the lowest close since January 2021 ( 12 months) with Friday showing follow on buying from the open ( no lower shadow).
The inside period shows the market in balance from Thursdays late buying.
To make a further bullish signal the 6900 level must hold as Support.
Following a strong sell down for the week it cannot be discounted that Friday has retested the 7000 point level and closed below this level.
An immediate closing price above this level may indicate a recovery in price from last weeks low of 6758.
Indicator: Relative strength 14:
The Relative strength Indicator (14) reflecting the underlying price momentum has moved sharply lower below the 30-level indicating a loss of upward momentum. On Friday’s inside period IP, RSI has moved back above the 30 level, Relative strength should be monitored for an early divergence signal in the coming days – weeks.
Indicator: VOLUME:
Trading volumes have been increasing during the past week leading to Friday’s high volume. This marks the third significant increase in trading volume on a Friday. It should be noted a large crossing of BHP shares occurred after market last Friday, attributing 30% of the daily volume.
S&P 500 WEEKLY Price structure:
With a strong recovery into the close of the week, the S&P 500 has set a closing bullish hammer bar after testing support at 4200.
The 4545 level is next key resistance to trade through to confirm a reversal is in place.
A further decline would be indicated with a follow on Weekly close below 4320, a break of this level would have the Sellers in control and potentially testing 4050.
Indicator: Relative strength Indicator 14.
The sharp movement below the key 50 level does signal a loss of momentum and potentially further price weakness.
Price movements are considered positive with a reading above the 50 level, with this reading below the 50 level the Index has accrued more loss points than gained in the look back period of 14 (weeks).
S&P 500 DAILY Price structure:
Last Monday – Tuesday the S&P confirmed a 3 Bar reversal pattern as completion of the a,b,c price movement, this has set up a very bullish start to this week with the OPu on Friday.
Last Friday’s large range low to high has shown buyers return to close at the high also setting the stage for a sharp recovery back to test the 4545-resistance level.
Indicator: Relative strength 14:
Relative strength Indicator (14) has turned lower and is below the key 30 level. A continued lower close below the 30 level would alert traders to further decreasing price momentum.
A potential divergence signal may develop at these levels, being where the RSI begins to rise on declining closing prices.
NASDAQ DAILY Price structure:
The breakdown below the key 14535 level has met the June 21 – 14073 point breakout level, this now the key level of support to hold in the coming week.
The large range OPu ( Outside Period Up close) remains a key reversal signal.
A further cross higher above the 14535 – resistance level could be expected this week.
However a close below this level would be a very Bearish signal with the potential to retest the 13243 point open Gap level.
Indicator: Relative strength 14:
Relative strength has moved below the 30 level, indicating very weak and or negative price momentum on Fridays large range the RSI has turned sharply higher back above this level.
This is the area to monitor for an early divergence signal in the coming weeks.
USD Spot GOLD – DAILY: No Bull market.
Gold remains within a large consolidation zone, last weeks retest of the long term trendline is an important development following the Fake out (FO) sell signal last Tuesday.
Last Friday’s close above the key $1788.0 level is further evidence of buyer support.
While NO Primary trend exists in the Gold price, this development is an important Technical observation and should be monitored for the development of a bullish Pivot point.
Indicator: Relative Strength 14:
Relative strength shows a reading above the 50 level and turning lower below the 50 level, as upside momentum continues to be capped and prices consolidate.
SILVER DAILY Price structure: No Bull market.
The failed retest of the downtrend line has set the seller in control with Fridays close below the important $22.50 level as Silver remains within a Primary Downtrend.
During equity market corrective sell down, precious metals are often sold has a general risk off approach.
The current poor price momentum may see Silver retest the $21.60 level as further selling may occur on weak price momentum.
Indicator: Relative strength 14:
Current Relative strength is moving below the 50 level and now turning sideways shows price momentum is simply fluctuating, typical of consolidation patterns.
A continuing move below the 50 level into the 30 level would be very bearish in the short term.
AUD GOLD DAILY Price structure:
The AUDXAU chart remains constructive for higher values, last weeks retest of the $2541 level has set up a 3 – bar reversal pattern if followed through may see the $2600 plus levels retested.
The underlying Primary trend is UP, however the large consolidation patterns have weighed on the overall bullish picture.
Major and Junior Gold players remain news driven around exploration results, production costs and financial reporting.
Indicator Relative strength 14:
Relative strength moving sideways has turned higher and remains above the key 50 level this shows positive momentum, this ranging movement is typical with consolidation areas.
COPPER DAILY Price structure:
Last weeks rejection of the $4.50 – $4.60 level has Copper moving to the low of the inside period retesting the key midpoint support level of $4.33 again.
Copper remains within a large consolidation zone as the long term trendline is again retested.
The current large range movement high to low has the potential to retest the lower support level of $4.00.
Indicator: Relative strength 14:
Current readings 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:
A sharp rise to an 11month high in volatility resulting from the bearish move in markets.
Last Friday’s reduction in the XVI value shows forward prices for risk are coming off, a bullish signal is setting up for equities.
Volatility is falling from the highs hence the forward price of protective ETO’s is decreasing in price as the “Vega – Delta” component decreases.
This will be supportive for local equity prices.
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:
Bull market moves are underway in the $USD Index as price Gaps higher. The 97.75 level remains key resistance and may be tested this week.
The $USD Index remains within a Primary UP trend with 96.93 becoming the new support level to hold.
This will reflect on the value of the $AUD and have inflation ramifications within the Australian economy as the $AUD has the potential to retest the $0.65 cents level.
Indicator: Relative strength 14:
The Relative strength has turned higher in line with price movements and should now be monitored for a Bullish divergence signal as the current reading remains below the key 50 level.
This commodity is highly news driven by supply -demand.
Last week the WTI contract set an OPu bar. This is statistically a strong signal for price reversal, as the WTI contract remains within a primary UP trend a retest of the $75.20 level could be expected as part of the trending process.
Overall the WTI contract remains on target to retest the June 2014 high at $107.73.
The confirmed trendline remains in place as price diverges higher.
Indicator: Relative strength 14:
The current price strength has not produced a new high in the RSI, this will now be monitored for a developing divergence signal, although it may take many weeks to develop.
The Relative strength crossing the 70 level is not a signal of over brought as the reading can remain strong for many weeks.
Access 10,000+ financial instruments Auto open & close positions News & economic calendar Technical indicators & charts Many more tools included
By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.
Source - cache | Page ID - 21494
