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Technical Analysis CFDs Trading Report - TradingLounge 10 Nov

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Technical Analysis CFDs Trading Report

EarlyBird – Technical Analysis CFD Trading Report – The Day Ahead

Dow Jones – 11,776 -324%
Base Metals Negative
US Gold CFD: 1800
Oil WTI CFD: 97.45
Copper CFD: 351
US Dollar CFD: 78.00
Dow Jones CFD 11,924
S&P500 CFD: 1248
FTSE 100 CFD: 5435
SPI CFD 4245
Note, the US markets close 1 hour later now, but I would like to still place this report out around the 730AM but the US market will not have closed, so prices mentioned may change somewhat, but the analysis will be the same. I enjoy starting the EarlyBird at 330AM and getting it out at 730AM as the early morning is great thinking time.

U.S. stocks sank as a surge in Italian bond yields to crisis levels put the spotlight back on euro-zone sovereign debt issues.
The Dow Jones Industrial Average dropped 241 points, or 2%, to 11929 after falling as many as 317 points. The Standard & Poor's 500-stock index slumped 28 points, or 2.2%, to 1247 while the Nasdaq Composite declined 62 points, or 2.3%, to 2665. The losses wiped out the previous two days' gains, and pushed the major indexes into negative territory for the month.

CFD Commodities

US Gold CFD: 1800

Because of the Italian bonds, the rush to the Dollar has overshadowed the move to safe gold, the Gold is having the expected resistance at 1,800 (mTL8) and either a selloff or more corrective price action above or below across 1,800 and SG1 1830, as you can see in the gold charts a top is expected at this level and silver will probably lead the way, the lower the Euro falls the further the Dollar will rise and traders are simply preferring to swap Euro and gold for dollars, this has been on the cards for some time and Italy’s bonds have been the catalyst, this also creates the top for the US Indices.
Oil WTI CFD: 97.45
Unusual spike in Oil and haven’t had the time to look into the why, however the general force should pull oil down in line with the US Indices in due course, the 98 (mTL8) as the resistance
Base Metals

US Spot Prices (in l/b)
US Copper:           Last: 3.44-
US Nickel:             Last: 8.24-
US Zinc:                Last: 0.87-
US Aluminium       Last: 0.93-
Copper CFD: 351
The support 350 is now broken, but we don’t need this market to tell us that the rest of the markets have turned, but still it was what we were looking for, we can now expect lower levels to 300 as the next target, the price will bounce at each 10 points so watch any stops.  But the main point here was a break of 350 would ad selling pressure to the ASX the Materials sector and trigger the shorts

US Dollar CFD: 78.00
The Italian bonds send the Euro down and the Dollar up, as you know we were expecting this, that is wave 2 low for the Dollar, over the weeks and months we will see the dollar move higher and the Euro move lower, long term positions can be viewed, shorting the Euro is normally our thing, but holding US Dollars will offer the better rate. On a personal note we will shift  cash AUD to Dollar  and more so above the 80 as support.
Expect a reaction at 78 perhaps back to 7750 but not much lower and probably within the SG2 77.72 to 7765 then up again, but that does appear to be five wave up from the 7665 to 78 so expect some sort of abc across 78
: The next leg down is under way wave three of three
Elliott Wave: Wave (iii) is underway as you can see, the 130 and 120 are both targets this is a long term trend and it didn’t start last night, more so at the 150, any way this is a larger Wave 3 so there will be more downside, this will be in line with the SP500
Trading Strategy: The Daily Robo and the weekly is triggered with stops above 138.
Short term; there are five small wave down from last night from 13850 to current lows 13550, there can be still further lows, but after this five waves there will be an abc rally but you need to understand that the Euro has shallow retracements and that we are in Wave (iii) of Wave 3, this is the strongest part of the Elliott structure, this is where gaps occur!
Essentially shorting retests, use less money but wider stops
: TL1 1.00 is the magnet and once 102 becomes the retested resistance then more so. Expect bounces at 102 and 101
Elliott Wave: start counting the impulse waves (five waves) down from the last high at 104
Trading Strategy: If you were short from the 103 or 10272 well done. Understand that the market will work lower but the main rush is done through 103 and 10272 collecting the stops, the price will work through the sublevels as normal now.

Dow Jones CFD 11,924
TradingLevels: The move down last night is in five wave, so expect a abc counter trend 40 – 60% (12,030?) then another five waves down.
Elliott Wave: The top should now be in and we should now look at getting short.
Trading Strategy:  The abc rally will be a 5-3-5 abc structure once it is completed we can short, for the longer term strategy, this should be in the next session, we will talk about this in the video.
S&P500 CFD: 1248
: Look for 1250 as resistance, should see a corrective move up then another five waves down
Wave count: five waves down from last night, then three waves up (abc) then another five waves down
Trading Strategy: If you are short from the 1272 well done that took courage. Keep stops above last high and look to add to short on the rally, the rally can come back up to the 1272 but the 1256/8 is a likely place, however if you see the price absolutely  stuck under the 1250 then add there but leave the stop above the 1272. Remember this is a long term short trade that we are building positions into, as profit accumulates then add more, but you need to work out the risk by building the position, the buffer in profits also need to build you simply can use the profit to sell more the buffer needs to grow further than the contracts. Also understand that we are still picking tops here and the reason for this short is the 1272 as a turning point in time and the five waves down which confirm at least there will be another five waves down after the rally, but beyond this its still a guessing game even though the larger Elliott pattern is bias short. And the fundamentals also suggest fear of the unknown ahead.
FTSE 100 CFD: 5435
TradingLevels: 5000 TL5 is the target with bounces through Minor Group1 5300, 5200, 5100
Elliott Wave: The rally up is clearly completed and the impulse wave down is under way, if the wave count is correct then 5000 and 4500 are reasonable target, after all the main pattern back at 1998 to now is all about the market swinging across 5000 and now we have a series of lower highs in place.  But first things first, the 5300 the top of Minor Group1 is the 50% retracement level so this is a price point that needs consideration. We can also look at the five waves down last night that will take the price closer to the 5300. Even though the focus has shifted from Greece to Italy after this will be Spain, France Germany and the UK they all need to go through the financial microscope at some point, there are still plenty more skeletons to fall
Trading Strategy: It just depends on your trading style and your trading plan, long term; you can wait for the first bounce and sell into the rally leaving stops high, the first bounce could be lined up with the other markets and would come from the 5400, so a retest of 5500 would be the first obvious level to short from, if there is no bounce there you need to work off the 5300 adding when the other minor levels become resistance, the longer term view is for the price to find 5000 as the retested resistance and short from there.  

SPI CFD 4245
TradingLevels: Failed to find support again above the 4300 mTL3 look at 4200 next with 4000 as the next Medium Level target
Elliott Wave: Target 4200. The important aspect here is that there are five wave down, this creates the 4365 roughly as the top of the corrective rally, now expect further downside
Trading Strategy: shorting is the side to be on, but this is never easy as it sounds, the move down last night is not complete and the opening of the cash will move it down further to 4200 or lower in SG2 4172 zone, the point is we have to look and wait for the five waves down to complete then we will see a rally an abc 5-3-5 structure 40 – 70% back up, this is the best pace to short, the 40-70% is a wide range, so what we do is count the waves in the abc rally this will give us the price point we are looking for. In the meantime just use the sublevels as support or resistance to trade there is also the option of using options    


It appears the rally up in all indices is finally complete, the current rally highs of Oct and Nov have been very high and have also tested our conviction.
I do need to point out, that we have been here before, that is picking tops, is risky business and what we have now is the first impulse wave down (five waves), this impulse wave will be followed by another impulse wave down, but that all we can say for sure, this pattern of five down three up then five down, is essentially three swings, this can either be and abc (bullish corrective) or these three waves down can turn into a larger five waves down and if this is the case then we have our bear market and this is what we are trading for, so we can be wrong is the point I need to make, but at the same time I have to roll with it the opportunity is to big too wait, shorting the SP500 at 1272 and the Euro at 13772 and shifting Cash AUD to Dollar are the starting points. As the market unfolds we will be adding to positions.

The ASX we can start looking at the Daily and Weekly Robo short trade, but understand the risk, yes we had five small waves down last night and after an abc rally we will see another five waves down, but this is just a larger abc correction, this needs to grow into five larger waves. I will explain this in the video.

Trading Quote
Don’t get caught in a situation in which you can lose a great deal of money for reasons you don’t understand.

Today's Financial Events
Time     Currency   Detail     Forecast    Previous
7:00am  NZD        RBNZ Financial Stability Report      
8:30am  NZD        Business NZ Manufacturing Index     50.8  
9:30am  AUD        RBA Assist Gov Lowe Speaks      
10:30am  AUD        MI Inflation Expectations     3.1%  

10:50am  JPY        Core Machinery Orders m/m    -7.2% 11.0%  
10:50am  JPY        M2 Money Stock y/y    2.7% 2.7%  
11:30am  AUD        Employment Change    10.3K 20.4K  
11:30am  AUD        Unemployment Rate    5.3% 5.2%
10th-17th  CNY        Foreign Direct Investment ytd/y     16.6%  
Tentative  CNY        Trade Balance    26.3B 14.5B  
4:00pm  JPY        Household Confidence    39.3 38.6  
5:00pm  JPY        Prelim Machine Tool Orders y/y     20.1%  
5:30pm  EUR        French CPI m/m    0.1% -0.1%  
10th-17th  CNY        New Loans    503B 470B  
10th-17th  CNY        M2 Money Supply y/y    13.1% 13.0%  
6:00pm  EUR        German Final CPI m/m    0.0% 0.0%  
6:00pm  EUR        German WPI m/m    0.2% 0.3%  
6:45pm  EUR        French Industrial Production m/m    -0.6% 0.5%  
8:00pm  EUR        ECB Monthly Bulletin      
8:00pm  EUR        Italian Industrial Production m/m    -2.2% 4.3%  
11:00pm  GBP        Asset Purchase Facility    275B 275B  
11:00pm  GBP        Official Bank Rate    0.50% 0.50%  
Tentative  GBP        MPC Rate Statement      
12:30am  CAD        Trade Balance    -0.5B -0.6B  
12:30am  USD        Trade Balance    -46.1B -45.6B  
12:30am  USD        Unemployment Claims    402K 397K  
12:30am  USD        Import Prices m/m    0.3% 0.3%  
2:30am  USD        Natural Gas Storage     78B  
2:40am  USD        FOMC Member Evans Speaks      
3:45am  USD        Fed Chairman Bernanke Speaks      
5:15am  USD        FOMC Member Yellen Speaks

1. Check the Dividend & Reporting section for your stock on this site before trading
2. Prices may change as this Technical Analysis report is written from 3.30 – 6.30AM
3. Always think things out for yourself, we are only here to bounce ideas around.


Good Morning & Good Luck!

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