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01    TECHNICAL ANALYSIS – Today's DayAhead Report – 11 April 2012» 
02   FOREX  – Latest Elliott Wave GBPUSD 2 charts»
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01  Today's DayAhead Technical Analysis Report – 11 April

Market Drivers

Dow Jones 12,722 -1.60%
Base Metals Softer
US Gold CFD: 1660
Silver: 31.50
Oil WTI: 100.70
US Dollar: 80.00
EURUSD 1.3070
AUDUSD 1.03
Dow Jones CFD 12,715
S&P500 CFD: 1400
FTSE 100 CFD: 5550
DAX CFD: 6570
Shanghai 2305
SPI CFD 4220

News
NEW YORK (Dow Jones)--Stocks suffered their biggest declines this year, losing ground for the fifth straight session, as worries over rising borrowing costs for European countries weighed on investor sentiment ahead of the start of earnings season.
On Tuesday, stocks opened flat then drifted lower throughout the session. The Dow Jones Industrial Average sank 213.66 points, or 1.7%, to 12715.93, and the Standard & Poor's 500-stock index declined 23.61 points, or 1.7%, to 1358.59.
The Nasdaq Composite fell 55.86 points, or 1.8%, to 2991.22, its eighth decline in 10 trading days.
Stocks have slumped over the last week after concluding their best first-quarter in more than a decade. Both the DJIA and the S&P 500 have fallen more than 4% during their five-session slides.
Declines started a week ago, after investors interpreted minutes from the Federal Reserve's most recent policy-setting meeting to mean that no additional monetary stimulus is on the way soon. A poorly received Spanish bond auction and disappointing monthly jobs report perpetuated the market's decline.

US Commodities

US Gold CFD: 1660
TradingLevels: Gold moves in the opposite direction from the Indices and base metals for the first time, well for a while at least, this is one point and the second point is that it’s above the MediumLevel 1650 (ML65), both positive aspects for this market. The wave count up can still be corrective or a developing positive impulse wave (five waves). The next most important element is the price developing support on ML65. It is likely to find resistance into SG2 1665|1672|1680 then retest ML65 this testing demand is the key for further upside, as for another confirmation support on 1672 would also confirm further upside from a Elliott perspective
Elliott Wave: Wave (2) low could now be in play at the 61.8% retracement level 1610 roughly, a move above 1672 would be helpful.
It is also important to stay with the facts and even though gold is showing signs of a Wave (2) low being in place, the actual evidence is not in place, so caution is required.

Silver: 31.50
TradingLevels: I know it’s a long way away but only a move above the last high above 33 or 33 as support would confirm a long trade. If the 32.000 becomes support you can get a small position but understand your buying without confirmation in the Elliott structure and would be there for relying on the support it develops at 32
Elliott Wave: The pattern sitting on 31.00 as support is more corrective, a continuation pattern for further downside

Oil WTI: 100.70
TradingLevels: the price is trapped in Subgroup1 (SG1) 101|102|103 therefore and is now part of the 100 psychological picture. The 100 (TL1) is the centre and the SG1 above and the first MinorLevel below (mTL8) 98.00 is the support, we should expect the price to flip both sides of TL1|100 with SG1 acting as resistance and the mTL8 as support. The Elliott Wave count suggests further downside with the 100 becoming the resistance. look for a series of retests as resistance into 100 then 98 mTL8, resistance at mTL8 helps detach the price from 98, but 95 (mTL5) and 90 (ML9 MediumLevel are also part of the process in rejecting 100 as the resistances. The number 1 is the strongest number and it simply takes time for the market to change its mind from support to resistance, its simply change and acceptance requires time, like the Dow taking its time to find its current high
Elliott Wave: Oil prices recovered in three waves from 100.70 up to 102.90, which appears to be part of a running triangle placed in wave iv). Any minor bounce to 102 will be wave e before weakness extends towards and below $100 per barrel.

Base Metals

US Spot Prices (in l/b)
US Copper:           Last: 3.68-
US Nickel:             Last: 8.09-
US Zinc:                Last: 0.89-
US Aluminium       Last: 0.91-

US Copper CFD: 365
Moves under 375 and 372 created the bearish picture and further downside would be expected. The 380 is a MinorLevel (mTL8), the next MinorLevel is 350 (mTL5) which would be the next target.

Forex Trading

US Dollar: 80.00
TradingLevels:  Long trades with 80.30 as support, you can also move in on 80 as support scaling in through SG1 (8010|8020|8030) The risk is if wave two is completed, that is the current vibration across 80, this is why the trade off or above 8030 is the safest
Elliott Wave: Wave (ii) is looking more completed?  Once completed then the Wave (iii) strongly… The Euro and Pound are starting to confirm their moves down, so the next support on 80 is a fair and reasonable opportunity to scale in long, but keep the positions sizing small as there is plenty of time to add to longs at 8050, 8072, 81 and 82…

EURUSD 1.3070
TradingLevels:  The 130 (MinorLevel mTL3) is the main event now, the price is the thought and its needs to change from support to resistance, this is not a big change of mind as its heading in that direction any way, it’s just the unseen future unfolding and longer term short traders would be using Minor Group1 MG1 (130|120|110) to build short positions into the market with the aim of building a position above parity 1.00 then adding under 1.00 as the resistance, this is long term trading for a currency. Anyone with experience of Group1 will also know the price will bounce around at each level within Group1 and this is not for the faint hearted, all I can say is not to over trade, don’t let greed in, create a plan and marry than plan.
Elliott Wave: The shallow wave (ii) in at 13143 would line up with the pounds wave (ii) just above 159 which we would expect a bounce off 158 finding resistance at 15872|80 then testing 158 which we need to see a breakthrough as we do in the Euro at 130 but it’s a tough support
Trading Strategies: It’s only natural for the price to find support on 130, currently the price is developing 131 as the resistance and is slowly developing the next set up sub waves down, that should take it below the 130. For short term momentum traders it’s going to be tricky getting through and around the 130, either move in closer or give it room to move.

AUDUSD 1.03
TradingLevels: The price is slipping further in to Subgroup1 ((SG1) 103|102|101) The 103 has been tested as the resistance so the price is now trapped in this zone. Expect the price to bounce off each level in SG1. The focus is now Microlevels between 103 and 102 The 10250 is roughly the 61.8% retracement level of Wave (2) so this Midpoint 10250 as resistance would create the 102 as the target. The 10230|10220|10210 as group1 will also see the price bounce around.
Elliott Wave: Aud is acting weak right now, slightly down against several other major currencies. In fact, a recovery from 1.0242 is clearly corrective, which appears to be a three wave movement, called a Zigzag with a running triangle in wave (b). It seems that wave 4 already reached highs at 1.0355. A minor five wave fall from 1.0355 will confirm immediate decline to 1.0245.
Bottom line: recovery is clearly corrective and pair should fall into a new low
Trading Strategies: Look for short trade set ups from the Microlevels and lower volume on the retests as the set ups to short. But the 10250 as the retested resistance is step one, then expect a bounce off 10230 back to 10240/50 testing the 10250 as the resistance (like it did off the 10250 to 10272), then look for the price to work lower into Group1

Index Trading

Dow Jones CFD 12,715
TradingLevels:  Below the Major TradingLevel 13,000 (TL13) there are the MinorLevels working down in the fibo sequence 8,5,3,2,1 that relates to 12,800 (mTL8) 12,500 (mTL5) then Minor Group1 12,300 (mTL3) 12,200 (mTL2) and 12,100 (mTL1) the most important level is the Midpoint 12,500. There are other important numbers such as 12,772 and 12,720 and 12,650 these are all part of the next degree lower in the mathematical structure which in turn fits into the wave structure and the psychology of the market which in turn is the architect.
Elliott Wave:  The currencies are leading the way, so we can assume’ we are going to get five waves down here in the US indices (we only have three so far) if we do get the five waves down which would make an Impulse wave and would put the price at 12500 roughly would then see a abc counter trend off the 12500 then another five waves down which we could start to look at the MediumLevel 11,500 (ML15) which is the next largest price point/ level.
Even though we are seeing the price below 13000 we haven’t seen any retest of 13000, we haven’t seen the traders then buy on dips the value hunters, in a nut shell we haven’t seen the 13000 rejected. So we have to also hold the thought of a larger corrective pattern across 13000 until the 13000 has been tested and rejected. 
Trading Strategies: In Elliott terms we are looking for five waves down and the low of wave three (iii) is close at hand 12,700 – 12,650 then a Wave four (iv) would develop and we don’t trade wave fours, if you can work out when its completed then you can trade Wave (v) down, at a very rough guess as I haven’t had the time to consider it, but a failed retest at 12650 could create the short to 12500 as wave (v).
Because there the price moved 300 points above 13000 you can expect that below as the balanced swing so 12700 zone can create the support of Wave (iii)

S&P500 CFD: 1400
TradingLevels: Subgroup2 (SG2 1380|1372|1365) followed by the Midpoint 1350 followed by Subgroup1 SG1 (1330|1320|1310) which takes us to MinorGroup1 MG1 1300
Elliott Wave: Looking for five waves down as the next impulse wave, the Wave (iii) can be in place now 1356 or another small move down to 1350, the Wave (iv) would be a 38.2% retracement into the 1372/75 area, the resistance or rather the support is at 1380
Trading Strategies: We are seeing three waves down to 1356 if this structure turns into five waves down then we will get another five waves down after a abc counter trend from the first five waves down

FTSE 100 CFD: 5550
TradingLevels: A move under the 5600 on the daily chart creates an overlapping wave structure and therefore place the FSTE into bear market, that probably stating the obvious but it’s good to know when and how to collect the evidence. We also know the UK is a leader on the downside as traders know there is fundamental weakness in the UK, the debt must be getting close to 3 trillion which is about 15 times the GPD not a good look, but that’s the funny thing with us humans, we looked at Greece with such a small population and consider that the problem and  it defaulted and the world is still here and now they/we will do the same with Spain the fourth biggest in the Euro zone, but that’s not the problem either wait until the spot light swings over to France and the UK, let alone the US, which we will now also start hearing all the positive points turn to negative, sorry for rabbiting on, the FSTE is still picking up speed to the down side and longer term traders can look a lot lower, what are the levels what are the series of larger numbers, numbers are magnets of traders thoughts
Elliott Wave: A larger impulse wave is unfolding, the one we have been counting over the last week or so
Trading Strategies: Yes the price is heading down but finding a good set up that you understand well is the key to controlling the initial risk, between entry and stop. The sharp move down should slow and see a retested, look to short retests that are on low volume, the low volume in the uptrend is step one, the next step is to get a failed retest of a price on the short side, know the price the market is working with so you can work with the same price and then observe the price pattern and the volume on the retest, such as testing 5600 and failing or 5772 or 5500. Also the Dax should bounce off the 6500 (MediumLevel ML65) this could help with the FSTE100 also check the FSTE 250 supports numbers as the FSTE250 has been a stronger market than the FSTE100

DAX CFD: 6570
TradingLevels: MediumLevel 6500 is the next support expect a small bounce, consolidation before further downside
Day Trading: The Euro and Pound are in line to the downside with their Indices, which is expected to continue, the question is where and how to get short and in this case the 6500 is the MediumLevel you need to have as retested resistance before shorting. Observe the bounce or consolidation at 6500, look at the volume, look at the Euro, look at the SP500 try and bring all the markets you can in to the picture that will be in fear mode and working in harmony, this can give you a good sense of what is going on and what you should be doing.

Shanghai 2305
TradingLevels: Same (wave (iv) is still unfolding at mTL3|2300)
The 2300 is the top of Minor Group1 it will be the support of the wave (iii) and see Wave (iv) the resistance or rather the supply is 2350 the Midpoint but a lower price would be more suitable for the high of wave (iv) such as 2335

SPI CFD 4220
TradingLevels: The US and European markets dominate the Asian region, many of the stronger Asian markets will try and rally but fail, for the ASX200 Cash the 4300 as the retested is to point of failure that is about to occur the 4272 is a subtle but key price point
Day Trading: You should also ready be short with the price under 4300. The tradinglevels are working a treat now that the price is on the move, the support in at SG1 4230|4220|4210 which will retest the Midpoint 4250 form the overnight short covering. Use the each sublevel as targets to exit and for the trade set up as the support or retested resistance

Technical Analysis Summary

Did Spain wake up the Grizzly Bear or was he getting up anyway?
Spain is the catalyst for the time being. The European markets have been the leaders in weakness as have the Euro and Pound, we are seeing more confirming price patterns to the downside.

The US markets Dow, S&P, Transports etcetera are now rolling over as expected and will overwhelm the Asian markets. The Shanghai is, as you know, rallying into a wave four but will soon finds its top of wave four and continue its trend down while the N225 and the HK will and, are falling into line and we should see the ASX slip lower and lower.

"Protect your assets" is the first rule of investing; we come to the table each day to see how we can protect our positions better not to see how much money we can make, this takes a long time for new traders to understand.

Trading Quote

Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality is distorted by a misconception.

Today's Financial Events

Time       Currency   Detail                                           Forecast    Previous
8:00am    NZD           NZIER Business Confidence        0 
9:01am    GBP           BRC Retail Sales Monitor y/y      -0.3% 
9:50am    JPY            Core Machinery Orders m/m       -0.7%        3.4% 
9:50am    JPY             Bank Lending y/y                        0.6% 
10:30am  AUD           Westpac Consumer Sentiment    -5.0% 
11:30am  AUD           Home Loans m/m                        -3.7%         -1.2% 
11th-17th  NZD          REINZ HPI m/m                           0.8% 
11th-14th  CNY          New Loans                                   799B           711B 
11th-14th  CNY          M2 Money Supply y/y                  13.1%          13.0% 
3:00pm     JPY           BOJ Monthly Report     
4:00pm    EUR          German WPI m/m                        0.9%           1.0% 
10:15pm  CAD          Housing Starts                             202K           201K 
10:30pm  USD          Import Prices m/m                        0.8%           0.4% 
12:30am  USD          Crude Oil Inventories                   9.0M 
4:00am    USD          Beige Book     
4:00am    USD          Federal Budget Balance              -207.5B      -231.7B 
7:30am    USD          FOMC Member Yellen Speaks

NOTES: Prices may change as this Technical Analysis report is written from 3.30 - 6.30AM
Always think things out for yourself, we are only here to bounce ideas around.

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02 FOREX – Latest Elliott Wave GBPUSD

GBPUSD 1 Hour Chart
Wednesday, 11 April 2012 at 2:15:00AM AEST

Nice fall on GBPUSD today, towards 1.5800 region, where we believe that break will occur in this week. For now that recent pull-back appears to be wave 2 part of a downtrend, which should continue, ideally into wave three of three; one of the most powerful and strongest waves in impulsive sequence.

Short-term critical resistance is now at 1.5930.

GBPUSD 4 Hour Chart
Tuesday, 10 April 2012 at 4:35:00PM AEST – top in place

Cable made clearly five waves down from 1.6060 high broke trend-line support of an ending diagonal and wave (4) swing as well. These are all indication for a bearish trend, especially as current rise from 1.5805 looks clearly corrective, labeled as wave (2). Watch out for wave (2) top in 50-61.8% retracement area.

Pair should fall below 1.5805 while 1.6060 critical region holds

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