Technical Analysis Report Weekly
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01 Today's DayAhead Technical Analysis Report – 13 March
Dow Jones 12,952 +0.24%
Base Metals Mixed
US Gold CFD: 1700
Oil WTI: 106.50
US Copper CFD: 383
US Dollar: 79.86
Dow Jones CFD 12,965
S&P500 CFD: 1370
FTSE 100 CFD: 5885
DAX CFD: 6915
SPI CFD 4210
Transportation and industrial shares are diverging in the U.S., a signal that equity investors are starting to agree with what the bond market already knows: this economic recovery will remain sluggish for months to come.
US Gold CFD: 1700
TradingLevels*: Wh1700 is the main price and SG1 1710|1720|1730above is doing its job of holding the price to 1700 and SG2 1680|1672|1665 below is doing its job of holding the price to 1700, so we are seeing the price swing across this level and if we give it enough time the 1700 will becomes he support or the resistance. Refining this further the 1720 above as support is also critical for long trades and the 1672 as resistance creates shorts.
Elliott Wave: On gold we are trying to figure out if recovery from 1662 is corrective or start of a larger bullish sequence. Well, on the 4h chart as you know market still trades well below 1725 resistance, and here we can see that recovery is still only in three-waves with price trapped between parallel trend lines. So as long that’s the case, bears are possible. On the other-hand a decisive break through 1715.30 will confirm a bullish view for the next 2 or 3 sessions.*See TradingLevels article
TradingLevels: for the bullish Elliott wave structure to remain bullish, the last low around 3240 must stay in place, we are likely to see the market test the 33 in the next session and probably see some sort of bounce support so allow the bounce to unfold, once it runs out of steam and does the second retest of demand is where the long trade set up would start to develop
Elliott Wave: Is the move up off the last low, appears to be five waves (impulse) so the current move down is part of an abc correction, if this is the case then the 33.00 really next to hold as support. Wait for the support to be tested.
Oil WTI: 106.50
TradingLevels: The Midpoint 105 as resistance confirms the bearish wave count and would see the price at 103. Support on 107 is shifting the weight to the upside. The 106.50 is the balance line. After a small pullback in the US Dollars we expect it to move up strongly, this will place pressure on commodities, so the wave count on the Dollar and the Euro would be worth inclusion.
Elliott Wave*: Oil prices accelerated to the downside, well below support channel line which is indication for a change in trend. Well, support was found in recent hours at 105.30, but only for a minor recovery in wave 2, which will top out after three sub-waves up into 107.00/30 resistance area. We expect more selling in sessions ahead, while 108.11 is not broken; count invalidation level. Ideally, we will see a fall below 104.30 in this week.*See Elliott Wave education
US Spot Prices (in l/b)
US Copper: Last: 3.83-
US Nickel: Last: 8.62+
US Zinc: Last: 0.93+
US Aluminium Last: 0.98-
US Copper CFD: 383
Technical Analysis: The price will test the move up from the last low 372* level, it may stop at the 380 level however the 376 is the 61.8% retracement level. we could say a move under the 375 is the first sign of weakness and a move under 372 creates a short trade *See TradingLevels article
The USD is erasing some of the gains that were seen on Friday after better than expected NFP numbers. So far, current moves are quite slow so they are most likely only part and contra-trend moves within a larger trend, which is down on Eur/Usd, Aud/Usd, Gbp/Usd and up on Usd/Chf. We expect that this USD bullish trend will continue in this week, especially as commodities are also showing bearish picture, especially oil. We will keep a very close eye on that one.
Forex US Dollar: 79.86
TradingLevels: The main trend is up and the price is working through the Major TradingLevel TL8 | 80.00.
Elliott Wave: The Elliott wave structure now has the possibility to move up strongly in Wave 3, the trade set up is support on 80.00.The last move up from 79.10 to 80 is five waves so we are seeing the abc back into SG2* or the Midpoint once this is completed then wave three of three would be underway.
Trading Strategies:Trade long on next support of 80.00, scale in through SG1*.*See TradingLevels article
TradingLevels: In the bigger picture once the 130 has been breached Wave 3 down would be confirmed and we can further add to short positions, the 130 is the most important, the US dollar would have found support on 80 and would be moving up strongly in its Wave 3
Elliott Wave: The move down from 13272 SG2 level to the current low around SG2 13080 is Wave I, the current move up is Wave ii, wave two retraces 61.8% of wave one in the text book, so that would be an abc correction 61.8% to around 132. But the reality is the wave two can retrace anywhere from 40 – 80% so it’s more important to work out the rally pattern the abc a 5-3-5 structure in this case the 38.2 - 50% at 13172 looks about right
Trading Strategies: The current rally towards 132 is expected to fail and roll over down, so finding the right set up to add to shorts. Essentially you want to see the price move up then down and then lock under a certain price as resistance and then short the failing price, as an example if the price move above the midpoint 13150 say to 13172 SG2 zone and then came back down under the 13150 Midpoint as resistance with at least one retest, two is better, then start scaling in and as the price gets trapped in SG1 especially the pivot 13120 then add again and under the 131 and 13072, you don’t need to go overboard but these are the better number to work as always
TradingLevels: Being back at 105 and understanding the wave count the 105 will experience a series of swings over the week ahead of different degrees of structure, but track the wave count closely for an accurate assessment of the patterns.
Elliott Wave: Aussie moved nicely lower since our past update, where we are still monitoring incomplete impulsive decline from 1.0670 top. Notice that recent price action was quite strong and sharp to the downside, which is usually an extended wave (iii). As such, we expect more weakness after any bounce in the coming hours; which will be only a blue wave (iv). Key resistance for wave (iv) comes in around 1.0545. Projected target for Aussie is at 1.0400/20.
Trading Strategies: The later part of Wave 5 down under 105 is nearly finished, there will be a small wave three and four across 105 unfolding now then down below 105 again to complete the main five wave down from the 108. Once these five waves down are completed then and ABC counter trend rally up will unfold either to 10650 or 10772 these are the two levels of supply and they are also technical points in the larger wave structure. Know this creates a variety of trading opportunities; just keep an eye on the Elliott charts for the low. In the meantime expect choppy price action at 105.he
Dow Jones CFD 12,965
TradingLevels: The price is testing 13,000 and the structure should see it touch and or move through 13,000
Elliott Wave: Even though the price up we still consider the move Wave B and can expect a new high then a sell off into Wave C, this would be and Expanded Flat correction. So a move to 13,000 – 13,050+ then a correction
Trading Strategies: Expect selling at the old highs or above 13000, the 12900 is now the short term support as it has built a volume support.
S&P500 CFD: 1370
TradingLevels: Support on 1372 creates the 1380 target or close to it as the old high on the cash is around 1378
Elliott Wave: The structure up can be counted as corrective or impulsive, even if a new high is made it can still be corrective, this is because we are in a wave four and in wave four Expanded Flat correction can occur, which simply makes a new high and then gets sold off into a larger swing down and Expanded Flat is an ABC, the Wave B makes a new high and the Wave C makes a new low, then Wave 5 up
Trading Strategies: Either way, if the move up is a Wave B or an impulse wave, we will still get and corrective pattern down, either the Wave C or a smaller abc corrective pattern
FTSE 100 CFD: 5885
TradingLevels: The 5900 is in the supply resistance zone, so expect a corrective pattern, however after this if the 5900 develops as the support then you have a long trade, the abc at 5900 can come back to 5850. The main point is that you know you’re in the supply zone and the price action will be choppy and can fail so any trading requires a clear and robust set up
The current high above 5900 is a resistance of a daily overhead trendline.
Elliott Wave: The GBPUSD is gearing for a strong move down in Wave (3) this may help the FSTE, but take a closer look at the correlation has it may prove helpful the wave count on the pound dollar euro are more clear than the stock market, so gleaning any subtle aspects could prove helpful, as can the Dax,, with support on 6900 and 6930 SG1
Trading Strategies: you know you need to wait for a set up at 5900, the SG1 and SG2 are the outside supports and resistances, so a break out from SG1 or SG2 is the trend and playing inside this is scalping.
DAX CFD: 6915
TradingLevels: Support is developing on 6900 which brings in 7000, but support on top of SG1 at 6930 is the first step without this the price is still married to 6900
Day Trading: trade the sublevels as support and resistance, the trend is up from 6600 and is in the later section of the trend, so expect a top of this trend anywhere between 6 -7000
SPI CFD 4210
TradingLevels: SG1 holds the price as resistance to 4200 and SG2 holds the price to 4200 as support, a break out from SG1 or SG2 is the direction of the trend.
As you can see the price has been working across 4200, we could assume that its two thirds of the way through its pattern, so another swing down to 4180 and then if the price climbs back about 4200, then we can expect the price to move up further, however if the price gets trapped under the 4200 then expect further selling
Elliott Wave: In the slightly bigger picture if the price takes out the last low 4130 then you have a bear market and support on 4200 creates the upside, however expect more swings at 4200 first.
Day Trading: support on 4230 creates the long and 4172 as resistance creates the shorts, play in the market now while the price is trying to sort out the 4200 as support or resistance can get you into trouble, wait just a little long and you should be able to see support or resistance at 4200, this is the key to the next main trend, so it may take some time but the next trend will make it worth it.
The US Dollar is certainly a central market driver however the currencies, at this stage, have a clearer wave count than the indices. We can see the Dollar is in a strong uptrend; sure it will pull back off its highs from the 80 in a small, wave-two correction but once completed expect a strong move up. In fact the next time it gets support on/above the 80 prepare for long trades and short trades in the Euro and Pound. The SP500/DJI will eventually follow the Euro. When the Euro breaks the 130 and the Dollar is above 80 then the larger moves are confirmed.
In fact a strong dollar will also place pressure on stock and commodities, the Transports are already showing sign of a slowing market and economy we have been watching this for weeks now as you know.
The Dow and SP500 can make new highs but expect selling once the new highs are in. This would trigger all the bearish stops and we are considering this pattern as the Wave 4 ABC Expanded Flat.
As for the ASX200 the 4200 is the line in the sand as support and resistance but may take a good few days to sort out but this is key for the next move either up or down and is the simplest way to look at the market, if the last low at 41430 is taken out then we have a bear market.
The most important advice is to never let a loser get out of hand. You want to be sure that you can be wrong twenty or thirty times in a row and still have money in your account. When I trade, I’ll risk perhaps 5 to 10 % of the money in my account. If I lose on that trade, no matter how strongly I feel, on my next trade I’ll risk no more than about 4 % of my account. If I lose again, I’ll drop the trading size down to about 2 %. I’ll keep on reducing my trading size as long as I’m losing. I’ve gone from trading as many as three thousand contracts per trade to as few as ten. – RANDY McKAY
Today's Financial Events
Time Currency Detail Forecast Previous
18:45am NZD FPI m/m 0.0%
10:50am JPY Tertiary Industry Activity m/m 0.4% 1.4%
11:01am GBP RICS House Price Balance -13% -16%
11:30am AUD Home Loans m/m 0.0% 2.3%
11:30am AUD NAB Business Confidence 4
13th-16th NZD REINZ HPI m/m -1.4%
Tentative CNY Foreign Direct Investment ytd/y -0.3%
Tentative JPY Monetary Policy Statement
Tentative JPY Overnight Call Rate <0.10% <0.10%
5:30pm EUR French CPI m/m 0.4% -0.4%
Tentative JPY BOJ Press Conference
7:15pm CHF PPI m/m 0.4% 0.0%
All Day EUR ECOFIN Meetings
8:30pm GBP Trade Balance -7.8B -7.1B
8:30pm GBP DCLG HPI y/y 0.6% 0.1%
9:00pm EUR German ZEW Economic Sentiment 11.2 5.4
9:00pm EUR ZEW Economic Sentiment 3.8 -8.1
9:00pm GBP CB Leading Index m/m -0.5%
11:30pm EUR ECB President Draghi Speaks
11:30pm USD Core Retail Sales m/m 0.8% 0.7%
11:30pm USD Retail Sales m/m 1.1% 0.4%
1:00am USD Business Inventories m/m 0.5% 0.4%
1:00am USD IBD/TIPP Economic Optimism 53.2 49.4
3:30am CAD Gov Council Member Macklem Speaks
5:15am USD FOMC Statement
5:15am USD Federal Funds Rate <0.25% <0.25%
1. Check the ASX Dividend & Reporting section in the Member area 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.1
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02 Forex: AUDUSD – Latest Elliott Wave
AUDUSD 30 Minute Chart
Tuesday, 13 March 2012 at 3:49:00AM AEST
Aussie moved nicely lower since our past update, where we are still monitoring incomplete impulsive decline from 1.0670 top. Notice that recent price action was quite strong and sharp to the downside, which is usually an extended wave (iii). As such, we expect more weakness after any bounce in the coming hours; which will be only a blue wave (iv). Key resistance for wave (iv) comes in around 1.0545.
Projected target for Aussie is at 1.0400/20.
AUDUSD 4 Hour Chart
Monday, 12 March 2012 at 5:45:00PM AEST – more downside for A)
Aussie found resistance late in the past week around 1.0660 where wave 4 has probably reached a top. As such, our wave count remains unchanged; we expect further selling within wave 5 of A), towards 1.0400 support. Once this level is reach, we will have to be aware of a temporary low since we will then have five waves in A).
AUDUSD Daily Chart
11 March 2012 – corrective reversal lower
Aussie moved into a new high two weeks back as expected, but then reversed sharply from 1.0860 zone. Well, wave five did not move as much as we expected it will, but minimum requirements for a valid wave count are definitely here. And because of the bearish sentiment at the end of the week and broken trend line, we believe that wave (1) is finished and that we will see more selling in weeks ahead, within wave (2)! Currently, wave A) still in progress.
AUDUSD Weekly Chart
December 11 2011 – back to bullish mode
After some significant weakness seen a month back, pair reversed sharply from 0.933 region, bounced exactly from the upper base channel support line. As such, it seems that top of a long-term bullish trend is still not in place, and that impulsive sequence from 0.6 will continue, currently with wave IV in progress and wave V yet to come towards 138.2 and 161.8% extended Fibo levels.
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