17 April
Technical Analysis Report Weekly
Hi Traders
ROBOTS VS THE ANALYTICAL TRADER: WHICH TACTIC IS MORE USEFUL?
Robots that trade sound easy and quick. Is that why are they so popular? The trouble is they rely on the markets moving in a programmed way, all the time!This can be good for a while, but market patterns are prone to changes in personality.
Markets behave in a chaotic way, you know, like life! So if we have a human eye on the markets we're probably going to be able to make adjustments to these chaotic movements more realistically than the robots that have been made to "set and forget".
So are machines mightier than man? We think that the human eye and mind applied to the market may just be more flexible and more accurate in reading the changes!
Best Rgds, Pete
PS. ASK ME A TRADING QUESTION HERE!: 0434 288 367 or 02 4448 6020.
or email me
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01 Today's DayAhead Technical Analysis Report – 17 April
Market Drivers
Dow Jones 12,953 +0.80% (6AM AEST)
Base Metals Mixed
US Spot Gold: 1650
US Silver: 31.50
Oil WTI: 102.90
US Copper CFD: 362
US Dollar: 79.50
EURUSD 1.3134
Dow Jones CFD 12,950
S&P500 CFD: 1372
FTSE 100 CFD: 5680
DAX CFD: 6650
Shanghai 2357
SPI CFD 4292
News
"The market's trying to decide who's going to win the tug-of-war battle between US earnings and Europe."
US Commodities
US Gold CFD: 1650
TradingLevels: The Elliott wave has a possible corrective path down to 1600 and while the price is under 1650 this has to be taken seriously. The move down will be an impulse wave but part of a larger corrective wave, so it will be in five waves, This would also put Silver at 30.00 once this is over the price can move back above 1650 and continue on the bullish count. There is also another count that would only take it down to 1630. At this stage we have not seen the price reject 1650 but it is like within two sessions
Any Long Gold Positions should be covered at this point in time.
Elliott Wave: Because there wasn’t a breakout into a new high the March April trend down is still creating lower highs, the pattern of the move down does appear corrective but it can move lower to 1600 before moving up.
US Silver: 31.50
TradingLevels: Expect a retest close to 32.00 (SG2 3172) then a move down which could be sharp.
Elliott Wave: The 30.00 is the 61.8% retracement level
Oil WTI: 102.90
TradingLevels: Basically the bounce off 100 is still unfolding in its own way and as long as it stays under 105 the Elliott count is downwards.
Elliott Wave: Oil prices lost some value in the past few sessions, which for now is playing out nicely with bearish scenario after we called an expanded flat in wave (ii). Unfortunately fall from 104.20 is not in five yet, but it could be unfolding if intra-day swings will hold.
Base Metals
US Spot Prices (in l/b)
US Copper: Last: 3.66+
US Nickel: Last: 8.02-
US Zinc: Last: 0.90+
US Aluminium Last: 0.92+
US Copper CFD: 362
It does look like five waves down from the high on the 3rdApril above 390 to the current low, therefor we should expect an ABC rally another retest into SG2 zone the 372 – 380 is the 50/62% retracement level. The main point here is that the move up is a rally and we will track the pattern 5-3-5 ABC structure then look to short. This will however give the Materials sectors a lift and part of the bounce for the CRB off the Major TradingLevel TL3/ 300 The ASX200 should also lift off the 4300
Forex Trading
US Dollar: 79.50
TradingLevels: The price is not supported on the Major TradingLevel 80 (TL8)… yet.
Elliott Wave: The current move down in the dollar should find support into the 79.50 as the Euro finds resistance into 13150 – 13172/80
EURUSD 1.3134
TradingLevels: The 130 bounce is rather high but still in line with the current wave count down. There is another wave count that we can consider, it’s still bearish but can see a move above 132 before moving lower.
Elliott Wave: Current wave count would keep the price under 13172 and the second wave count would keep the price under 13272
Trading Strategies: If the price develops support on top of 13130 then 132 can be tested. From a trading point of view, it’s safer to observe the first bounce and find the first high, if the fist high is in three waves then that’s the top if the bounce is in five waves then there will be another bounce with a matching high if not higher as an abc pattern
AUDUSD 1.0360
TradingLevels: The 10272 support then 103, if support can be found on 10372 then trade from that support. The move down from the 10450 high has found support at 10310 the 61.8% retracement level
Elliott Wave: Aussie is showing some strength from daily low but nothing important so far. We need a clear impulse up and 1.0427 breaks for bullish trend, which however is expected to occur while 1.0224 invalidation level holds. We assume that pair will reach 1.0450 this week.
Trading Strategies: Look for long trade setups, the 104 as support is the safest, 10372 is also a good start just expect a reaction at 104. It does need to be pointed out the move up is not confirmed by the next larger degree and if the SP500 rolls over it can take the AUD with it, but there is not a relationship with the SP and AU at the moment, the AUD can be more with the ASX200 for the time being.
Index Trading
Dow Jones CFD 12,950
TradingLevels: The pattern from the last low is corrective it can go to 13100 the 61.8% roughly but the bias it to stay under 13,000 and move lower then 12,700
Elliott Wave*: ABC Correction as Wave (ii) Wave Once completed then Wave (iii) will be underway, which is could be now a move under 12900 would be a start
Trading Strategies: Short the second failed retest of any move down
*See Elliott Wave education
S&P500 CFD: 1372
TradingLevels: The SP has stayed lower than the Dow which is a show of general weakness any move up would be a corrective rally. However traders should use 1372 (72) as support or resistance and be on the right side of this
Elliott Wave: A series of wave two’s are unfolding and abc counter trend of 1360 and a abc off 1365, The 618% is just above 1380
Trading Strategies: Short a failed retest of 1365 you can also work the 1372 just make sure your working the retest, use the volume on the retest to support the strength or weakness
FTSE 100 CFD: 5680
TradingLevels*: Resistance 5772. Support on 5730 SG1 can see the price to 5750. The 5720 can hold the price to 5700 for a larger correction with 5672/80 (SG2) as the support
Elliott Wave: The move up of the last low on the 11th 5538 is corrective once it’s completed the next leg down will start
Trading Strategies: Use the 5650 as resistance to short. If the price moves higher above 5700 we will look for the short above there and if that is the case then we will have to count five wave up from the 5623 last low, so the move from 5623 to 5700 would be wave one, only think like that if 5700 becomes the support.
The other element is using SG2 as support or resistance to base the trade (SG2 5665|5672|5680) the 5672 is the most important
*Learn more about our unique TradingLevels through this »introductory article and videos
DAX CFD: 6650
TradingLevels: Expect a larger wave four corrective pattern at 6500 MediumLevel
Day Trading: The bounce last night is in five waves so expect a pull back and another five waves up The SG1 as support 6630 creates the next level as the target 6650 support on this Midpoint creates the 6672 support this creates the 6700 as the target, the normal day trading level stuff
Shanghai 2357
TradingLevels: Same -The 61.8% rally target is around SG2 2365|2372|2380. I also think we can look to the Shenzhen as a retest of 1000 TL1 event though the 618% is a tad higher the 1000 would be the psychological price point for the region. We are expecting a turn down from here
SPI CFD 4292
TradingLevels: The price is vibrating across 4300 this is a positive and a possible Wave iv) but this would only be confirmed with a high above 4335.
Day Trading: long on 4310 and then 4320, if the top of SG1 4330 can develop support then 4350 is the target. The 4350 is the Midpoint and if support on this level can find support then 4400 is the target, with 4372 as a short term resistance.
Technical Analysis Summary
The S&P500 has a series of five waves down and three waves up. The direction of the five waves gives you the direction of the market and that is down. Three waves up are simply corrective counter trends confirming the downwards direction. Therefore the US Indices are at least short term bearish, even though they are up overnight in their counter trends.
Trading Quote
"Optimism means expecting the best, but confidence means knowing how to handle the worst."
– Max Gunther
Today's Financial Events
Time Currency Detail Forecast Previous
11:30am AUD Monetary Policy Meeting Minutes
11:30am AUD New Motor Vehicle Sales m/m 0.0%
17th-18th NZD REINZ HPI m/m 0.8%
17th-18th CNY Foreign Direct Investment ytd/y -0.6%
2:30pm JPY Revised Industrial Production m/m -1.2% -1.2%
3:00pm JPY Household Confidence 40.1 39.5
6:30pm GBP CPI y/y 3.5% 3.4%
6:30pm GBP RPI y/y 3.6% 3.7%
6:30pm GBP Core CPI y/y 2.4% 2.4%
6:30pm GBP DCLG HPI y/y 0.4% 0.2%
7:00pm EUR German ZEW Economic Sentiment 20.2 22.3
7:00pm EUR CPI y/y 2.6% 2.6%
7:00pm EUR Core CPI y/y 1.5% 1.5%
7:00pm EUR ZEW Economic Sentiment 10.7 11.0
10:30pm CAD Manufacturing Sales m/m -0.1% -0.9%
10:30pm CAD New Motor Vehicle Sales m/m -2.3% 15.4%
10:30pm USD Building Permits 0.71M 0.72M
10:30pm USD Housing Starts 0.71M 0.70M
11:00pm CAD BOC Rate Statement
11:00pm CAD Overnight Rate 1.00% 1.00%
11:15pm USD Capacity Utilization Rate 78.6% 78.7%
11:15pm USD Industrial Production m/m 0.4% 0.0%
11:30pm EUR ECB President Draghi Speaks
12:30am GBP MPC Member Posen 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 INTERNATIONAL COMMODITY – OIL: Latest Elliott Wave
OIL 1 Hour Chart
Monday, 16 April 2012 at 6:45:00PM AEST
Oil prices lost some value in the past few sessions, which for now is playing out nicely with bearish scenario after we called an expanded flat in wave (ii). Unfortunately fall from 104.20 is not in five yet, but it could be unfolding if intra-day swings will hold.
OIL 4 Hour Chart
Monday, 16 April 2012 at 5:40:00PM AEST – channel break will cause aggressive selling
No change!
We are still monitoring and observing a potential start of a new impulsive bearish trend, which should be confirmed and accelerate once/if current support line of a trading channel gives way. This will then put wave three of three into action, based on our current one-two one-two interpretation.
OIL Daily Chart
15 April 2012 – top forming!?
No change!
Oil reversed lower in the past few weeks, and broke through very important trend line, connected from 2011 lows which is an early signal for a potential "trend change". In fact, we have an A)-B)-C) up from 74.80 low in wave (II), but we still cannot count impulsive fall from a top, which means that any bears remain unconfirmed! However, this will change if lower support line of a current channel is broken around 99-100 area (circled).
OIL Weekly Chart
11 December 2011 – downtrend in progress
Oil reversed perfectly lower in the past few months from 115 resistance region, where we believe that wave B) found a top since prices collapsed through the lower support line of a corrective channel. As such, wave C) is underway, with prices headed towards the levels seen at the start of 2009.
Currently, we are monitoring a corrective rally which should stop at the channel trend-line; support becomes resistance at current levels!
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