Technical Analysis Report Weekly
OUR ROBO STRATEGY IS DELIVERING SOME SURPRISING RESULTS
For some months Pete has been tracking his Robo trades on the CBA and as you can see from the graph, its looking good so far – with the rest of August and September now included! We're about to finalise the results from Oct - Dec so we'll let you see that next week.
We want to show you how we got this result – Pete has been working and developing the Robo strategy for quite a while now. The advanced Robo Method requires that you are there for the first half hour of the opening so you can apply Defensive and Attacking tactics to tighten and improve your skills and returns.
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01 Today's DayAhead/EarlyBird Technical Analysis Report – 1 February
Dow Jones 12,616 -0.29%
Base Metals Negative
US Gold CFD: 1736
Oil WTI: 98.68
Copper CFD: 378
US Dollar: 79.40
Dow Jones CFD 12,610
S&P500 CFD: 1308
FTSE 100 CFD: 5705
DAX CFD: 6487
SPI CFD 4264
NEW YORK (Dow Jones) – US stocks fell Tuesday, with the Dow Jones Industrial Average on pace for a fourth-straight decline, after a weaker-than-expected reading on U.S. consumer confidence erased earlier gains from agreements meant to address Europe's ongoing sovereign-debt issues.
US Gold CFD: 1736
Technical Analysis: Same - SubGroup1 (SG1)* 1710|1720|1730 if the price finds support on top of SG1 1730 then expect the price at 1750, if the 1720 (pivot) becomes resistance expect the price back at 1700
Elliott Wave: The price pattern above 1710 is starting to display overlapping wave structures, this creeping along price action is weakness. each small structure is an impulse wave, so its positive from that perspective, but you need to work out what risk you want to take on board if your long.
Silver: The trend is still up but weakness or a larger correctional pattern is starting, protect long trades. Any shorting keep stop above the high. The flip side is the US Dollar being at the Wave A low?
*See TradingLevels article
If the 2972 becomes the retested resistance then short, if the 30.00 becomes support then scale in long through SubGroup1* (SG1). *See TradingLevels article
Oil WTI: 99.65
TradingLevels: Long with a break above 101 and short under 98.
Elliott Wave: The price has been testing high again at the 101 and continues to meet supply unable to gain support on 100 and the 98 is still the support.
The pattern is still really working with 100, however most of the time is spent under the 100, so the bias is bearish, so we can start to look for 99 to become the resistance, the retested resistance and look to add a small short position and then if the 98 is broken then short the retest
US Spot Prices (in l/b)
US Copper: Last: 3.78-
US Nickel: Last: 9.44-
US Zinc: Last: 0.95+
US Aluminium Last: 0.99-
Copper CFD: 378
As mentioned yesterday, expecting a move down to 372 as a wave four, before another push higher. As long as the wave four stays in Subgroup2 SG2 365|372|380 then the wave four is fine, but if the price moves below the 365 and especially as a failed retest, then we have a larger top in play, this is important because it would affect the Materials sector, we also have to remember that a possible top can be in place for the US Indices, I don’t have evidence of this yet but we have to be mindful and that is also including the copper/ base metals into the picture.
As a wave four the 38.2% retracement is the 372 and the 50% is the 365. The 4th wave of one lesser degree is also the 372, so this is key. We can also create a trend channel up, but its normal for the fourth wave to break the channel then move higher
We have some strong USD gains across the board, as Risk Trade moved lower after poor reading of CB Consumer Confidence index that came out 61.1; well below 68.2 expectations. Euro is suffering the most when compared to other majors, down almost 1% against very strong Gbp today.
Forex US Dollar 79.40
The Wave A low has developed further as a low, there is still a long way to go, but the 79 now offers a possible low and a price to work with. If this is the low then we are looking at a Wave B rally and the first step is the retest of (TL8) 80. The Wave B normally retraces 61.8% of the Wave A, but the supply is at 80 and that should be the first focus.
The flip side and the down side would see a sideways pattern sitting on 99 to 9972 then drop lower through 99, so the developing structure of the pattern above 99 is also of interest, so far it looks positive to the upside as it appears to have five small waves, impulse.
If this does push up, then Euro, Indices, gold etc will move lower. On a finer note look for a retest and support in the SG1 of 99, the 9920 and 9930 as support, if this fails to hold as support then the (a) (b) (b) on the Euro charts is correct and the Euro will push higher from the above the 130 making new highs above the 132 and the Dollar will move lower through the 99
Forex EURUSD 1.3080
TradingLevels: The price is moving up to 131, if the 131 finds support then scale in through SG1. Considering the wave count and that is the current Wave (c)* down, it can test 131 as a wave four and then have a run down to 130 as wave five of the Wave (c), so the support on 131 is a critical, you should also study the wave structure up to 131 try and work out if its impulsive or corrective
Elliott Wave: The (a) (b) (c) above 130 is nearly completed
Trading Strategies: Long on 131 as support. It would also be wise to look at the US indices, the Dow being above 12,600 would be helpful in trading the Euro long and the US Dollar if it trades under 99 then add to the Euro longs. If the retest of 131 fails and the price moves down to 130 then that should be the low of the Wave (c) so study the bounce and level to enter there. *See Elliott Wave education
Forex AUDUSD 1.0580
TradingLevels: The 106 as support or resistance is the line in the sand, I say this because a possible top can now be in place, this market will move with the US Indices and you know we are trying to work out if we have a top there or just a bullish corrective pattern and we still don’t know for sure
Elliott Wave: The move up yesterday that we were looking for unfolded and now the price is correcting down, we now need to work out is the move down is just that a abc corrective pattern or a larger correction back into 105 for a larger correction there.
Trading Strategies: expect a bounce of 10572 back to 106 then down, if I’m wrong then look for support on 10630
Annoucements 12:00pm CNY Manufacturing PMI 49.8 50.3
Dow Jones CFD 12,610
TradingLevels: If the price moves under the 12,500 then a larger bearish picture is emerging. Support back up on 12,650 is a positive sign. So the price will now work into a corner, the last intraday high and low are the triggers
Elliott Wave: We are in a pattern that can be bearish or bullish, let’s just give it time to develop the last intraday high and low are reasonable triggers for the next direction
Trading Strategies: Day Trading – Long if 12,650 develops as support, the short is tricky as it would bounce around a lot of the 12500 in the normal flow of the markets however a break lower will probably be a headline driven, so a sharp drop, but basically a drop below the last low 12530 triggers the short
S&P500 CFD: 1308
TradingLevels*: Keeping it simple would be Long if the price finds support on 1320, the downside has a fair bit of bouncing to do , if the price moves down close to 1300 again then a bounce back to 1310 then down again, so look for the short trade
Elliott Wave: Same - We have to follow two wave counts, one is a top is in place and the market will roll over down and the other is a larger corrective pattern across 1300 (and below) in three waves ABC and then move up making new highs
Trading Strategies: Yesterday was easier to see the direction, today not so easy, there are two possibilities, tomorrow should be easier. If a move lower under the 1306 occurs then you have five waves down from the last high near 1321 and this five waves would see a three wave counter trend 50/60% then down again.
If the 1306 stays in place then you have three waves down fro the 1321 and if this is the case new highs would be made not only above 1321 but 1333 *See TradingLevels article
FTSE 100 CFD 5705
TradingLevels: If 5720 finds support then think of being long and also the top of SG1 5730, this is also the first supply level so if it can find support on the 5720/30 then this is a sign of strength. The 5730 and 5750 are the 50 and 62% retracement levels so do not over trade on the long side as these are turning points, IF the 5750 finds support then these adds another layer of strength
Elliott Wave: The move down from 5800 to 5650 if this move is in five waves (impulse) the we are now in an abc rally up 61.8% 5750. If the move down from 5800 to 5650 is in three wave abc corrective then new highs above 5800 will be made. It’s not clear to me if the move down from 5800 is in three or five waves. This is the same for the Dax but the 6500 MediumLevel for the Dax is very useful as support or resistance this can be a great key
Trading Strategies: wait!
DAX CFD: 6487
Technical Analysis: Same, Give the price a few sessions at 6500 MediumLevel, lets simply see if this level develops support or as resistance. The real support is still at 6400, so above this the Dax is positive below negative
SPI CFD 4264
TradingLevels: As long as the 4250 and 4230 can stay in place as support the market is positive even though it’s under the 4300. Under 4250 is a negative for day traders
Elliott Wave: Unsure. The pattern under 4300 is corrective but how much will it expand is another question
Day Trading: The range is getting narrow, the 4280 and the 4250 are the support and resistance. The price will bounce in this range and also the 4272 and the 4265 will become part of the thinning range, you just have to observe the price action in this space. You should also observe the Euro, Dollar, Dow and the Shanghai opening for clues in direction as the base metals are correcting.
The 4272 is the balance line and the price being under this creates a negative bias, but there is support from the 4250 and 4230, so I suggest simply observing the unfolding pattern until you can see a pattern you can recognise and a price to work off
Announcement 12:00pm CNY Manufacturing PMI 49.8 50.3
US Indices The reaction from the 12,800 (mTL8) on the Dow is a pattern that I’m still tracking to work out if its bullish corrective or impulse bearish and I still need to see more of it. If it takes out the last low around the 12530 then a larger pattern is unfolding but can still be the bearish or bullish pattern. The 12500 as support or resistance can help us to view the market as positive or negative.
Europe I think the Dax is the best market here as it’s working with the MediumLevel 6500 we still need to give it time here, but very shortly it will become the support or the resistance and this will create the long or short trades and also help with the currencies. If I had to guess, then I could say the price is sticking to the 6500 and not rejecting it, so this is a bullish sign this in turn can see the Euro up and therefor the US Indices and the AUD
China The Manufacturing figures today will be the catalyst for moving the ASX
Australia The price is struggling at the 4300 and that’s ok as the main support is the 4200 as long as the 4200 stays as support the ASX is positive.
"I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade" – Richard Dennis
Today's Financial Events
Time Currency Detail Forecast Previous
8:00am AUD AIG Manufacturing Index 50.2
Tentative AUD HIA New Home Sales m/m 6.8%
11:30am AUD HPI q/q -0.7% -1.2%
12:00pm CNY Manufacturing PMI 49.8 50.3
12:30pm JPY Average Cash Earnings y/y -0.3% -0.2%
1:30pm CNY HSBC Final Manufacturing PMI 48.7
4:30pm AUD Commodity Prices y/y 10.9%
6:00pm GBP Nationwide HPI m/m -0.1% -0.2%
7:15pm CHF Retail Sales y/y 1.6% 1.8%
7:30pm CHF SVME PMI 52.0 50.7
8:00pm EUR Final Manufacturing PMI 48.7 48.7
8:30pm GBP Manufacturing PMI 50.2 49.6
9:00pm EUR CPI Flash Estimate y/y 2.7% 2.8%
12:15am USD ADP Non-Farm Employment Change 193K 325K
2:00am USD ISM Manufacturing PMI 54.6 53.9
2:00am USD Construction Spending m/m 0.9% 1.2%
2:00am USD ISM Manufacturing Prices 49.5 47.5
2:30am USD Crude Oil Inventories 3.6M
All Day USD Total Vehicle Sales 10.6M 13.5M
Tentative USD Loan Officer Survey
Australian Corporate Calendar
Wesfarmers Ltd (WES.AU) Q2 2012 Sales
Regis Resources (RRL.AU) December Quarterly Report
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: USDollar Index – Latest Elliott Wave
Dollar Index 4 Hour Chart
Tuesday, 31 January 2012 at 5:55:00PM AEST – lower prices for wave A)
Dollar index is still looking bearish, now ready to make a new fresh lows around 78.40 channel support line, where wave 5 may complete an impulsive red wave A), before market reverse into a pull-back; corrective wave B). But that reversal would be confrimed only by a broken resistance line. Until then, trend is bearish.
Dollar Index Daily Chart
29 January 2012 – pull-back lower
A sharp fall from 81.80 area seen in the past few weeks is impulsive, which means that we have a temporary top in place, likely of a wave I, which was an expanding diagonal. That is type of a motive wave, where structure allows overlap between waves four and one. With this being said, at least three waves of a pull-back is now underway within wave two, which will ideally reach 50-61.8% retracement area and then reverse from.
Dollar Index Weekly Chart
02 January 2012 DOLLARINDEXWeekly – strength to come
Dollar index moved significantly higher in the past few weeks after a breakout through the trend line resistance connected from 2010 pick. As such, decline from wave X high is identified as a three wave move, part of a huge corrective wave B/2 that started back in 2008. Notice that the whole price structure from 2008 is trapped between two parallel trend lines and that moves were quite choppy during this period. In fact, recent bullish reversal occurred exactly from the lower support line of that channel, which in many cases forms an end of a corrective price action. As such, we believe that wave B)/2 is done, which was a complex double three formation and that dollar will trade much higher in coming months if not years, with wave C)/3) towards 88/90 area.
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