Technical Analysis Report Weekly
 

01    TECHNICAL ANALYSIS – Today's DayAhead Report – 1 May 2012» 
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Hi Traders 

RIGHT NOW, WHATEVER YOU DO, KEEP POSITION SIZING SMALLER!

We expected some softening in the SP500 at these highs, but its still too early to say if a Wave B top is in place or we just have a small corrective pattern down. We still need to see more of the pattern in this area. So, the idea is, whatever you do, keep position sizing smaller.

The ASX200 is taking its lead from the US rather than China at the moment… The PMI Manufacturing figures are out today from China and the Flash figures last week were up so today should be up. This will already be priced in but should keep a support in the ASX market. The RBA will also announce the Cash Rate, which is expected to drop 25 points, but that’s a real guessing game.

Best Rgds, Pete
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01  Today's DayAhead Technical Analysis Report – 1 April

Market Drivers

Dow Jones 13,213 +0.11%  (6AM AEST)
Base Metals Positive
US Spot Gold: 1663
US Silver: 31.00
Oil WTI: 104.50
US Copper CFD: 382
US Dollar: 78.85
EURUSD 1.3240
AUDUSD 1.0420
Dow Jones CFD 13,200
S&P500 CFD: 1397
FTSE 100 CFD: 5730
DAX CFD: 6772
Shanghai 2396
SPI CFD 4390

Important note: May 1st there will be no Forex updates due to a Labour Day in Europe. All the 4 hour Daily Weekly charts have been updated

Commodities Trading

US Spot Gold: 1663
TradingLevels: This is interesting, as we are working with a bearish Elliott Wave count, but the price is above the MediumLevel 1650 and has completed one retest of 1650 as support and has been successful as support. Still we will give the Elliott count time to play out and we would also want to see want the SP500 is going to do at it’s current high, we are waiting to see if we see an impulse wave down which would confirm a Wave C down for the SP500 and would expect Gold to follow if that was the case, so a little more time to confirm these moves
Elliott Wave: Despite an extended bullish structure on gold, we think that recovery from 1622 is still only wave E, part of a larger B) triangle, which should end very soon, around current 1670 resistance area. We however need an impulsive fall, while 1680 holds that will confirm our bearish outlook. 1680 is invalidation level.

US Silver: 31.00
TradingLevels: Silver found the supply at the 31.50 and is now retesting the demand from the bounce off 30.00 this leaves 3100 as the line in the sand as support or resistance, so observe what develops at 3100 and work the trade from that price also using SG1 and SG2 above and below 31.00 to refine the entries. Keep trading targets short term until we find the trend in the SP500
Elliott Wave: The bounce off 30.00 appears to be in five waves either a Wave A or 1 the pullback Wave B or 2

Oil WTI: 104.50
TradingLevels: The 105 resistance is still holding firm and what happens here will depend on the SP500
Elliott Wave: Oil is trading very close to its highs and to 105.00 resistance level, but despite this rally you will have difficulties to count a recovery in impulsive way. In fact, an overlapping price action and divergence on the RSI suggests that this is an ending diagonal placed in wave c). Resistance comes in at 105.60, but fall beneath103.60 will already be a signal for a top in place

Base Metals

US Spot Prices (in l/b)
US Copper:           Last: 3.85-
US Nickel:             Last: 8.09-
US Zinc:                Last: 0.92+
US Aluminium       Last: 0.93-

US Copper CFD: 382
On the hourly chart Copper has the same price action as the SP500, the trends are very close, expect the Copper has another move higher and the SP500 does not, I guess one of them is wrong.. when I look at the actual DJI intraday it too can have another move higher, any way we just have to wait and see, we have to stay with the wave count on the SP500 as that is the most important.

Forex Trading

US Dollar: 78.85
TradingLevels*:  Now that the price is under 79 the next target is 78.50 followed by 78 the MinorLevel mTL8, the GBP is pushing higher in a third wave so we can expect dollar to move lower
Elliott Wave: See the new bearish daily and weekly charts for the US Dollar on the TradingLounge site (if you're a Member!)
*Learn more about our unique TradingLevels through this »introductory article and videos

EURUSD 1.3240
TradingLevels: The daily overhead trend line is the resistance around the 1.33, you can easily see the resistance in the price action towards this price, we have relabelled the larger Elliott count to sit more comfortably with other currencies and Indices.
Elliott Wave: Euro is back at the highs, so it’s more than obvious that bulls will not give up so easily. Based on that new impulse up, euro actually formed an expanded flat correction in wave b). As such, wave c) of a second Zigzag is now approaching to resistance see around 1.3300/10 level. As always, I will keep an eye on for evidence of top in that region.
Trading Strategies: short term day traders, while the 132 is support then the pattern is supported, the next step in the ladder is SG1 13230 as support, then 13250, if support is found on the Midpoint then 13250 then expect next highs above 133. The SG2 13272 is the main sublevel resistance in the SG2 13265|13272|13280

AUDUSD 1.0420
TradingLevels: The price failed to get above the SG2 10472 and fell in line with the SP500, the move back to 104 suggests the top of that trend up, the normal process up is what occurred at 104 previously. We can expect support here at 104 and the SG2 below 104 at SG2 10380|10372|10365
Elliott Wave*: If we get five waves down from the SG2 10472 highs to 104 then after a bounce we can expect another five waves down into the 50/62% area around 10350
Trading Strategies: The current move down is three waves (bullish corrective) if we see a move below 104 then we have five waves down, this means three back up and then another five waves down to the 10350 area. So if its only three waves down abc then support on 10430 SG1 can create the long trade.
The RBA Rate today!ow 
*See Elliott Wave education

Index Trading

Dow Jones CFD 13,200
TradingLevels:  We would need to see a move under 13,100 at least to have a bearish outlook, a certain amount of softening here at this high was expected either way, we need to see more of the pattern in this area before judging it either corrective or impulsive
Elliott Wave:  Same -Top of Wave B?
Trading Strategies: It does appear to be five waves down in the last session, if this is correct then a 50/62% retracement up then down again.
If support is found on top of SG1 13,230 then this is a bullish situation, the really would be expected to be completed at 13,230
In the next degree higher its about the MinorLevel mTL2 the 13,200 as support or resistance to create the long or short trade, however waiting for at least three swings from the high before making that decision

S&P500 CFD: 1397
TradingLevels: Same, as it just needs time to develop at 1400: Simply allow the price time at 1400, we can expect a certain amount of vibration across this price, however the trade signal will come from the price developing as support or resistance
Elliott Wave: Wave B top at 1400; It does appear then we have five waves down from the high, so expect a three wave counter trend up then another five down, this 5-3-5 structure can still be part of a bullish corrective pattern , so this also needs time to unfold before we can really call it
Trading Strategies: Understand the current  wave structure down from the high and work any trade with the understanding of this wave structure and use the tradinglevels as reference price points for the trade. Or use the 1400 as support or resistance to trade from, especially the retesting of that price

FTSE 100 CFD: 5730
TradingLevels: The historical support is around the 5730 to 5700, expect a consolidation or bounce
Elliott Wave: The move down appears to be impulsive, so expect a counter trend in three waves then another five down, the safe short trade would be when the 5700 is resistance or that 5700 – 5730 range is resistance
Trading Strategies: Support above 5700, so observe any bounce to see if it corrective (overlapping waves structures) if so look to short the abc rally. It is a bit messy here so use the count on the Sp500

DAX CFD: 6772
TradingLevels: The corrective process at 6800 (mTL8) is unfolding and n the end the 6800 will become the support or resistance and this creates the trade direction.
Day Trading: We need to give it time at 6800 we need to see at least three swings from the high.
Shanghai 2396
TradingLevels: China had a holiday yesterday, the price pattern is still and ABC correcting. PMI figures out today

SPI CFD 4390
TradingLevels: The patterns at 4400 are corrective so the price should make a new high that said the tricky bit is that corrective pattern like this one and especially on this market can simply repeat and therefor expand. As long as the 4365 or 4372 hold then the direction is up, but you know the price is under the closest largest number as resistance 4400 so the bias is negative, meaning the risk is higher to be long, if the price was above the 4400 then the bias would be positive and the trade risk more acceptable, there is no point in taking on unnecessary risk
Day Trading:  As long as the SG2 4380|4372|4365 holds as support then the price can move above 4400

Technical Analysis Summary

See the letter above.

Trading Quote

"Look for the setup that scares you the most. That's the one you probably need to trade. Don't expect to feel comfortable until an active position finally closes out. If it feels too good, everyone else will trade it the same way and become the crowd."

Today's Financial Events 

Time        Currency Detail                                    Forecast    Previous
8:45am     NZD        Labor Cost Index q/q             0.6%           0.7%  
9:30am     AUD        AIG Manufacturing Index      49.5  
All Day     CNY        Bank Holiday      
11:00am   CNY        Manufacturing PMI                53.6             53.1  
11:30am   AUD        HPI q/q                                  -0.3%           -1.0%  
2:30pm    AUD        Cash Rate                              4.00%          4.25%  
2:30pm    AUD        RBA Rate Statement      
All Day     CHF        Bank Holiday      
All Day     EUR        French Bank Holiday      
All Day     EUR        German Bank Holiday      
All Day     EUR        Italian Bank Holiday      
4:30pm    AUD        Commodity Prices y/y             2.7%  
1st-4th     GBP        Halifax HPI m/m                     1.2%            2.2%  
6:30pm    GBP        Manufacturing PMI                 51.4             52.1  
12:00am  USD        ISM Manufacturing PMI          53.0            53.4  
12:00am  USD        Construction Spending m/m   0.5%           -1.1%  
12:00am  USD        ISM Manufacturing Prices      59.2             61.0  
All Day     USD        Total Vehicle Sales                14.5M          14.4M  
2:30am    USD        FOMC Member Lockhart Speaks      
3:05am    CAD        BOC Gov Carney Speaks      
Tentative  USD        Loan Officer Survey

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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