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01  THE DAY AHEAD TECHNICAL ANALYSIS REPORT – 25 July 2012»
02   FOREX – USDCAD Latest 4 Charts»

Hi Traders 

INDICES LOOKING BEARISH

Indices: there are two ways to count (Elliot Wave count) the move down, but they are both bearish!

Either Wave (i) low is forming now or the alternative count is that we are entering Wave (iii).  

I prefer the Wave (i) ending now because of the TradingLevels – 12500 on the DJI for the low of Wave (i), 1330 for the SP500, 6300 for the Dax and then there is the weekly cycle "if Thursday is the bear day in the bullish weekly cycle then Thursday can pan out as the rally day in a bear market".

The next larger degree of structure (Elliot Wave) should take us lower to the 2 August.

Best Rgds, Pete

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01 Today's DayAhead Technical Analysis Report – 25 July

Market Drivers

Dow Jones 12,617 -0.82%
Base Metals Softer
US Spot Gold 1575
US Silver 2687
Oil WTI 88.45
US Copper CFD 334 
US Dollar CFD 84.16
EURUSD 1.2060
AUDUSD 1.0230
Dow Jones CFD 12,600
S&P500 CFD 1337
FTSE 100 CFD 5468
DAX CFD 6338
Shanghai 2146
ASX 200 SPI CFD 4100

European stocks ended a volatile trading session in the red on Tuesday, after Moody's cut its outlook on Germany, the largest economy in Europe, while investors continued to sell Spanish stocks and bonds.

Commodities

US Spot Gold 1575
TradingLevels: The 1572 of SG2 is still the support, the next step is for the 1580 to develop as support, if the 1572 becomes the resistance then the pattern creates a bearish bias, but otherwise it’s up to complete Wave (c) of e) or the impulse wave up before rolling over down. That said Silver is struggling to hold up and a move through 2650 adds weight to a bearish direction
Elliott Wave: Same - I’m still going with the large Elliott Triangle and the Wave e) still has another leg to complete, say to 1590, however using price, if the SG2 1572|1565 becomes the resistance then start scaling in with the target at 1500 the 1550 requires navigation, a bounce from this Midpoint back to 1565 is plausible before further downside

US Silver 2687
TradingLevels: The price is testing 2700 as resistance, this is the first stage of the bearish move and is part of the short trade set up to scale in with 2672 SG2 next followed by 2650. That said, technically the 2644 is require to be taken out to create the negative pattern, current the pattern is still technically bullish.

Oil WTI 88.45
TradingLevels: The first MinorLevel mTL8|88.00 is where the retest of 90 the MediumLevel would take place. Elliott wave, there are now five waves down from the 93 high to just below 88 this impulse wave should now be met with a counter trend in three waves an abc 5-3-5 Zigzag pattern, the normal retracement is 61.8% of the fall, however Oil follows stock so the rally would depend on a bounce back of stock. A rally to 90 - 91 should be expected wed Thursday.

Base Metals 
US Spot Prices (in l/b)
US Copper:           Last: 3.35-
US Nickel:             Last: 7.09+
US Zinc:                Last: 0.81-
US Aluminium       Last: 0.82-

US Copper CFD 334
There are two ways to the current low abc correction for Wave ii, but both point down, the price can range between 330 and 340 before moving lower through 320 and 310 to get to 300 (TL3)

Forex Trading 

US Dollar CFD 84.16
TradingLevels: The price is in the early stages of working through 84 with SG1 8410|8420|8430 as the holding zone and SG2 8380|8372|8310 as support for the correction that should start to unfold on Thursday
Elliott Wave:   There is still more upside to the impulse wave, that is five waves up from the 8278 last low, within the five waves the price is in the fifth wave and within this fifth wave there are another five waves, the price is at the top of the third wave, so not a lot more to go perhaps to 8430 – 8440 once the five waves are completed the we can expect an correction and abc three wave swing across 84 and once that is completed further upside towards 85

EURUSD 1.2060
TradingLevels: The price should weave thought the Midpoint 12050 then bounce around within SG1 12030|12020|12010 to 1.20
Elliott Wave: The five wave are still completing down to 1.20
Trading Strategies: Continue to short using the resistance of 12050

AUDUSD 1.0230
TradingLevels: Group1 1.03|1.02|1.01 the price is now in Group1, once the price finds 1.02 as resistance then the price will move below 1.00. 
Elliott Wave: Wave (i) was not completed and will be at 1.02 where we can expect a bounce on Thursdays as Wave (ii) 
Trading Strategies: The price will bounce around as it approaches 1.02. Expecting a bounce off 1.02 however if the 1.02 becomes the resistance then the structure is extending in the trend down and short positions would be taken

Index Trading 

Dow Jones CFD 12,600
TradingLevels:  Support 12500 expect a bounce, but once this level becomes resistance the market will move to 12,300.
Elliott Wave:  There are a few ways to count the bearish move down but either way they are bearish and the trend is down, we will talk of the two intraday bearish counts in the video.
Trading Strategies: The support off 12,500 is the important aspect and how high the price bounces back, the 618% is the 12,800, but the first level of supply is between 12650 and 12720

S&P500 CFD 1337
TradingLevels: Wave (i) can be completed at 1330 and Wave (ii) 61.8% retracement level is around 1360. The supply resistance starts at 1340 to 1350.
There is two ways to count the move down, both bearish, I will explain this in the video
Trading Strategies: Wait and see how much stream is in the bounce of the 1330 (top of SG1) The normal process is a bounce off 1330 back to 1240 where is fails and then staggers down into 1320 where is bounce back to test 1325|1330 and then moves down. The question is though, do we have Wave (i) low in place at 1330.

FTSE 100 CFD 5468
TradingLevels: Wave (i) completing down into 5400 SG1, If this is not Wave (i) then its Wave (iii) and will pick up speed to the downside

DAX CFD 6338
TradingLevels: Wave (i) completing down into 6300 SG1
Day Trading: Scalp the sublevels into 6300 until we can work out if Wave (i) completed into 6300 (6272 SG2)

Shanghai 2146
TradingLevels: Even though the price is edging down the price pattern is displaying a supporting pattern as it did a previous low Dec/Jan 1211 That said this low either here or down at 2100 or 20000 would be a wave three low with a wave four bounce

ASX 200 SPI CFD 4100
TradingLevels: Support on the 4100 (mTL) we can see a move down to SG2 4080|4072|4065 as support and to complete the structure down Wave (i) and then a bounce on Thursday
Day Trading:  Trading would be 4100 to 4080/72

Technical Analysis Summary

Indices: there are two ways to count (Elliot Wave count) the move down, but they are both bearish!

Either Wave (i) low is forming now or the alternative count is that we are entering Wave (iii).  

I prefer the Wave (i) ending now because of the TradingLevels – 12500 on the DJI for the low of Wave (i), 1330 for the SP500, 6300 for the Dax and then there is the weekly cycle "if Thursday is the bear day in the bullish weekly cycle then Thursday can pan out as the rally day".

The next larger degree of structure (Elliot Wave) should take us lower to the 2 August.

Quote

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Today's Financial Events  Australian Time AEST

Time       Currency   Detail                                Forecast    Previous
8:45am NZD  Trade Balance                             77M              301M  
9:50am JPY  Trade Balance                              -0.39T           -0.66T  
10:00am AUD  CB Leading Index m/m                -1.4%  
11:30am AUD  CPI q/q                                       0.6%            0.1%  
11:30am AUD  Trimmed Mean CPI q/q               0.6%           0.3%  
6:00pm EUR  German Ifo Business Climate         104.8        105.3  
6:30pm GBP  Prelim GDP q/q                              -0.2%          -0.3%  
6:30pm GBP  Index of Services 3m/3m                 0.3%         0.0%  
Tentative EUR  German 30-y Bond Auction           2.41           1.1  
8:00pm GBP  CBI Industrial Order Expectations    -11           -11  
11:00pm EUR  Belgium NBB Business Climate     -13.5         -13.2  
12:00am USD  New Home Sales                           372K         369K  
12:00am USD  Treasury Sec Geithner Speaks      
12:30am USD  Crude Oil Inventories                      0.0M          -0.8M

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: USDCAD – Latest Elliott Wave Analysis

USDCAD 1 Hour Chart
Wednesday, 25 July 2012 at 1:53:00AM AEST

USDCAD moved down to 1.0160 support as expected, from where sharp bounce occurred, into a new high. Price may accelerate sharply as we expect wave 3 rise. Invalidation level is now at 1.0156.

USDCAD 4 Hour Chart
Tuesday, 24 July 2012 at 5:02:00PM AEST – complex correction

No change!
USDCAD found the support late last week and is now showing impulsive personality from 1.0065 low, where we think that complex bearish correction labeled as wave B) found the base. it was a double zig-zag As such, bullish price action should now be udnerway, especially once makret breaches 1.0248 swing high.

USDCAD DailyChart
23 July 2012 – wave B) pull-back

In our past update we noted that wave B) from 1.0440 is incomplete and headed to 1.0050. Well, late last week prices hit 1.0065 and reversed sharply higher, clearly in impulsive formation on lower time frame. Thats an important evidence of a completed wave B), which means that market is ready for an uptrend continuation into wave C) of (E).


 

CADUSD Weekly Chart
28 May 2012  – wave X) triangle

USDCAD is trapped in 2-year range, between 1.1 and 0.94 levels. Thats the most typical characteristic of a correction, sideways price action that is part of a downtrend. As such, we are now tracking a wave X triangle which should complete in this year and then cause another selling within wave Y of B).

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