Technical Analysis Report Weekly
 

01  Today's EarlyBird Technical Analysis Report 29 February 2012» 
02  Forex: GBPUSD – Latest Elliott Wave»
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01  Today's EarlyBird Technical Analysis Report – 29 February

Market Drivers

Dow Jones 12,992 +0.08% (630AM)
Base Metals positive
US Gold CFD: 1787
Oil WTI: 109.66
US Copper CFD: 387
US Dollar: 78.28
EURUSD 1.3450
AUDUSD 1.0756
Dow Jones CFD 12,995
S&P500 CFD: 1368
FTSE 100 CFD: 5920
DAX CFD: 6871
SPI CFD 4269

News
US stock-market indexes held gains in afternoon trading after shaking off a choppy morning on mixed economic data, with the Dow once again flitting around the 13000 level.

US Commodities 

US Gold CFD: 1787
Technical Analysis:
TradingLevels: Once support has been retested on top of SG 2 1780 the price will move higher to 1800 (mTL8). Above 1800 the MinorLevel is SG1 1810|1820|1830 when the price moves up into SG1, its job is to hold the price to 1800, this creates the first high above the level, which is normally the fifth wave, once the first high is in place then the ABC correction will start and in the case a larger Wave 4, even eventually 1800 will become the support and this is the timing to trade long to the next level, but of course short term traders can trade in and around the corrective pattern.
Elliott Wave*: Gold found the support yesterday at 38.2% Fibo level and also at wave iii highs of one lesser degree. These are all typical guidelines of a corrective wave (iv), so further uptrend with wave (v) headed towards 1790/1800 area is expected for the coming sessions. Start counting the five wave impulse structure up the last low waves, 1, 2 are done  and 3 is under way with that strong move up
*See Elliott Wave education

Silver 
TradingLevels*: The price breaks through the old trendline and moves higher quickly, This is now a clear retest of the MediumLevel ML4 | 40.00 There is of course 38 the first MinorLevel that will see profit taking. For intraday traders there are smaller levels 3772, 3720 and of course 3700
Elliott Wave: The Wave (iv) finding 35 as support, there’s a good chance the wave four is completed and wave five up is under way *See TradingLevels article

Oil WTI: 109.66
TradingLevels: Now on trendline support, which will support at least for the short term but as mentioned yesterday Wave four normally breaks the trendline, if the price can find support back on 108 then it has a good chance to move higher above 110 (mTL1) as Wave five, meaning Wave four can now be completed, but as you know wave fours can expand in time more so than price. but all in all, this is a bullish corrective pattern, once the price does make the first higher above the levels 110 then a larger ABC correction will unfold across 110, once that finds support then the price can move up again to the next level
Elliott Wave: Oil made a nice push lower yesterday during the US session, about we warned you in wave B pull-back that found the peak at 109.30. As you know we are monitoring larger incomplete bullish trend, so current pull-back is likely a wave 4) with wave 5) ahead. Ideally, wave 4) will look for a support in the former wave four of a one lesser degree, which was not the case on the our chart. But despite higher supports we need to respect immediate uptrend continuation from current levels, simply because we already have all needed sub-waves in red wave 4); A-B-C legs called a zig-zag We however want to see a channel breakout, around 109.00 which will confirm our bullish views, and send this market up to 111.00/50 area.

Base Metals 

US Spot Prices (in l/b)
US Copper:           Last: 3.87+
US Nickel:             Last: 8.90-
US Zinc:                Last: 0.95+
US Aluminium       Last: 1.03+

Copper CFD: 387
Technical Analysis: The price is moving higher in the impulse wave towards the MediumLevel ML4 | 400 and is currently working through the orders at 390, only the first high as been created, so the profit takers and a few stops are done so the first lot of pullback buyers will come in at 390.
The other important market is Nickel and that is working across ML9 so that will and will  continue to create corrective price action but essentially its stable. US BHP moves above 78 as expected, however we want it sitting on TL8* |80.00 as support this will sure up the global Materials sector *See TradingLevels article

Forex 

Forex US Dollar   78.28
Technical Analysis: The dollar is continuing down on track for its wave count and the Euro up, plus the other pairs confirm this move. The price will become choppy into SG1 7830|7820|7810 and then 78. In scalping markets its not a good idea to trade down in SG1 simply because the price bounces around too much  because there are orders always waiting at 30, 20 and 10, personally I would scalp down from 50 to 30 and 80|72 to 50 and the same for the up side, however I would scalp going up through SG1 this is because the price action is difference and the market is building not dropping, dropping has the fast bounces and you need to cover at certain numbers where you know the orders are sitting, whole numbers then even numbers then odd numbers

Forex EURUSD  1.3450
TradingLevels: The price should stay above 13420 SG1 the current resistance is SG2 1.3465|13472|13480 and then 135, the price is currently working through the Midpoint 13450 as support
Elliott Wave: Wave 4  is completed and Wave 5 up is underway above 135
Trading Strategies: The last move up from 134 to SG2 has not been corrected, if it did it can come back to 12330 and then move up above 135. If not then it will find support on the 13472 if so move in long from there. The net result is that the price should move higher so looking for your long trade set is the correct bias.

Forex AUDUSD  1.0756
TradingLevels*: There is the overhead trendline appearing to hold as resistance this lines up with the SG2 and mainly the 10772 this resistance can also be seen as the top of wave i) and the Wave ii) abc correction. The price should stay above 10720 the second support level but the 61.8% correction ratio is 107
Elliott Wave: Aussie tested the upper channel resistance line where we still favour, and want to see a breakout that will confirm further strength for Australian dollar against the buck. If we are correct, this this pair will accelerate into a wave three of three towards 1.0850, 161.8% Fibo target. Meanwhile, pair should not fall back below 1.0700 level, otherwise larger corrective wave four on 4h chart is probably still in progress...
Trading Strategies: It always depends on the degree of structure your trading and you set your rules and money management up around that. Any way the main trend is up, so if the 10772 finds support go long, if the price moves down below 10750 and then gets back above as support then trade long from there. It’s the spiking lower then finding support on a key level that is important as its say the volume is in the right place  *See TradingLevels article

Indices 

Dow Jones CFD  12.995
Technical Analysis
TradingLevels: There are different degrees of patterns and the price has really just arrived at 13,000 (TL3) so it’s in early stages with its swings, the first aspect to look for is support or resistance, I know this can be tricky, but patience is required, looking for trading opportunities in one or two markets every day can get you into trouble, it’s the same with currencies you need patience to wait for the right set up, one that you know. If you were to trade long on the US 30, then the first thing is to wait for support on top of SG1 13,030 support on SG1 gets you to 13,050. If there is a shorting opportunity then it comes from the SG2 and the 12972 within SG2 as retested resistance, then you would use the 12,965 as the second trigger to add to positions and cover the shorts at the Midpoint 12950. Of course you can navigate around the midpoint until it becomes the resistance and then short the failed retest to SG2 12930
Elliott Wave: The price has not accepted or rejected the 13,000 that is the main point, so there is not trade, the acceptance or rejection comes with a series of retests.
The Elliott Wave count is higher ground, however that would only be confirmed if the 13000 is support, so support on SG1 of TL13 13,030 is required
Trading Strategies: Long if 13030 is support or short if 12972 is resistance, both of these require a retest and volume to confirm this price action.

S&P500 CFD: 1368  
TradingLevels: Same - The price has entered SG2* 1365|1372|1380 which is positive for the upside. The next step is developing support on 1365 then move up above 1372 and find support, then on 1380…The flipside the 1365 as resistance is a bearish bias and 1360 as resistance is bearish
Elliott Wave: Even though the price is not higher than yesterday the internal wave structures are five up and three down, meaning bullish structure
Trading Strategies: Same - Look for support in Subgroup2 starting with 1365, then adding to positions when 1372 becomes the support and the same at 1380
 *See TradingLevels article

FTSE 100 CFD: 5920
TradingLevels: Same - even though the price is down, we need to play the long side and support on 5900 and 5930 is what we are looking for with the expectation of the price moving higher.
On the flip side if the price find the SG2 5872 as resistance then a larger bearish picture would unfold. But as it stands we are lining up the wave count with the other markets
Elliott Wave: The Wave iii) mentioned yesterday as underway is in line with other Indices
Trading Strategies: Support on 5930 SG1 is proof of strength, the current support on 5900 is great and now the price needs to build off that.

DAX CFD: 6871
TradingLevels: The price has tested below 6800 and is now back above this is positive, not the price needs to retest 6800 for support, once this is confirmed look for long trade set ups
Elliott Wave:  Impulse wave structures up, wave three up is underway
Day Trading: If your long off the retest of 6800 then great, keep the stop under this level, if the 6900 becomes support then add positions ( when adding there are many mathematical method, but if you don’t have one, then use this, only add 50% of your last trade, so if you have 100 CFDs then adding would be 50 CFDs and adding again would be 25 CFDs) this way it the trade doesn’t get too top heavy

SPI CFD 4269
Technical Analysis
TradingLevels: There is a real battle at SG2 4265|4272|4280 with the pivot 4272 as the balance line, you need this 72 as support for being long
Elliott Wave:  Same - There are two possible counts here, the Alternative count would see Wave ii) in place now and therefore a move above 4300 from here. And the second if the move up retesting 4300 is Wave b of an abc correction for Wave ii)
Day Trading: long on support on 4272 otherwise it’s down to 4250 – 4230 SG1 first.

Summary

Another flat day ahead as the Dow sticks to 13000 the price has not accepted or rejected this level yet.

The currencies, precious and base metals lead higher, the Euro and Aud are also edging higher as are Copper and Gold, Silver has been the standout in a strong move up.

The SPI is locked under the 4272, the ASX200 not being above 4300 as support is frustrating for the Australian market, but it is the AUD that is keeping it down

If we see US BHP climb above 80 (TL8) as support then this can be the catalyst for higher ground, this is in line with the Chinese markets.

The Financial Calendar for Wednesday and Thursday should be noted as this will create the Wed/Thurs swings in the markets

Trading Quote

Have patience when waiting for set ups and balance in making most decisions

Today's Financial Events

Time     Currency   Detail     Forecast    Previous

8:45am  NZD        Building Consents m/m     2.1%  
10:15am  JPY        Manufacturing PMI     50.7  
10:50am  JPY        Prelim Industrial Production m/m    1.6% 3.8%  
11:00am  NZD        NBNZ Business Confidence     16.9  
11:01am  GBP        GfK Consumer Confidence    -27 -29  
Tentative  AUD        HIA New Home Sales m/m     -4.9%  
11:15am  USD        FOMC Member Pianalto Speaks      
11:30am  AUD        Retail Sales m/m    0.3% -0.1%  
11:30am  AUD        Construction Work Done q/q    -0.6% 12.5%  
11:30am  AUD        Private Sector Credit m/m    0.3% 0.3%  
4:00pm  JPY        Housing Starts y/y    -3.3% -7.3%  
6:00pm  EUR        German Import Prices m/m    0.5% 0.3%  
6:45pm  EUR        French Consumer Spending m/m    0.3% -0.7%  
7:00pm  CHF        KOF Economic Barometer    -0.11 -0.17  
7:55pm  EUR        German Unemployment Change    -5K -34K  
8:30pm  GBP        Net Lending to Individuals m/m    0.8B 0.4B  
8:30pm  GBP        M4 Money Supply m/m    -0.8% -1.4%  
8:30pm  GBP        Mortgage Approvals    54K 53K  
9:00pm  EUR        CPI y/y    2.7% 2.7%  
9:00pm  EUR        Core CPI y/y    1.8% 1.6%  
12:30am  USD        Prelim GDP q/q    2.8% 2.8%  
12:30am  USD        Prelim GDP Price Index q/q    0.4% 0.4%   
1:45am  USD        Chicago PMI    61.6 60.2  
2:00am  USD        Fed Chairman Bernanke Testifies      
2:30am  USD        Crude Oil Inventories     1.6M  
6:00am  USD        Beige Book 

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02 Forex: GBPUSD – Latest Elliott Wave

GBPUSD 30 Minute Chart
Wednesday, 29 February 2012 at 1:50:00AM AEST

GBPUSD came down to 1.5800 in recent hours, against our intra-day expectations. But despite that fall larger trend, clearly remains up. We can coutn three waves from a top, which could be either a wave (4) or wave (2). In both cases we expect a rally higher, but lets be patient now, and wait on channel break first!

GBPUSD 4 Hour Chart
Tuesday, 28 February 2012 at 5:45:00PM AEST – wave B now finished

Cable found some strong bids at the end of the past week, and recovered impulsively through the channel resistance line. As you know, we always tend to look for that kind of breakouts which provide a clear direction of a larger trend. A such, we are confident that wave B is now finished and wave C of E) underway towards 1.6000 psychological level.

GBPUSD Daily Chart
26 February 2012 – more upside in wave E)

No change!
A sharp bounce from 1.5200 region seen in this past week, suggests that a recent fall from 1.59 was only a minor temporary puses within unfinished rally that started in January. As such, we of-courser decided to relabeled the wave count into more probable scenario. We are now looking for incomplete wave E) leg, which must be subdivided by three legs. We expect strenght within wave C leg towards 1.6180 in the coming days and weeks.

GBPUSD Weekly Chart
19 February 2012 – wave (B) triangle

A decline from 2008 pick into 2009,  1.3500l ow was in five waves, which in Elliott Wave theory indicates a direction of a larger trend. This is called an impulse wave, and once this leg is complete you will see a reversal in price, against the trend, normally into a slow, choppy and overlapping price action which is personality of a correction. Well, this is exactly what we are seeing on cable since 2009 lows. As such, we are very confident that pair is trapped in a corrective pattern, triangle which is near completion. Now wave E), final leg underway, which will top-out in first half of 2012.

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