Technical Analysis Report Weekly
 

01  Today's DayAhead Technical Analysis Report – 3 April 2012» 
02  Be Prepared – Grow Your Own Wisdom»

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01  Today's DayAhead Technical Analysis Report – 3 April

Market Drivers

Dow Jones 13,264 +0.40%
Base Metals Positive
US Gold CFD: 1677
Silver: 33.00
Oil WTI: 102.90
US Copper CFD: 392
US Dollar: 79.00
EURUSD 1.3330
AUDUSD 1.0342
Dow Jones CFD 13,270
S&P500 CFD: 1418
FTSE 100 CFD: 5880
DAX CFD: 7060
SPI CFD 4346

News
NEW YORK (Dow Jones) – Emerging market currencies strengthened broadly Monday on the back of more positive Chinese economic data and rising U.S. stocks.
The Chilean peso, Mexican peso and South African rand rallied, inspired by stronger commodity prices in response to the Chinese data and improved market sentiment. These growth-linked assets continue to look to the global backdrop for guidance, particularly as markets monitor economic indicators for the US, euro zone and China this week. Emerging market sovereign debt was little changed on the day.

US Commodities

US Gold CFD: 1677
TradingLevels: SSilver shows a better move up, as we have to work out if the current move up in Gold and Silver is a corrective counter trend rally ABC or an impulse wave bullish and silver suggests impulsive, but we should wait for confirmation before any serious trading in either directions. In the meantime just trading the sublevels, currently the price is working through Subgroup2 (SG2) 1665|1672|1680, it’s the 1672 that is the pivot and also the retested support that is requite for long trades to 1700 and adding on 1680 as retested support, if these don’t come about then there is not trade on the long side
Elliott Wave: (See 30 Minute Chart) Nice pop up on gold, but still not sure if that’s wave (iii) of an impulse or maybe just wave (c) of a corrective move! We are waiting on evidence of an acceleration which should occur once base channel resistance line is broken.

Silver: 33.00
TradingLevels: The next support will be SG2 or 32 (32.65|3272|32.80) expect the Tradinglevels ‘Classic pattern across 33.00 which in this case is an wave four in Elliott terms once completed a move up above 33.30 – 33.50
Elliott Wave: Like gold we have to consider the move up as a corrective rally and an impulse wave. We will map these out in the video.

Oil WTI: 102.90
TradingLevels: The Chinese Manufacturing figures assisted all commodities rise during the Euro and US sessions, which creates the retest of 105 that we were naturally expecting, not we have to wait and see if the retest fails or if the price climbs above 105 and develops support
Elliott Wave: Oil prices fell into a new low as expected and now trying to reverse higher, which however should not be a surprise as we can count five waves down within a larger degree of wave five. Even more recovery in the next few hours during the US session and break of 103.30 will suggest that bottom has been reached.

Base Metals

US Spot Prices (in l/b)
US Copper:           Last: 3.92+
US Nickel:             Last: 8.18+
US Zinc:                Last: 0.90+
US Aluminium       Last: 0.94+

US Copper CFD: 392
Copper and Nickel both moved up firmly. The large triangle pattern is confirming now with the current move up, the price should pop up above 400 (MediumLevel ML4)

Forex

US Dollar: 79.00
The The pattern sitting on 79.00 has turned corrective as Indices working higher based of China’s manufacturing. Expect the US dollar to move lower under 79.00 to SG2

EURUSD 1.3330
TradingLevels:  The Euro is lagging the SP, Oil Gold because of the higher US Bonds on the intraday relationship. The Support 13272 (SG2), expecting higher indices should lift the Euro above the 134. Say on the 2 hour chart the pattern at 132 is the same as at 133, reoccurring patterns in this trend this is the same for the dollar on the downside, be worthwhile working with this.
Elliott Wave: Despite very deep pull-back on Euro in recent hours price still trades well above 1.3250 invalidation level. In fact, pair found some nice support during the US hours now, which could be start of a wave C if we consider an expanded flat in wave B from 1.3376. Keep in mind that only 1.3250 break will be trend changer! For now higher highs and higher lows are still clearly evident since March 14th (4h chart)
Trading Strategies: Support top of Subgroup1 (SG1) 13330 for longs. The move up from SG2 13272/13280 needs to complete five small waves, then an abc, then you trade long. The abc can come back to 133 but 13310 is more likely, but if you get that support on (Micro Group1) 13333 then trade long

AUDUSD 1.0342
TradingLevels: the Sp500 held up and the AUD follows. While the price is above SG2 10365|10372|10380 the market is supported under this and the trend is resuming
Elliott Wave: The pattern up off 103 is more corrective looking ABC rather than an impulse wave (five waves) The SG2 support 10372 is the key to the larger pattern being bearish or bullish
Trading Strategies: 2 minute chart; The last move up from SG2 through 104 to 1044 can be five waves (impulse) if this is the case then it will retrace down in three waves abc retesting the trend up, this move down can retrace 61.8% of the move up, but should move down towards 104, if you can allow it to move down and then if it has three waves down and starts to climb up then you can go long and this could be off 10420 or 10430. If the price doesn’t come back up and it locks under 104, then work the short side especially through SG2 10380|10372|10365
The RBA Cash Rate today 2.30PM

Indices

Dow Jones CFD 13,270
TradingLevels: Resistance 13,300 Support 13,200 – 13,172 (SG2)
Elliott Wave: The Futures / CFDs  have a different top to the DJI Cash/index the Index made  a new top and the Futures / CFDs didn’t. So we should use the DJI Index, this means we are seeing impulse waves to the upside. We can consider the last move around the 13,045 to the current high 13,300 as wave one and will now see a move down retesting the 13200 before another move up into new highs
Trading Strategies: Wait for the abc down from 13,290 to 13200 – 13172 SG2

S&P500 CFD 1418
TradingLevels: The SPX has made a new high but the Futures/ CFDs have not, if we run with the SPX then there is a more bullish aspect, if we run with the Futures a bearish scenario lingers.
Elliott Wave: Support on 1420 would flip the market to bullish, however firstly we can expect a sell off at this current high and a retest of 1410
Trading Strategies: Expect a pullback to 1410. Use the 1410 as support or resistance for long or short trades

FTSE 100 CFD: 5880
TradingLevels: Expect a Tradinglevels Classic pattern across 5900
Elliott Wave: The US Indices are displaying a more bullish pattern so the European Indices are likely to follow that lead.
The pattern since the 14th March can be bullish corrective or bearish, we have been working through the possibilities, the move up last night does swing it to a bullish bias based on the strong move, however this is not confirmed in the wave structure as yet, it is more so in the US Indices so we can work with that
Trading Strategies: Only a move above 5950 would turn the Elliott to confirmed bullish. So it’s all about the 5900 as support or resistance, but it it’s bullish it will take a while to set up, because the first high above the level the 5900 needs to occur first, the abc corrective pattern, then you start looking for the long set up.

DAX CFD: 7060
TradingLevels: A move down to 7000 then up through 7100 to above 7200
Day Trading: Expect a retest of 7000 if this is the case then look for a long trade scaling in through SG1

SPI CFD 4346
TradingLevels: Every time a new high is made it’s sold off, the stochastic’s should work well in this price action with the sublevels.
The price can retest 4340, but the 61.8% is back at 4330.
Day Trading: The Midpoint as support creates the long trade to SG2 4365|4372|4380. Normally taking part profit at 4365 the rest at 4372, wait for support at 4372 if found then move back in with stop under the 4365 and adding to position on 4380 part profit at 4390 and the rest at 4398. This is the normal procedure.
If the price drops below 4320 and then finds support on 4333 then go long from that support level. It can come back this far as the SP500 and Dow etc need to retrace there moves. The other point worth mentioning here is that the overnight move was created by China, meaning we have had that already priced in. *See TradingLevels article

Summary

China is back on Thursday. The move in the US and Europe was driven by the China Manufacturing figures, but we have already had them priced in yesterday.

That said the copper (base metals) are positive with the large triangle pattern in copper starting to confirm as a triangle pattern, which is positive. However triangles are wave fours, so after the wave five, which should be just above 400 (US) we should see copper roll over in line with the Shanghai markets.

This in turn would allow the ASX to complete its move up to the 4400+ then roll over and this would also apply to the US and European Indices likewise, making new highs. The Euro will follow the SP500 as will the Yields on the US bonds.

All in all we can be long at least for the short term, but those highs last night in the US and Europe will be sold off, so wait and look for support first.

Trading Quote

"To keep experiencing the novelty and freshness of the market, and to keep from being trapped by your preconceptions, it's important to keep distinguishing between the tape and your interpretations of the tape. View as neutral both the events and your inclination to impose your interpretations on them. You enter the market without expectations, surrendering to it rather than struggling with it for personal gain. Ultimately, you are able to fine-tune your responses."  – Ari Kiev

Today's Financial Events

Time       Currency   Detail     Forecast    Previous
9:50am  JPY        Monetary Base y/y    12.6% 11.3% 
All Day  CNY        Bank Holiday     
11:00am  CNY        Non-Manufacturing PMI     48.4 
11:00am  NZD        ANZ Commodity Prices m/m     0.0% 
11:30am  AUD        Retail Sales m/m    0.2% 0.3% 
11:30am  JPY        Average Cash Earnings y/y    0.2% 0.0% 
2:30pm  AUD        Cash Rate    4.25% 4.25% 
2:30pm  AUD        RBA Rate Statement     
3rd-7th  GBP        Halifax HPI m/m    -0.3% -0.5% 
6:30pm  GBP        Construction PMI    53.6 54.3 
7:00pm  EUR        Final GDP q/q    -0.3% -0.3% 
7:00pm  EUR        PPI m/m    0.5% 0.7% 
12:00am  USD        Factory Orders m/m    1.5% -1.0% 
All Day  USD        Total Vehicle Sales    14.6M 15.1M 
4:00am  USD        FOMC Meeting Minutes     
6:45am  USD        FOMC Member Williams 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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