EarlyBird CFD Report – The day ahead

Dow Jones Cash – 11,146 +1.27%
Base Metals Down
US Gold CFD: 1817
Oil WTI CFD: 89.90
Copper CFD: 390
US Dollar CFD: 76.83
EURUSD 1.3776
AUDUSD 1.0282
Dow Jones CFD 11,270
S&P500 CFD: 1,190
FTSE 100 CFD: 5292
SPI CFD 4083

US News
U.S.

Commodities

US Gold CFD: 1817
The US Indices are still in Wave 4, a Triangle, in this Triangle the price is in Wave (c) once it completes this Wave (c) high and moves down then Gold will push up, the key for trading long in Gold is support on 1830 as mentioned yesterday, until this occurs Gold is at risk of moving down depending how high the Dow goes in the Wave (c) which can be as high as 11500 but that’s about it. The other aspect is the US Dollar pulling back yesterday I mentioned the 76.50 and the Dollar is still in that process, technically it can go lower, but the point is, when the Dollar finds support then the Dow will turn down and the Gold up and the Currencies will also fit into this picture.  

Oil WTI CFD: 89.90
Oil is struggling at the MediumLevel 90 it is struggling with the base metals, however as you know Oil will follow stock but at ML9 / 90 it’s struggling.  The price can push to 91 while the Dow completes its Wave (c) leg of the Triangle

Base Metals

US Spot Prices (in l/b)
US Copper:           Last: 3.89-
US Nickel:             Last: 9.50-
US Zinc:                Last: 0.97-
US Aluminium       Last: 1.04-

Copper CFD: 390
The MediumLevel 400 (ML4) has become a retested resistance; this is the selling pressure for the ASX200. The support is 380 but expect a bounce off the 390

Forex

US Dollar CFD: 76.83
No change here, we know the 8 in this case 78 is the profit taking number and the 77.72 is also a time and price turning point, the next question is the support as the support here will create the top for the Indices, at a guess the 76.50 would be the support even though there hasn’t been any volume traded there, it’s more a ratio element and on that note the 38.2% for the Elliott wave four retracement is 76.20, once this wave (iv) has found support then expect a move up above 78, once we have this new high above 78, we should see a larger ABC correction, which will also show up in the Indices and the Euro

EURUSD 1.3776
TradingLevels: The two levels of supply are 138 and 139 we need to line these area’s up with the 11500 on the Dow and the Support for the US Dollar
Trade Strategy: While the US Dollar is correcting back to 76.50 the Euro is going to push up, the move up is from the French and Germans talking about saving the banks last night but the Euro hasn’t moved as much as the SP500, so it’s moving up reluctantly, the key is for the top is the support in the Dollar and the support in the Dollar is not confirmed at 7650 as there is no volume support there. The other aspect is the US Indices finding their high and the Dow can go to 11500  

AUDUSD 1.0282
TradingLevels: 103 resistance also work the 10272
Elliott Wave: The last low under 102 is the Wave (iii) so we are in the Wave (iv) bounce, the 38.2% retracement level is 10360
Trade Strategy: Thee will be a lot of supply starting at 103 any upside look at the 10272 SG2 as support. Wave fours can get complicated and are not the wave structures to trade as there are too many short term swings

Indices

Dow Jones CFD 11,270
TradingLevels:  We do know the supply / resistance is 11500 there are smaller resistances at 11300 and 11400 so we need to sit tight and allow this rally to play out.
Elliott Wave: The Wave count is either our original with Wave 4 completed and the market working lower or we have a move complex Wave 4 such as a Triangle  both counts need to be considered but both counts lead to the same medium term result as they are corrective and once completed a move down making new lows. I would only ever turn bullish if the 11500 Medium became a support.
Trade Strategy:  We need evidence of a top to be in place the current high at 1140 can be the high but to short further we need to see the internal structure displaying impulse waves down and that’s not the case yet. The price is right for the high but we need to see the science. Any Trading of this market traders could use the 11,272 SG2 as the starting point being on the right side of this is step one.

S&P500 CFD: 1,190
TradingLevels: The price can push higher to the 1230 area before moving back down. The 1200 is the MinorLevel that the price will be working around over the next session. The support is back at SG2 1172  - 1180 while the price is above this the market is supported, however the structure up is corrective and the larger pattern is corrective
Elliott Wave: I will work the Dow as the original Wave 4 pattern and I will work the SP500 as the Triangle. The Move up here as the Wave (c) of the Triangle, which can have another push to 1220 before completing, after the Wave (c) there will be Wave (d) down and Wave (e) up to complete the Triangle
Trade Strategy:  If the price pushes to 1220 then moves back down under the 1200, look for the retest as resistance then hold short.

FTSE 100 CFD: 5292
TradingLevels: The price can push higher to 5327 SG2 area before moving back down, the move has to line up with the SP/Dow. However we can count the Triangle pattern is a different way I will explain in the video.
Trade Strategy:  Allow this current rally to play out

SPI CFD 4083
TradingLevels:  The 61.8% retracement level is 4150
Elliott Wave: Whichever way I look at the pattern sitting on 4000 the MediumLevel it’s corrective a continuation pattern and will eventually clip those long stops under 4000
Trade Strategy: The price can rally the 4150 and 4172 are the resistance price points to look for short trades from. There is also the 4100 and the 4130 as near term resistance that can hold the price or use them as supports if breached.
Obviously watch the Dow Futures during the day and what’s coming out of Europe with the banking crisis but also keep an eye the 390 support for Copper.

Summary

No such thing as a free lunch, the current rally is testing highs and supply, the 11500 on the Dow is the key price point the down can work to and as you know I would only turn bullish if the 11500 ever became a solid support, so we sit tight during these swings, as mentioned when we looked at the 2008 Sept at 11500 the retracement levels were also high, but we should not get sucked in emotionally feeling we should get in long, we need to keep a cool head, if your under pressure in the a trade, then reduce so you can breathe.

The base metals are down and the copper has made new lows this will place the pressure on Asia. The pattern sitting on 4000 on the ASX200 is corrective, a continuation pattern, after a rally maybe to 4150 – 4172 then we should see the price break through 4000 if this is the case the price will move quick as there will be computer stops under there.

As you can see there are a lot of financial announcements today (below)

So a rally on Thursday with Friday and Monday down are the thoughts

Trading Quote
The worst mistake investors make is taking their profits too soon, and their losses too long.— Michael Price (Mutual Shares Fund)

Today's Financial Events
Time     Currency   Detail     Forecast    Previous
  
7:00am  NZD        Official Cash Rate    2.50% 2.50%  
7:00am  NZD        RBNZ Press Conference      
7:00am  NZD        RBNZ Rate Statement      
7:00am  NZD        RBNZ Monetary Policy Statement      
8:30am  NZD        Business NZ Manufacturing Index     53.2  
11:00am  AUD        MI Inflation Expectations     2.7%  
11:30am  AUD        New Motor Vehicle Sales m/m     8.6%  
11:30am  AUD        RBA Bulletin      
5:15pm  CHF        Industrial Production q/q    3.3% -9.2%  
5:30pm  CHF        Libor Rate    <0.25% <0.25%  
5:30pm  CHF        SNB Monetary Policy Assessment      
6:00pm  EUR        ECB Monthly Bulletin      
6:30pm  GBP        Retail Sales m/m    -0.2% 0.2%  
6:30pm  GBP        Consumer Inflation Expectations     3.9%   
7:00pm  EUR        CPI y/y    2.5% 2.5%  
7:00pm  EUR        Core CPI y/y    1.2% 1.2%  
7:00pm  EUR        Employment Change q/q    0.2% 0.1%  
10:30pm  CAD        Manufacturing Sales m/m    1.3% -1.5%  
10:30pm  CAD        New Motor Vehicle Sales m/m     10.8%  
10:30pm  USD        Core CPI m/m    0.2% 0.2%  
10:30pm  USD        Unemployment Claims    410K 414K  
10:30pm  USD        CPI m/m    0.3% 0.5%  
10:30pm  USD        Current Account    -121B -119B  
10:30pm  USD        Empire State Manufacturing Index    -3.9 -7.7  
11:15pm  USD        Capacity Utilization Rate    77.5% 77.5%  
11:15pm  USD        Industrial Production m/m    0.1% 0.9%  
12:00am  USD        Philly Fed Manufacturing Index    -14.4 -30.7  
12:30am  USD        Natural Gas Storage     64B  
3:45am  USD        FOMC Member Tarullo Speaks      
4:00am  EUR        ECB President Trichet Speaks      
6:00pm  EUR        Current Account    -5.6B -7.4B  
6:00pm  EUR        Italian Trade Balance    -1.97B -1.83B

NOTES:
1. Check the Dividend & Reporting section for your stock on this site before trading
2. Prices may change as this report is written while markets are closing/trading
3. Always think things out for yourself, we are only here to bounce ideas around.

Good Morning & Good Luck!