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The Day Ahead – Technical Analysis Report

Dow Jones 12,862 +1.23%
Base Metals Positive
US Gold CFD: 1725
Oil WTI: 98.00
Copper CFD: 390
US Dollar: 79.01
EURUSD 1.3156
AUDUSD 1.068
Dow Jones CFD 12,843
S&P500 CFD: 1342
FTSE 100 CFD: 5910
DAX CFD: 6771
SPI CFD 4310

News
Stocks rose after the U.S. economy added more jobs than expected last month, driving the Nasdaq Composite to an 11-year high and pushing the Dow to its highest reading in almost four years. Strong jobs report boosted the dollar Friday, as evidence of a rebounding labour market helped diminish expectations of more expansionary monetary policy by the Federal Reserve.

With markets still being roiled by Greece's efforts to restructure its debt in order to receive fresh financial assistance, investors cheered news that the U.S. economy added 243,000 jobs last month. The jobless rate fell to 8.3%, its lowest since February 2009.

Commodities

US Gold CFD: 1725
Technical Analysis:
TradingLevels: The two main levels are 1800 MinorLevel and 1650 the MediumLevel and the 50% price point is the 1725, and the closed level to that is the 1720 so expect some support here and the price can bounce up from here in the three waves before further downside
Elliott Wave: The sharp move down is in five waves (impulse) so once it completes there will be a three wave counter trend (abc) and then at least another five waves down. This 5-3-5 three wave structure would then be either a larger ABC bullish correction or the start of a larger five wave structure (impulse) if that was the case then a more serious top would be in play. So we need to take these two wave counts step by step. In terms of long gold trades on the ASX we can lock in more profit. However gold stocks tend to also follow the general market and base metals, these would be a supporting factor. But we shouldn’t expect buyers to come in for US Spot gold just yet, as most of the buyers are already in and stops will get triggered.
If the current high above 1750 is the top of  wave three the a 38.2% retracement as a wave four would be around the 1710 so we can say the 1700 as the wave four support, which would also be the up trendline support from the 1520 low to 1650. This scenario and the others above point to support around the 1700, so we could say if  US Gold found the 1700 as the resistance, then we would have a larger top in place and the point we can built shorts into the market. But for the time being lets treat it as a wave four pullback.

Silver:
TradingLevels: Support 32.72 / 33.00
Elliott Wave: current top has two counts, one is the top of the Wave 2 rally and the market will move down from here. Or the current top is a Wave (iii) and the current move down is part of Wave (iv) with the 32.72 as the support with a move up higher from there, which is likely when you look at base metals.

Oil WTI: 98.00
Technical Analysis:
TradingLevels: The expected bounce off the MinorLevel 95.00 is underway and the 98.00 is the next MinorLevel being retested as expected, this is just the psychology of numbers, but is really a retest of supply, the supply and demand game. 
Elliott Wave: If you look at the Elliott Wave charts on the website you will see where this complicated count is. That said we will also watch the demand and supply battle it out through the MinorLevels

Base Metals

US Spot Prices (in l/b)
US Copper:           Last: 3.89+
US Nickel:             Last: 9.58+
US Zinc:                Last: 0.96+
US Aluminium       Last: 1.00+

Copper CFD: 390
Technical Analysis:
The wave four pullback into SG2 372 zone appears to be completed with the move higher, so a testing of the 400 MediumLevel is underway again

Forex

Commodity currencies are the strongest, and the reason is the stock market and US yields that are higher.

US Dollar: 79.01
Technical Analysis:
The current sideways pattern in both the Dollar and the Euro can break either way, there is however a bias for the Euro to break up and the Dollar down, but don’t bet on this without a very clear plan and setup. To Short the Dollar, would require the 79 to see a failed retest and to go long on the Dollar would require support on 9730 top of SG1. The Dollar has support at 78.50 and 78.00 expect bounces of these prices if the dollar does break lower.

EURUSD 1.3156
TradingLevels: Support on the Midpoint would see the price at 132.
Elliott Wave: The pattern form the 28^th Jan to now is corrective, but it may not be completed, it can expand further, than said there is hop that it can break higher now, if the price moves higher to 132, that would give us five waves up from the last low around 13065, this five wave would be the start of the next leg higher, after these five waves would see a corrective pullback abc.
Trading Strategies: If the price finds support on 13150 then trade up to 132 and exit, then wait for a abc corrective pull back pattern and look for a long trade set up either on 13272 or 132 and 13230

AUDUSD 1.068
TradingLevels: The 1.08 should see a larger corrective pattern, once completed then further upside to 110 The first MinorLevel this is from the Elliott wave count
Elliott Wave: Expect a move to around 10830 then a corrective pattern to start across 108
Trading Strategies: Current high, the small pullback is a small wave four and once completed to 10765 – 50 then a wave five up to 10820/30 then a larger corrective pattern. Going long off 10772 as support. This number 10772 will also play a part as support and resistance in the future  

Indices

Dow Jones CFD 12,843
Technical Analysis
TradingLevels: The breaking above 12,800 creating a new high puts the 13,000 the next largest number as a target, the Dow works every 100 points so expect a corrective pattern at 12800
Elliott Wave: Impulsive wave up that should continue in its pattern, a break of the US Dollar through 79.00 would be the flip side
Trading Strategies:  The Midpoint 12850 is the line in the sand, if the price finds this as resistance then expect a move back to 12,800 if the 12,850 finds support then expect a move to 12,900 – 12,930 then a correction.

S&P500 CFD: 1342
TradingLevels: Next resistance 1350
 Elliott Wave: The Impulse wave is still unfolding upwards, the price needs to work around 1340 with resistance at 1345 and support at 1340 to 1338
Trading Strategies: Wait for a pull back into 1338/40 then look for a long trade set up on the 1340 but a dip below 1340 first makes the long trade off 140 stronger

FTSE 100 CFD: 5910
TradingLevels: Expect a abc correction across 5900, three swings.
Elliott Wave: 31 Jan 5650 low to the current high is five waves. So this can be a top or at least expect and abc correction
Trading Strategies: The strong run from 5800 to 5900 will need to rebalance so expect a corrective pattern across 5900 an abc corrective pattern

DAX CFD: 6771
TradingLevels: Corrective patterns, small one at 6772 SG2 then a larger one at 6800.
Elliott Wave:  Counting five waves up from the 6422 low on the 30^th Jan to the current highs or 6800
Day Trading: Allow an abc correction to unfold into SG2 6765|6772|6780 then trade long to 6800 off the 6772 as support  
 

SPI CFD 4310
Technical Analysis
TradingLevels: The 4300 is a MinorLevel and the top of Minor Group1 this is significant if the price can find support on this level as it places the next target at 4500
Elliott Wave:  The US move is priced in, the cash market opening can lift it to 4320 – 4330 but then  expect a smallish correction, as there is five waves up from the last low 4250 which should complete into 4330
Day Trading: The move has happened, so a corrective pattern the Subgroup1 (SG1 4310|4320|4330. The Shanghai opening can add lift.

Summary

US Indices Expect the Dow to correct into 12,800

Europe The DAX and FSTE have nearly competed five waves up and should correct into tue/wed

China The Shanghai is pushing up nicely  above the 23300 with the 2500 target is still on the table
Australia Finally the SPI lifts up above 4300 now support via a retest is the next move, this create long trades on the ASX

Trading Quote
It’s not what we don’t know that hurts us; it’s what we know for sure that just ain’t so. -Mark Twain

Today's Financial Events
Time     Currency   Detail     Forecast    Previous

Monday, February 6, 2012

10:30am  AUD        MI Inflation Gauge m/m     0.5%  
11:30am  AUD        Retail Sales m/m    0.2% 0.0%  
11:30am  AUD        ANZ Job Advertisements m/m     -0.9%  
7:00pm  CHF        Foreign Currency Reserves     254.2B  
6th-8th  GBP        Halifax HPI m/m    0.1% -0.9%  
8:30pm  EUR        Sentix Investor Confidence    -14.6 -21.1  
10:00pm  EUR        German Factory Orders m/m    0.5% -4.8%  
2:00am  CAD        Ivey PMI    57.8 63.5


Australian Corporate Calendar

Myer Holdings Ltd (MYGSF)*     Q2 2012 Trading statement

NOTES:
1. Check the ASX Dividend & Reporting section in the Member area before trading.
2. Prices may change as this Technical Analysis report is written from 3.30 – 6.30AM
3. Always think things out for yourself, we are only here to bounce ideas around.

Good Morning & Good Luck!

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