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August 28, 2011 9:35:34 AM by
Peter
This Weeks EarlyBird REPORTS
EarlyBird Report – 26 August
Dow Jones Cash 11,149 -1.51%
Base Metals positive
US Gold CFD: 1761
Oil WTI CFD: 85
Copper CFD: 410
US Dollar CFD: 74.32
EURUSD 1.4375
AUDUSD 1.0435
Dow Jones CFD 11,150
S&P500 CFD: 1,160
FTSE 100 CFD: 5100
SPI CFD 4160
US News
U.S. stocks dropped Thursday after three days of sharp gains as Warren Buffett's $5 billion investment in Bank of America failed to stoke investors' appetite for risk ahead of Federal Reserve Chairman Ben Bernanke's speech on Friday.
Commodities
US Gold CFD: 1761
The first leg of three is complete at 1700, consider the first leg down the Wave (a) of an (a) (b) (c) correction. The current Wave (b) rally will be in three swings a smaller abc correctional rally, the target is likely the 1772 or the 1800+, once this Wave (b) is complete then it’s down for Wave (c)
Silver is in the same pattern except silver pattern can be a larger impulse structure, that is not down for Wave (a) but Wave (i) of five waves.
Oil WTI CFD: 85
Oil follows stock these days and that’s what’s occurring, however the first step is the 85 (mTL5) as the retested resistance and that pattern is in the process but not confirmed.
In the trend up from 80 (TL8) it has been the nature of Oil to spike down and this can just be a reoccurring pattern. That said the SP500 does appear to have its first five waves down (impulse) from the last night last high, meaning the larger Wave 4 correction may be over, if so then Oil should slide down from here
Base Metals
US Spot Prices (in l/b)
US Copper: Last: 4.07+
US Nickel: Last: 9.53+
US Zinc: Last: 0.99+
US Aluminium Last: 1.05+
Copper CFD: 410
All base metals have been strong over the last two sessions and will continue to push higher, copper to around the 420+, however I consider this a corrective rally part of the Wave (c) of an abc correction. It’s worth trading up the actual commodity, the local stock still has to complete against the US Indices trading lower.
Forex
US Dollar CFD: 74.32
The Euro is retesting the 144 as the resistance and the dollar trying to establish support on top of Subgroup1 (SG1) 7430.
If you have had stops under the 73.72 then lift them to 73.87. the general pattern looks fine for the upside, but as you know the top of SG1 as support is the next step, the whole move up can be corrective but the thinking is that it can turn into a positive Impulse wave, but we are far from that at the moment so there is risk, so continue to scale in small positions, don’t build percentage of initial risk only build risk in profit.
EURUSD 1.4375
TradingLevels: The SP500 turned on reaching the Gap and the Euro followed and now under the 144 and will retest 144 or even a tad higher, if we get a failed retest then the next move is down and the Dollar up
Trade Strategy: Long or short from SG2 14372 as support or resistance
AUDUSD 1.0435
TradingLevels: The wave (ii) top is being confirmed from 105 because of lower prices and the wave structure on the SP500
Elliott Wave: Wave (ii) complete and Wave (iii) is under way, if the wave count is correct then a move under 1.00 from here would be expected
Trade Strategy: The Weekly Robo does not have you short but the Daily and the 4 hour does. The shorter term is the 104 price level as resistance with the triggers at 10372 SG2 as resistance and scalpers will see a bouncy ride into 104 through the levels in SG1
Indices
Dow Jones CFD 11,150
TradingLevels: Wave (ii) completed and Wave (iii) down is under way, however more evidence is required but it does appear so. If correct then new lows would be made below 10,000. The 10800 and the 10500 are the MinorLevel key supports
Elliott Wave: The move down last night suggests that the Wave (ii) rally is completed and the Wave (iii) down is underway
Trade Strategy: Scalpers scalp, short term trend traders work each 100 points with the sublevels and trend traders hold short with stops above 11500 with the target of 10,000
S&P500 CFD: 1,160
TradingLevels: The price being under 1172 helps the bearish scenario, the 1150 is the next level require as resistance, the longer term target is the 1,000 and is the Dow at 10,000 both TL1 Major TradingLevels, it’s only natural to be pulled to these numbers especially when the Dow is under 12,000 and the SP500 under 1200
Trade Strategy: Look for short trade set ups, the price has worked the SG2 1180 I 1172 I 1165 as the resistance so work the 1165 for stops and also work the 1150 Midpoint.
FTSE 100 CFD: 5100
TradingLevels: The wave count is the same as the SP500 in fact it’s leading, the current move down is in five waves and will soon see a three wave counter trend then down again
Trade Strategy: You know it will get rough around the 5000, so move in closer or move back. The long term strategy is to add to short position here then under the 5000 as resistance with the aim of getting down near 4500
SPI CFD 4160
TradingLevels: The 4200 is still the line in the sand, however the bias is as resistance rather than as support because of the wave structure on the US Indices, you also understand that we have been looking for a top here and this maybe the turn now, a failed retest of 4200 is what we need to see.
Trade Strategy: work the SG2 (4180 I 4172 I 4165) the 4172 as resistance is the keystone here, but of course you can work a higher price short after a retest of 4200.
Summary
Indices, Wave (ii) rally is completed and Wave (iii) down is underway… supporting this move is the US Dollar moving up and the Euro down. We do have the Feds speak tonight that can lift the markets, but I think this is already priced into the markets as the Wave (ii) the Gap on the SP500 cash as the target was covered, so we should see further down side towards the 1,000 for the Sp500 and 10,000 for the Dow.
The ASX 200 can be support based on strong base metals price, perhaps China has started to buy from the sport market I will need to research this, but will treat the rally as just that a rally, even though Copper is above 400 I would need to see US BHP above 80 to consider the ASX200 supported from the resource point of view, the energy (oil) is following stock so that is fine and while CBA is under 50 I consider the Finance sector bearish, Berkshire Hathaway did buy 5 Billion in Bank of America, you would think they would have at least waited for 5.00 any way the US banks trend is down. So no support from the finance sector.
We will now look at shorts on the ASX, but pay attention to the Dow futures in the our afternoon session, we would expect a short term rally in line with the Feds speech, but expect this short lived with more downside to unfold.
All said and done the 4200 is the line sand for being bullish or bearish
Trading Quote
"The only conquests that are permanent and leave no regrets are our conquests over ourselves.--Napoleon Bonaparte
Today's Financial Events
Time Currency Detail Forecast Previous
9:30am AUD RBA Gov Stevens Speaks
9:30am JPY Tokyo Core CPI y/y -0.1% 0.4%
9:30am JPY National Core CPI y/y -0.1% -0.2%
4:00pm EUR German Import Prices m/m 0.3% -0.6%
6:00pm EUR M3 Money Supply y/y 2.2% 2.1%
6:00pm EUR Private Loans y/y 2.6% 2.5%
6:30pm GBP Revised GDP q/q 0.2% 0.2%
6:30pm GBP Prelim Business Investment q/q -3.2%
6:30pm GBP Index of Services 3m/3m 0.6% 1.2%
7:30pm CHF KOF Economic Barometer 1.86 2.04
10:30pm USD Prelim GDP q/q 1.1% 1.3%
10:30pm USD Prelim GDP Price Index q/q 2.3% 2.3%
11:55pm USD Revised UoM Consumer Sentiment 56.3 54.9
11:55pm USD Revised UoM Inflation Expectations 3.4%
12:00am USD Fed Chairman Bernanke Speaks
Day 2 ALL Jackson Hole Symposium
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!
EarlyBird Report – 25 August
VIDEO - Apologies, I lost the video in the production process
and I just dont have the time to repeat it. Rgds Pete
Dow Jones Cash 11,320 +1.29%
Base Metals Steady
US Gold CFD: 1763
Oil WTI CFD: 85
Copper CFD: 400
US Dollar CFD: 74.07
EURUSD 1.4423
AUDUSD 1.0465
Dow Jones CFD 11,300
S&P500 CFD: 1,174
FTSE 100 CFD: 5231
SPI CFD 4208
US News
U.S. stocks notched a third straight day of gains as an upbeat durable goods report set a positive tone while investors await Federal Reserve Chairman Ben Bernanke's highly anticipated speech later this week.
Commodities
US Gold CFD: 1763
The downside target we had in mind was the 1720 the fourth wave of one lesser degree and that’s fine if the structure down is only going to be in three waves, however the internal structure and personality is more like five wave (impulse) so roughly sizing it up we are looking lower perhaps even down to 1650 but probably closer to 1700. Expect the price to slow down into 1730 SG1 and correct across 1700
If we do get five wave down and that is very high probability, then this leg down is one of three abc correction.
Oil WTI CFD: 85
The 85 is still support, as long as the 85 is support the price has the basis to move higher, only when its retested 85 as resistance can we trade it short, so for now the bias is still up.
That said the wave pattern as an abc corrective can be complete now and a move down can occur, but we have time on our hands as the Dow is likely to push up above its last night high at 11300 as it develops support on 11200
Base Metals
US Spot Prices (in l/b)
US Copper: Last: 4.01+
US Nickel: Last: 9.44-
US Zinc: Last: 0.97-
US Aluminium Last: 1.00-
Copper CFD: 400
The pattern over the last month at 400 is corrective, but we are unsure if the price will push up in to SG1 (up to 430) again or drop from here, the corrective pattern has created too many possibilities to give any certainty of the short term. For the Materials sector we can look at BHP in the US at the 80 (TL8) support or resistance can off us the bullish or bearish bias for our local XMJ
Forex
US Dollar CFD: 74.07
The same thoughts as yesterday and we have seen the Dollar move up through the 74 with the 73.72 as support. So the scaling in can begin through SG1 (7410 I 7420 I 7430) on each sublevel it is the 7430 that is the top of SG1 that is important as support on top of 7430 sets it free from 74. That said the move last night above 74 needs to correct first, so seeing it back at 7390 or there a bouts is likely the price needs to go through the building process across 74 and this is the key to building through SG1. The other element is the Euro developing the 144 as the resistance, the more the Euro becomes the resistance the safe any long trade is on the Dollar, in fact you would trade the Dollar long until the Euro was trapped under the 144.
EURUSD 1.4423
TradingLevels: The Euro is still sitting on support while the SP500 continues its counter trend rally higher towards the 1180 – 1190. For the Euro to push higher you want to see solid support on 14430 SG1
(A move above 14520 would also take out the internal bearish wave structure we have been observing starting from the 17th of this month.)
Trade Strategy: Just trade the sublevels support and resistance until we have a clear direction.
AUDUSD 1.0465
TradingLevels: We can have a top in place at the 105 but we need to see the SP500 complete its rally if the AUD is to move lower
Elliott Wave: Not sure if the rally is complete at 10530, we would like to confirm this with the SP500.
Trade Strategy: Just work the levels for the short term, the price is in SG2 so work the 10472 as support or resistance and then use the 10465 as resistance for the trigger lower and the 10480 to get to 10497
Indices
Dow Jones CFD 11,300
TradingLevels: The price will move above 11300 then correct back into 11300, will this be the top of the rally is a wait and see.
Elliott Wave: The rally has passed the 61.8% but is now in the supply (sellers) zone, there is a lot of pressure from 11300 and 11500. Corrections are the tricky part of using Elliott when looking for certainty and more so when working with wave four corrections, wave two correction are simple wave four complicated, triangles, double zigzags etc, the price can move above 11500 and still be in a wave four correction. The Dow Comp and the DJI have not made new lows under their 9th Aug lows but the Dow Transports have.
Trade Strategy: As we are using this market as a guide stick to trade the local ASX, we can say the internal wave structure for the Dow is still impulsing up, we are expecting a top to this rally and the 11300 where the supply starts was my target zone, personally I would wait and see if the 11300 become support or resistance
S&P500 CFD: 1,174
TradingLevels: The supply starts at 1180 there is a gap on the cash around the 1190. We should see a small corrective pattern work into the 1172 as it’s the 61.8% retracement levels but the Dow has worked past its 618% so we can expect the same here
Trade Strategy: We are still looking for the turn of the rally under the 1200, if the 1200 ever became support then we can think about using that support for trading long because it would have taken out the sellers. But for now we have to stay with observation of the structure and not to get trapped.
FTSE 100 CFD: 5231
TradingLevels: Just allow the price to move above the 5200 which its doing now, it should fold back for a correction abc at minimum if it does have an abc correction down through 5200 and then find support back above 5200, then look at longs. These current highs can be the top right up to 5272 SG2, the top of the whole rally just like the Dow at 11300, sure we can be wrong but we have to stay with the facts we have until we have a better picture
Trade Strategy: If the price finds support on the Midpoint 5250 then trade long to 5272 otherwise the price will fall back to 5200 in an abc correction or a top of the rally can be in place, whatever happen the market needs to move to a point that you can work with.
SPI CFD 4208
TradingLevels: The ASX200 and the SPI are still sorting out if the 4200 will become the support or the resistance and this is where the risk is, choosing a side, the support is not established, yes the market can open higher but trade down again, this is a typical Thursday behaviour.
Trade Strategy: Just have to work the MinorLevel (mTL2) 4200 and if the price is above then you need to break it down into the SG1 (4210 I 4220 I 4230) if the price can find the top of SG1 4230 as support then look for further upside to the Midpoint. If the price is under 4200 then the SG2 (4180 I 4172 I 4165) the 4172 as resistance is the keystone here, but of course you can work a higher price short after a retest of 4200.
Summary
The small wave two rallies in the US markets have shown no signs of changing their impulse structures, but I can’t give up on them turning just yet, they are moving into the supply zones now and this is a little more real to me than the 61.8%, so I would like to wait and see how the battle of supply and demand plays out at these current levels before acting.
For trading purposes we need the analysis and the evidence agreeing and then we use the TradingLevels to position ourselves, but at the moment we have the evidence of the indices going up and the analysis looking for a turn lower.
This also obviously makes it difficult for trading the local ASX, but it’s just something we have to be patient and work through, getting the timing right is what we are trying to achieve and when markets spend most of the time in corrections rather than trending we need to be extra careful. The 4200 is the line in the sand for long or short and as you can see on the intraday this is taking time to work out, expect more swings across this MinorLevel but try and tune into it, it’s a little like BHP in the US at 80. We will get the trend whatever direction when its ready.
Trading Quote
"The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, or for the get-rich-quick adventurer. They will die poor." Jesse Livermore
Today's Financial Events
Time Currency Detail Forecast Previous
8:45am NZD Core Retail Sales q/q 0.7% 0.7%
8:45am NZD Retail Sales q/q 0.6% 0.9%
8:45am NZD FPI m/m 1.4%
9:01am GBP Nationwide Consumer Confidence 46 51
4:00pm EUR GfK German Consumer Climate 5.2 5.4
5:15pm CHF Employment Level 4.11M 4.11M
7:00pm CHF ZEW Economic Expectations -58.9
8:00pm GBP CBI Realized Sales -10 -5
10:30pm CAD Corporate Profits q/q 4.2%
10:30pm USD Unemployment Claims 402K 408K
12:30am USD Natural Gas Storage 50B
Day 1 ALL Jackson Hole Symposium
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!
EarlyBird Report – 24 August
Dow Jones Cash 11,031 +1.63%
Base Metals Positive
US Gold CFD: 1850
Oil WTI CFD: 85.67
Copper CFD: 399
US Dollar CFD: 73.93
AUDUSD 1.0520
Dow Jones CFD 11,137
S&P500 CFD: 1,162
FTSE 100 CFD: 5200
SPI CFD 4221
US News
U.S. stocks surged Tuesday as another dose of bleak economic data raised hopes that the Federal Reserve will take additional measures to stimulate the economy.
The Dow Jones Industrial Average rose 322.11 points, or 2.97%, to 11176.76. The steep gains were disturbed momentarily by a magnitude 5.8 earthquake centred in Virginia. Tremors were felt on the East Coast, through Washington, D.C., and up to New York City. But the earthquake failed to rattle investors, as stocks climbed in the final trading hour.
The Standard & Poor's 500-stock index rose 38.53 points, or 3.43%, to 1162.35, as energy, technology and consumer discretionary stocks registered the strongest gains. All 10 of the S&P 500's sectors finished in positive territory. The technology-oriented Nasdaq Composite rallied 100.68 points, or 4.29%, to 2446.06.
Another round of dismal economic reports prompted hopes that Federal Reserve Chairman Ben Bernanke will employ more accommodative measures to boost the economy. The Richmond Fed's regional manufacturing survey showed sharply declining economic activity this month. New home sales also dropped for a third straight month and fell to the lowest level since February.
The downbeat reports have put more of an emphasis on Bernanke's scheduled speech in Jackson Hole, Wyo., on Friday. Investors hope Bernanke will be more open to new easing measures, but at the same time are unclear as to what the central bank may have in store
Commodities
US Gold CFD: 1850
The expected reaction at 1900 is unfolding. The first leg in most corrections I just prefer to observe, as there are twelve corrections and by allowing the first leg to unfold we get to see if there are five waves or three waves, this can half the twelve correction to six types, we also get to understand the general distance the correction will travel.
I can see that the price will move though the Midpoint 1850 this straight away place the price 1830 and this is also in the price territory of 1800, which in turn opens a larger correction again, which points to the 1720 area, so we are likely to 1800 mTL8 come back into play with a larger correction
The other aspect is the US Dollar and the US Indices, the US Indices are in a wave two correction rally, the SP500 should complete its rally into the 1150 – 1200 before move further down, we can narrow that down shortly
Oil WTI CFD: 85.67
Oil rallies on stock. Two main points here the price is developing support on 85 (mTL5) with the resistance at 8650 then 88 (mTL8) the move up is considered a rally and once completed will follow the Indices down. The Indices still have more room to rally for the next session, so this can see Oil higher for the next session, however the actual rally abc structure is in its later stages of completing. We could expect the ASX XEJ Energy sector to rally to 13500 then retest 13000 (TL13) Once our Energy Sector develops 13000 as retested resistance then look towards the MediumLevel 11500 (ML15) and 10,000 (TL1)
Base Metals
US Spot Prices (in l/b)
US Copper: Last: 4.00+
US Nickel: Last: 9.44+
US Zinc: Last: 0.98+
US Aluminium Last: 1.05+
Copper CFD: 399
The price is retesting 400 (ML4) MediumLevel again, it would need to fail here and start to move down now, if it finds support on 400 then we are in for a larger correctional rally to 420, I don’t think this is the case, but we have to trade with the support and resistance price points if we are to create consistency in our trading and analysis.
Forex
US Dollar CFD: 73.93
The internal wave structures for the Euro are suggesting a move down and a move up in the US Dollar, however for the US dollar make sure you have 74 as support then scale in long through SG1 (7410 I 7420 I 7430)
If this is not the case then be short when 73.72 becomes the resistance.
EURUSD 1.4430
TradingLevels: The price is above 144 so the trading bias is bullish.
A move above 14520 would also take out the internal bearish wave structure we have been observing starting from the 17th of this month.
Trade Strategy: While the price is above 144 look for long trade set ups. Longer term traders can look at the 4 hour Robo and short term traders can use the sublevels, the SG1 14430 as support is the key price point for higher ground followed by support on the Midpoint 14450, this is an old high so expect a struggle but eventually support on 14550 is would your looking for. The only problem with the long side is the rally price point for the SP500 is 1150 to 1200 probably the 618% 1172 (SG2) zone.
AUDUSD 1.0520
TradingLevels: Give the price time above 105 to see if it becomes support through a series of retesting 105, any support on top of SG1 10530 is the set up to trade long
Elliott Wave: See charts, Wave (ii) rally in the later stages of the abc.
Trade Strategy: Trade the sublevels as support and resistance. The wave structures are pointing to the upside and being above 105 creates the bullish bias, how long for is the question. The Asian Indices are expected to lift higher than the US indices and we are stuck in the middle, also keep an eye on the Copper market just simply at 400 and the US Dollar above or below 74.
Indices
Dow Jones CFD 11,137
TradingLevels: The price has created five waves (impulse structure) down from the 11500 to the 10800, so now expect a three wave abc corrective rally, once this is complete then expect further downside
Elliott Wave: As mentioned yesterday the 61.8% is the 11200, there is also a trend line resistance around the 11200 however the 11300 is where the supply is so we should work with both of these prices for the rally. Once the volume is in for the day we can use that to understand the power of the move up, but at this stage it’s on lower volume.
The rally up is considered a wave two rally and once completed a move down.
In the bigger picture while this market is under the MediumLevel the pressure is down and we are looking for five waves down from the 11,500 to 10,000
Trade Strategy: Intraday traders look for the 10900 as support or resistance, then use the 10800 to add to shorts or the 11000 to add to longs
S&P500 CFD: 1,162
TradingLevels: Yesterday I mentioned the 1172, well it looks like that is the case, its also the 61.8% retracement level, this is also SG2 (1165 I 1172 I 1180) so this zone can act as one for the resistance. there is also trendline resistance through this zone, this zone does lack the supply (sellers) any way we have to allow it to play out.
Trade Strategy: Look for weakness into the SG2 1172 zone this should be the wave two rally once completed then new lows should be made
FTSE 100 CFD: 5200
TradingLevels: There is more upside structure in the rally, so use the MinorLevel and the sublevels to break down the risk for trading. TL5 of mTL2 of SG1 (5230) is what you need as support, however the 61.8% retracement level is just above 5200 so expect a reaction
Elliott Wave: Wave (ii) abc rally
Trade Strategy: The rally has not turned down and is still displaying series of five waves up and three down, structure is positive. Expect a reaction at 5200 then wait and see if you gain support, if so use that to work the next session and also understand we are looking for a top here and the 5200 is the logical price, the set up here either way needs to be robust you need to be confidence
SPI CFD 4221
TradingLevels: The Australian market will be torn between the US and Asian markets, the rise is limited in the US indices but some of the Asian markets like the Nikkei can rally higher, so you will need to keep this in mind as Asian markets open over the days ahead
Trade Strategy: As always trade the support and resistance of the closest largest number and that is firstly the MinorLevel 4200 as support or resistance, followed by subgroup1 (SG1) above (4210
Summary
The move up in the US is considered a rally, a wave (ii) retracing 61.8% to 11200 or 11300.
The Asian seem to have more legs to the upside in their structures, such as the Nikkei, Indian and Hong Kong, the Shanghai, Shenzhen and the ASX200 are closer in their patterns which will be in the centre between the US short term rally and the other Asian markets in their longer term rallies.
If Copper finds support on 400 this will offer support and strength to the ASX XMJ Materials sector, so for the ASX200 XJO is support is found on 4200 a solid robust support then we can look towards the 4272.
Even though we view this as a rally in analysis terms, trading is a different kettle of fish, we have to trade what we see in terms of price, so we need to protect our short trades, so in most cases we will tighten up the stops to lock in what we can.
Trading Quote
http://usdebt.kleptocracy.us/
One would reasonably think that while US Debt continues to rise the pressure on a bear market would continue, only when it diminishes would one think of normality
Today's Financial Events
Time Currency Detail Forecast Previous
8:45am NZD Trade Balance -99M 230M
9:50am JPY CSPI y/y -0.4% -0.7%
10:00am AUD CB Leading Index m/m -0.1%
11:30am AUD Construction Work Done q/q 1.1% 0.7%
2:05pm CAD Gov Council Member Macklem Speaks
6:00pm EUR German Ifo Business Climate 111.3 112.9
7:00pm EUR Industrial New Orders m/m 0.6% 3.6%
10:30pm USD Core Durable Goods Orders m/m -0.2% 0.4%
10:30pm USD Durable Goods Orders m/m 2.1% 1.9%
11:00pm EUR Belgium NBB Business Climate -3.1 -2.5
12:00am USD OFHEO HPI m/m 0.2% 0.4%
12:30am USD Crude Oil Inventories 4.2M
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!
EarlyBird Report – 23 August
Dow Jones Cash 10,839 +0.21%
Base Metals softer
US Gold CFD: 1888
Oil WTI CFD: 84.35
Copper CFD: 393
US Dollar CFD: 74.14
EURUSD 1.4372
AUDUSD 1.0430
Dow Jones CFD 10,890
S&P500 CFD: 1,125
FTSE 100 CFD: 5100
SPI CFD 4063
US News
DJ US Stocks Keep Paring Gains; DJIA Up 21, S&P 500 Down 1
Commodities
US Gold CFD: 1888
Nearly at 1900 were we can expect a TradingLevels classic pattern, once this is complete a push higher to 2,000 (TL2).
The price should stay above 1850 in the corrective pattern from 1900, essentially finding support in SG2 1865 I 1872 I 1880.
The stock market is in a corrective rally once this is complete and pushes down, which is likely now, in turn will assist Gold to lift higher, the other element holding up is the US dollar, while the US Dollar is above 74 gold will be under pressure to correct at 1900 this is an important element in the mix as it is very real that the US Dollar can push higher from here, this means Gold would struggle at 1900. At least we know there will be trouble at 1900, let’s just allow it to play out.
The ASX GOLD product will push higher if your were long from 144 then hold to 200 (TL2) with 25% at the 180 (mTL8) While the AUD is moving down GOLD will move up, the problem is at 1.00 (TL1) which in turn will be GOLD at 180
Oil WTI CFD: 84.35
On track here as gold follows stock, the bounce off 80 (TL8) is a corrective rally and the target is the 50 – 62% around the 85 (mTL5)
I should point out the pattern of the bounce appears to have the potential to push higher so just be a little careful the US are thinking of some type of stimuli
Base Metals
US Spot Prices (24HR in l/b)
US Copper: Last: 3.95-
US Nickel: Last: 9.49-
US Zinc: Last: 0.96-
US Aluminium Last: 1.04
Copper CFD: 393
The corrective patter at 400 MediumLevel (ML4) is completed and should move down from here if you feel like trading it. It is a failed retest of ML4, expect to see the price under 380 the first MinorLevel however also use the sublevels to add and subtract contracts. Expect a bounce off 380 but once competed the 350 is the following MinorLevel
Forex
US Dollar CFD: 74.14
The two count on the Dollar and the Euro are still playing out and can go either way. However using the Euro and SP500 being in sync, its places the bias of the Euro down and Dollar up.
The supporting line for the Dollar is 7350 but we need to lift this up asap to 7372 then 7400, we could say if the price finds support on 7430 (SG1) then move in long on the Dollar, but be aware the supply is at 7450, another safer way to look at is wait for the Euro to retest 144 and start to fail from there
EURUSD 1.4372
TradingLevels: If the Euro trades under the 14330 then the bias is bearish, if it finds support on 144 its bias is bullish.
Trade Strategy: Short term, work the SG2 14372 be long or short from this level. would expect a retest of 144 from here. Then look for a short from the 144
AUDUSD 1.0430
TradingLevels: The price is in a corrective rally trying to retest 1.05 it is creating lower tops.
Elliott Wave: See charts, Wave (ii) rally in the later stages of the abc.
Trade Strategy: Look for weakness to short
Indices
Dow Jones CFD: 10,890
TradingLevels: The price has created five waves (impulse structure) down from the 11500 to the 10800, so now expect a three wave abc corrective rally, once this is complete then expect further downside
Elliott Wave: small corrective rally off 1800. The 61.8% retracement is 11200 but if the price is going to move there we should bring the target to 11300 as there is no supply at 11200.
Corrections can be in price or time or a mix of both, so we may see the rally already completed at 11,000 this is a reasonable assumption, but only a break under the 10800 can confirm this.
In the bigger picture we are looking for five larger waves down, so the current small five waves down from 11500 to 1080 is just wave one. And we are looking at the wave two abc rally
Trade Strategy: Intraday traders look for the 10900 as support or resistance, then use the 10800 to add to shorts or the 11000 to add to longs
S&P500 CFD: 1,125
TradingLevels: Corrections are the weakest link in using Elliott and we are in one now, that is, we have had five waves down from the 1200 to 1120 so now we are in the abc wave two counter trend rally, which maybe complete and drop from her the 1130 or rally up to 1172 SG2 zone and drop from there
Trade Strategy: If 1130 develops support then trade to 1150, if the price finds the 1120 resistance then expect the price to move down through 1100
FTSE 100 CFD: 5100
TradingLevels: The bounce off 5000 (TL5) is a abc corrective pattern and can be complete.
Elliott Wave: five waves down from 5350 to 4950 then and abc rally close to 5200. So the rally can be complete, but corrections can simply double in size, so you always need to be very careful and use smaller position sizing
Trade Strategy: Look for a short trade from the 5100 as the resistance, but use the 5072 as resistance and trigger. if the price can find support on 5130 then it can push up, but the bias is the price stying under the last high
SPI CFD 4063
TradingLevels: The pattern over the last session at 4100 is corrective and therefor expect a break down
Trade Strategy: the night market is not closed, but you would be looking for a short trade from this overlapping corrective pattern at 4100
Summary
Copper is our guide stick into resources and its moving down out of its corrective pattern, this will drag heavily on the AUD and the XMJ Materials sector, so we will continue to hold short. The European session closed higher based of energy, but that is only a corrective rally in line with stock rally and will be short lived, look to short any rallies, do not be lured into longs, control.
The pattern on the SPI will also see lower ground, the next step is for the market to develop 4000 as the resistance, and once the retested resistance has developed at 4000 (ML4) we can add to current short positions.
The US markets are still bearish on all fronts and expecting lower levels over the sessions ahead, the current intraday patterns are also suggesting downside, as you know the 10,000 (TL1) is the magnet in psychology terms, this would also deliver the impulse wave of Minor degree, meaning five waves down from the 12800 high, once the five waves down are complete, expect a ABC rally then another five waves down in the next leg around the 7,200
Trading Quote
"There are no certainties in this investment world, and where there are no certainties, you should begin by understanding yourself."
Today's Financial Events
Time Currency Detail Forecast Previous
1:00pm NZD Inflation Expectations q/q 3.0%
2:00pm AUD RBA Deputy Gov Battellino Speaks
4:00pm CHF Trade Balance 1.83B 1.77B
5:00pm EUR French Flash Manufacturing PMI 50.4
5:00pm EUR French Flash Services PMI 53.1 53.2
5:30pm EUR German Flash Manufacturing PMI 51.2 52.0
5:30pm EUR German Flash Services PMI 52.1 52.9
6:00pm EUR Flash Manufacturing PMI 49.7 50.4
6:00pm EUR Flash Services PMI 51.1 51.6
6:30pm GBP BBA Mortgage Approvals 32.3K 31.7K
7:00pm EUR German ZEW Economic Sentiment -24.6 -15.1
7:00pm EUR ZEW Economic Sentiment -6.2 -7.0
8:00pm GBP CBI Industrial Order Expectations -13 -10
10:30pm CAD Core Retail Sales m/m 0.4% 0.5%
10:30pm CAD Retail Sales m/m 0.6% 0.1%
12:00am EUR Consumer Confidence -12 -11
12:00am GBP MPC Member Weale Speaks
12:00am USD New Home Sales 316K 312K
12:00am USD Richmond Manufacturing Index -7 -1
3:00am CAD Gov Council Member Boivin Speaks
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!
EarlyBird Report – 22 August
Dow Jones Cash 10,817 -1.60%
Base Metals steady
US Gold CFD: 1850
Oil WTI CFD: 82.70
Copper CFD: 397
US Dollar CFD: 74.98
EURUSD 1.4392
AUDUSD 1.04
Dow Jones CFD 10,837
S&P500 CFD: 1,125
FTSE 100 CFD: 5000
SPI CFD 4068
US News
U.S. stocks closed down Friday and notched its fourth straight losing week, as investors continued worrying about a potential global recession and the health of the European banking system.
The Dow Jones Industrial Average closed down 172.93 points, or 1.57%, to 10817.65. The index swung 284.99 points from its session highs to the lows in another volatile session. The zigzag action comes after the blue-chip index tumbled 419.63 points on Thursday. The 5.19% drop over Thursday and Friday's trading is the biggest two-day percentage drop since March 2, 2009.
Commodities
US Gold CFD: 1850
The reaction at SG2 (1865 I 1872 I 1880) is corrective and will produce new highs to 1900.
The current price is sticking to the Midpoint 1850, there is a space for the price to move to 1830 but the bias is for the price to find support on the midpoint before moving higher. The current correction to the Midpoint is a wave four, they can get complicated, however once completed will push higher above the 1872 towards 1900. The upside target is the MajorLevel TL2 2,000, this has been the target since it found support on the MediumLevel 1500, this is how the TradingLevels work and we will be doing the same thing at TL2
Oil WTI CFD: 82.70
The five waves down (impulse) from 88 (mTL8) to 80 (TL8) are completed and the three wave abc counter trend is under way, the bounce off 80.
The fives wave down from mTL8 to TL8 is considered wave one and the bounce as wave two, once this wave two is completed wave three down will start.
The wave two abc bounce off 80 can move to 83 or 85 the 40 to 60% normal range, this will depend on stock.
For traders that have been short from the failed retest of 100 (TL1) can add again once 80 (TL8) goes through the process of the retest of TL8 /80 as resistance. of course you can scatter positions above 80 during the bounce but the risk percentage must be managed and be within the overall percentage risk of the trade
Base Metals
US Spot Prices (24HR in l/b)
US Copper: Last: 3.98+
US Nickel: Last: 9.61-
US Zinc: Last: 0.98-
US Aluminium Last: 1.04-
Copper CFD: 397
Copper’s rally is simply part of the process of moving lower, the rally is the retest of supply that we see as a number the MediumLevel ML4 / 400.
We can expect this rally to fail and move lower, but as traders we follow rules, so a move above ML4 and the bias is positive. So the entry here, is the failed retest of ML4 /400. If you break the entry strategy down into the lower levels, so the 380 is the first MinorLevel and the 390 is the midpoint in this case, so 390 as resistance is a trigger and a place to add contracts. Breaking it down further from 390 to 400, the midpoint is 395 so this is also a trigger once it becomes the resistance the important numbers from 395 to 400 are 398 and 397.20 and 396.50 All that said use the 395 as the resistance. too short, to be on the more safer side.
Forex
US Dollar CFD: 74.98
This market is working into a corner, into the 74, this time when it finds the 74 as support or resistance should be the next trend.
Technically on the actual index a move under the 74.45 and its bearish and a Wave 5 down.
On the derivatives the 74.50 is the bearish trigger. From a trading point of view the first element is the 74 as S/R then in applying contracts the SG1 above 74 (7410 I 7420 I 7430) for scaling in long and below is SG2 (7380 I 7372 I 7365) the 7372 is the pivot, also look for add under the Midpoint 7350. If this is the case then we can look at 72
EURUSD 1.4392
TradingLevels: The Fibo number 144 as support or resistance is getting closer, don’t fall asleep this week, look to build in a longer tern trade from this price point. Get ready to use the sublevels either side of the 144.
Trade Strategy: work the sublevels SG1 and SG2 for long and short
AUDUSD 1.04
TradingLevels: Use 104 as support or resistance to trade from. The Elliott count is downwards towards 1.00
Elliott Wave: Five waves down for 106 close to 103 makes Wave (i) the rally up to 10480 is Wave (ii) this wave may not be complete but once it is then expect Wave (iii) down through 103, wave (iii) should be 161.8% of Wave (i) in length
Trade Strategy: Short if 104 becomes resistance using SG2 (1.0380 I 1.0372 I 1.0365) especial the 72.
On the long side if the top of subgroup1 10430 becomes support trade long to the Midpoint exit and wait for support.
Indices
Dow Jones CFD 10,837
TradingLevels: The retest of the MediumLevel 11500 as Minor Wave 4 is completed and Wave 5 down is unfolding. In this Wave 5 there will be five smaller waves and out of these five smaller waves wave one is completed and wave two is either still unfolding or completed, once it is completed then wave three four and five will unfolds down to make Wave 5.
Intraday support coming form these numbers 10,800, 10,772, 10,720 and 10,650 as a group or zone of support, beyond this is 10,500. We should expect a bounce from the zone mentioned, if however this zone becomes the resistance then add to shorts on the Dow and the stocks on the ASX
Elliott Wave: Minor Wave 5 down
Trade Strategy: Intraday traders need to work through these price points 10,800, 10,772, 10,720
S&P500 CFD: 1,125
TradingLevels: Yes the main trend is down, but there can be a bounce rally off the 1,100 back 1,172, this may not be the case but is has to go on the table, we will know more about this as the pattern unfolds into 1,100. If this is not the case then we can short from the price finding the 1,100 resistance and use the SG2 sublevels to short from (1080 I 1072 I 1065) especially the 1072 as resistance this is the main key under the 1,100 for the short
Trade Strategy: Understand the wave count but also understand the sublevels, in this case we will see a bumpy ride from SG1 (1110 I 1120 I 1130 ) and the 1,100
FTSE 100 CFD: 5000
TradingLevels: If you were short from the 5300 then understand the wave count within reason so you know when to add to the position.
Elliott Wave: The first five waves down are unfold and are two thirds complete, these five waves will be wave (i), which should be under the 5000, the a Wave (ii) abc then a wave (iii) down and so on, in line with the SP500… Minor Wave 5
Trade Strategy: Same - Understand the wave count so you can build in positions, it may take two or three session but you want the 5000 as resistance, it may pay to sprinkle very small position all around different prices, because we are looking for a move under the 4500. You also should know the 4800 and the 4772 are old lows and strong resistance, you can get a bounce back from 4800 to 5000 you need to allow for this, gotta put your thinking cap on, future favours the brave, but manage the risk, less is more.
SPI CFD 4068
TradingLevels: 4000 ML4 MediumLevel is the line in the sand. Expect a bounce but expect the price to end up as resistance.
Wave count, five waves down from 4300 to current low 4030 which we can label as Wave (i) and the Wave (ii) is underway now
Trade Strategy: I don’t know if the Wave (ii) is complete, so expect a bounce off the 4000 or SG1
Summary
Indices, you know Wave 4 is finished and we are in Wave 5 down. Within this Wave 5 down there is going to be five smaller waves… we are seeing wave (i) completing and Wave (ii) underway, once this Wave (ii) is completed then expect Wave (iii), (iv) and (v) down to complete the Wave 5. Most markets are in this pattern with only slight variations.
Base metals and oil are also in the same boat, the only unknown is the US Dollar which upsets the apple cart as we usually can use this as a leading indicator but we don’t need it in this case. However the Dollar and the Euro should become clear this weak and we will be looking to build a trade. The bias should stay with the Euro following the SP500, but theory and analysis is one thing and trading is another, let’s see if the 144 develops as support or resistance for the Euro this will also make other pairs clearer. The AUD is just following stock as the patterns are the same
ASX stocks, if Copper fails the retest at 400 then the XMJ Materials sector is down.
The XXJ & XFJ Finance is rolling over from its rally in line with the weaker US banks.
So we will continue to short this week, the fly in the ointment is the ASX200 XJO support at 4000 (ML4) expect a bounce, but when it does become the resistance add to shorts.
Please Check For ASX Ex Dividend & Reporting Dates:
Tip, If a stock is in a weekly trend down and goes ex dividend it normally gaps further than the div and will continue down, If the Weekly trend is up and the stock goes through Div it will drop to the div amount or less and recover in a week or so. This is all really amount the larger momentum or rather the flow of volume. If you have trouble working out where the volume momentum is, watch the volume video’s in the education section online courses, then look at your stock on a monthly chart at look and read the monthly volume, this will help. Volume is the reality price is the shadow.
Trading Quote
Success actually can stimulate fears about failing and about the impossibility of success. These increased anxiety levels may result in self-destructive behaviour and a succession of losing trades that bring the trader back to the starting point.
Today's Financial Events
Time Currency Detail Forecast Previous
12:00am USD Mortgage Delinquencies 8.32%
12:30pm CNY HSBC Flash Manufacturing PMI 49.3
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!
EarlyBird Report – 19 August
Dow Jones Cash 10,900 -3.68%
Base Metals Negative
US Gold CFD: 1824
Oil WTI CFD: 82.40
Copper CFD: 392
US Dollar CFD: 74.32
EURUSD 1.4320
AUDUSD 1.0380
Dow Jones CFD 10,950
S&P500 CFD: 1,133
FTSE 100 CFD: 5047
SPI CFD 4142
US News
Stocks tumbled amid growing fears of a global recession, as investors confronted a grim mix of U.S. economic data and fresh concerns about Europe's banks.
The Dow Jones Industrial Average fell 435 points, or 3.8%, to 10974. The Standard & Poor's 500-stock index dropped 53 points, or 4.5%, to 1141, while the Nasdaq Composite lost 124 points, or 4.9%, to 2387.
In the flight to safety, investors piled into gold, which jumped to a new record above $1,820 a troy ounce. In the Treasurys market, the yield on the benchmark 10-year note briefly dipped below 2% in intraday trading for the first time since at least 1954, as investors sought refuge in U.S. debt.
"If it's not a recession, it sure feels like one. And if it feels like one, it doesn't matter if you can prove it with statistics or not," said John Hailer, president and CEO of Natixis Global Asset Management in the U.S. and Asia. "We have some real tough problems in front of us, and we really need some leadership in corporate America and Washington.... There's a lot of nervousness in the market."
The heaviest selling came in energy and materials stocks. Among Dow components, United Technologies fell 5.3%, Alcoa lost 5.8%, and Caterpillar tumbled 4.5%. Among big oil firms, Chevron lost 4.8%, and Exxon Mobil was off 4.4%.
Bank stocks were also under significant pressure. Bank of America was the biggest decliner among the Dow components, tumbling 6.2%, while J.P. Morgan Chase lost 4.5%.
Commodities
US Gold CFD: 1824
The first high above the level 1800 is unfolding, as mentioned the price is normally trapped within SG1 1830 before we see the retest of 1800.
The start of this TradingLevels Classic pattern was when it first arrived at 1800 on the 10th August, The arrival, the reaction, the support, the first high above the level, then the ABC correction then the move higher to the Major level TL2 / 2,000 where a larger TradingLevels Classic pattern will occur
Oil WTI CFD: 82.40
The move here will depend on Stock, but 72 jumps to mind, however there is the little matter of 80 (TL8) MajorLevel. The Minor Group1 83, 82 and 81 will slow the move down as it filters through the covering and buying orders sitting at these levels and we should see the bounce of 80, the bounce would be in three waves ABC, the normal would be 61.8% of the move down from 88 (mTL8) but the main supply point would be around the top of Minor Goup1 83
Base Metals
US Spot Prices (24HR in l/b)
US Copper: Last: 3.95-
US Nickel: Last: 9.65-
US Zinc: Last: 0.97-
US Aluminium Last: 1.03-
Copper CFD: 392
Under MediumLevel 4 (ML4) 400 is negative, in its rise yesterday it could not develop any support on the sublevels in a real way, any way it’s clear the next leg is underway and the basis on this statement is the structure, that is the first five waves are nearly complete, meaning after a three wave rally another five waves will unfold down and then another
Forex
US Dollar CFD: 74.32
If the Euro locks under 143, then the bias is bullish for the US Dollar and bearish for the Euro, which would be in line with stocks, I feel better about this scenario, so we will go with that in our analysis.
So, with that in mind we can start working the US wave count up, from the 7350 we can start counting the first five waves up to 7450 – 7472 area then three back as the abc counter trend. If correct this should be the start of a long trend up, so building a trade is the strategy but you need to work out your tactics for managing the risk and the positions.
We can talk about ideas, such as starting with the 1 hour Robo, then developing the trade into the 4 hour Robo then the Daily then the weekly and monthly etc, then main point is managing the percentage risk on each new position that it fits into the percentage of risk of the whole trade
EURUSD 1.4320
TradingLevels: The price moving under the 143 creates the bearish outlook, because of over lapping wave structures; this is also in line with stock.
Trade Strategy: The price should not go back above the 14330.
The first five waves down from the last high around the 145 are still unfolding, which could end down around the 142, once the first five waves down ends then and abc rally say 50% then another five waves down. We will also need to line the larger move up with indices, meaning the Dow heading into 10,000 and the SP500 into 1,000 can have a high bounce or a low bounce which would affect the Euro. Any way we will start giving the pathway in this direction though.
AUDUSD 1.0380
TradingLevels: The 105 is the support, even though it hasn’t been fully retested, the target has been the 61.8% just above the 106.
Elliott Wave: That’s the top of the rally, close the 61.8% around 106. The price will work low is a series of five waves down and three waves back as abc counter trend in line with indices
Trade Strategy: Scalping is fine with the sublevels and micro levels but for trend trading, you need to have the first five waves down for Wave (i) competed then the abc rally for Wave (ii) this is where the short should happen from, this will take another session or two for this set up to fall into place, it will also be the same for the indices. We will be working on this.
Indices
Dow Jones CFD 10,950
TradingLevels: 10,000 is next MajorLevel target. The Dow works to every hundred points and this is great for trading, but the focus is 10,800, 10500, 10,300, 10,200, 10,100 these are all minor level in the Fibo ratio as price. The 11,000 is also important and that is would the traders are thinking of now, but the consolidation at this price point is corrective a continuation pattern once complete expect further downside. It is important to understand the wave count now
Elliott Wave: Minor Wave 4 is completed at the MediumLevel 11500, we are now looking at Minor Wave 5 unfolding down towards 10,000 Major Trading levels TL1
Trade Strategy: Work each Minor trading Level as support and resistance, the 11,000 is the resistance and likely the wave four. The 10,800 then the 10,500 there is also each 100 points and 10,772 and 10,650 that you should be aware of.
S&P500 CFD: 1,133
TradingLevels: We should see the first five waves down to 1100 as Wave (i), then a abc rally for Wave (ii) then Wave (iii) and so on, through the 1,000
Trade Strategy: Trend traders can stay with the daily Robo and scalpers scalp from the levels
FTSE 100 CFD: 5047
TradingLevels: If you were short from the 5300 then understand the wave count within reason so you know when to add to the position.
Elliott Wave: The first five waves down are unfold and are two thirds complete, these five waves will be wave (i), which should be under the 5000, the a Wave (ii) abc then a wave (iii) down and so on, in line with the SP500… Minor Wave 5
Trade Strategy: Understand the wave count so you can build in positions, it may take two or three session but you want the 5000 as resistance, it may pay to sprinkle very small position all around different prices, because we are looking for a move under the 4500. You also should know the 4800 and the 4772 are old lows and strong resistance, you can get a bounce back from 4800 to 5000 you need to allow for this, gotta put your thinking cap on, future favours the brave, but manage the risk, less is more.
SPI CFD 4142
TradingLevels: It’s quite clear the rally as wave 4 is completed and Wave 5 down is underway. In wave 5 there will be five smaller waves, we are still in the first wave on of those five. The first small five waves will be fron the 4300 to 4100 roughly then and abc counter trend then another five down that should pick up speed, moving through the 4000
Trade Strategy: If you were on the right side of 4272 you would be short, after the five waves down are completed, scale out into 4100 but leaving some in the market in case it drops further, but what you’re looking for the abc rally a 5-4-5 wave structure and short that. We will talk more about this, because it will be a wave three trade, fast.
Summary
Dow, I have worked with 11500 in the previous bear market and was preparing for a longer stay here, so I glad it was short and sweet as a retest. Any way that completes Minor Wave 4 and Wave 5 is under way with 10,000 (TL1) as the target, the target is just a guess I haven’t looked at the wave ratio’s yet, but the point to understand is this Wave 5 is the last of the five wave structure from the last high under the 13000. So the Elliott storey would be five waves down from the below the 13000 to 10,000 then a three wave ABC counter trend back up, normally 61.8% of the five waves, but we will talk about that shortly, after the ABC counter trend then we should see another five waves down, but this set of five wave will be part of a larger structure and a third wave, meaning the market should pick up speed to the down side. The top of this ABC is where we will be looking to short the US indices and Stock, this is where the money is, as long as ASIC doesn’t ban short selling
PS Check For ASX Ex Dividend & Reporting Dates
Trading Quote
"The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds."
Today's Financial Events
Time Currency Detail Forecast Previous
8:45am NZD Visitor Arrivals m/m -5.1%
1:00pm NZD Credit Card Spending y/y 4.5%
2:30pm JPY All Industries Activity m/m 2.3% 2.0%
4:00pm EUR German PPI m/m 0.2% 0.1%
6:30pm GBP Public Sector Net Borrowing 0.4B 12.0B
9:00pm CAD Core CPI m/m 0.2% -0.6%
9:00pm CAD CPI m/m 0.2% -0.7%
10:30pm USD FOMC Member Dudley Speaks
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!
EarlyBird Report – 18 August
Dow Jones Cash 11,410 +0.04%
Base Metals Positive
US Gold CFD: 1790
Oil WTI CFD: 87.69
Copper CFD: 403
US Dollar CFD: 73.76
EURUSD 1.4450
AUDUSD 1.0565
S&P500 CFD: 1,190
FTSE 100 CFD: 5320
SPI CFD 4265
US News
Stocks battled to a slight loss in late trading as investors weighed earnings from some high-profile retailers against signs of rising input costs and continued dissatisfaction over efforts to find a solution to Europe's debt woes.
The Dow Jones Industrial Average shed 21 points, or 0.2%, to 11385 in recent trading, after being up 124 points earlier in the session. The Standard & Poor's 500-stock index fell two points, or 0.1%, to 1191, while the Nasdaq Composite fell 19 points, or 0.8%, to 2504.
Leading the decliners were technology and consumer-discretionary stocks. Hewlett-Packard fell 3.9% to lead the Dow laggards, after rival Dell tumbled 10%. Investors dumped shares in computer-maker Dell after it reported slowing sales and lowered its full-year revenue target. Dell said it expected revenue to climb 1% to 5% for the year, lower than its previous range of 5% to 9%, as it faces a challenging sales environment.
Commodities
US Gold CFD: 1790
Expect the Classic TradingLevels pattern across 1800 (mTL8).
Counting five wave from the last low 1720 area to above 1800 (SG1).
The Classic pattern, a reaction at 1800 then creating the first high above the level 1800 then a larger correction above and below 1800
Oil WTI CFD: 87.69
There is the beginning, middle and end to a trend in any time frame and each section has a certain look, the beginning is a building process, with sharp declines, the centre is normally the strongest and longest and the end is a little like the beginning, in that there are overlapping wave structures where the price is creeping along, this is sign that its tied and ending and this ending process is what we are seeing in Oil starting at 85 to 88 yes it can push higher. The move down from 100 to roughly 75 was on increasing volume and the current move up on diminishing volume another sign of weakness for that degree of trend
Base Metals
US Spot Prices (24HR in l/b)
US Copper: Last: 4.03+
US Nickel: Last: 9.92+
US Zinc: Last: 0.99+
US Aluminium Last: 1.06+
Copper CFD: 403
Above 400 the MediumLevel is a positive sign.
The path of positive steps is, support on 403 then 405 then 410.
It hasn’t managed to find support on 403 before over the last three weeks, let’s see if this occurs first. Coppers pattern over the last weeks hasn’t moved up like other markets, was this weaker or just lagging? Either way any move up here will strength the outlook for growth
Forex
US Dollar CFD: 73.76
The next important line in the sands are 7350 (Daily double bottom) and 72.
For trading purposes work the SG2 zone and especially the 7372
Patterns, as you know we are working two patterns for the Dollar and of course the Euro, we are now moving into the juncture where we can eliminate one of the patterns, will post intraday Euro charts today with both counts
EURUSD 1.4450
TradingLevels: Two larger counts, one bearish one bullish, the Triangle pattern for the bearish count has the top in place now at the last high last night. Or the Bullish count that will see the market find support above 143 and push higher. If we look at it from the US indices point of view the Euro should go down
Trade Strategy: The price is still traveling the natural path across the 144 level and still has more work to do here, because of two wave counts we don’t know the break of the larger picture, so using the 144 as support or resistance is the next logical step and this may take a few session to really sort out. If it’s going to be bearish then look at the last time it was above 144 around the 25th and study the retest of the 144 resistance, the path it traced out.
Short term the current move up of the 14430, if the price can find support on 14450 then trade to 14465 and 14472, this is where the supply and resistance starts and where it can fail for a short.
AUDUSD 1.0565
TradingLevels: The 105 is the support, even though it hasn’t been fully retested, the target has been the 61.8% just above the 106.
Elliott Wave: There are two ways to count the ABC rally, there will be the ones on the charts and a different one here in the EarlyBird, this way you can be aware of both situations. There is good support say from the 10450 up to 105 so until the price move down through this support the trend is up and supported
Trade Strategy: Work the SG2 10565 I 10572 I 10580, the important pivot is the 10572 as support or resistance
Indices
Dow Jones CFD 11,400
TradingLevels: A move under the 11300 is a bearish sign
Elliott Wave: Unsure if the Wave 4 is now completed at 11500 or is there another push higher and of course will the 11500 become support, we are in the thick of it here and we simply need to allow the price to play out. You know, we think this is just a rally and we are looking for a top, you also should know if support on the 11500 is found then we will trade long, we are simply being patient in the aim of getting our timing and direction in this case right
Trade Strategy: Depending on your time frame, but if your trading the 100 game then if the price finds support on 11400, scale in through SG1 and trade long to the 11450 take 75% and wait for support on the midpoint, then trade to 11465 or 11472 and exit. If the 11400 becomes resistance the use SG2 and especially the 11372 as resistance to move in short
S&P500 CFD: 1,190
TradingLevels: The Dow at 11500 and the SP at 1200 are working through the resistance, we are unsure if the these resistance levels will hols to see the markets fall from here of eventually find support, it doesn’t really matter what happens, we just need to wait for the market to tell us what to do. The volume aspect the first week in the rally had strong volume and this week has had low volume, so there isn’t any follow through volume for the trend up, this would be a sign of weakness
Trade Strategy: Wait… or use the Daily Robo
FTSE 100 CFD: 5320
TradingLevels: The 5300 is the line in the sand, so use SG1 above and SG2 below to scale in long or short.
Elliott Wave: The top can be in place, but the evidence is required
Trade Strategy: be on the right side of 5300. Use SG1 above and SG2 to short (5272 as resistance)
SPI CFD 4265
TradingLevels: The 4300 as support or resistance is the focus. This is the top of Minor Group1 and success of failure here creates the bigger picture, we are in Elliott terms looking for a top here, but as always we need the evidence either way
Trade Strategy: Use the 4272 as support or resistance and be on the right side of that.
Summary
The battle of support and resistance is being played out at the levels we have been talking about with the Dow at 1150 the SP500 at 1200 and the SPI /ASX200 at 4300, we are in the thick of it at the moment and the markets can move either way from here, you know in Elliott terms we are searching for a top here, but we will use the levels to rule this out, simply be using the levels mentioned as support and if we see this levels failing as support we know what to expect on the down side. We also understood before getting to these levels this would all take time.
I could have done a better job with putting longs out especially in the reporting seasons but my thinking was, that if the market did turn many trades are reluctant to get out of the longs.
If you are trading long use the daily weekly or monthly Robo to protect any position if the market does turn down, the bigger picture on the US Indices certainly have a reasonable case that this current move up is a rally and the job of a rally is to get every one long, once we are all emotionally drawn in, there is no one left to push the market up
PS. Check For ASX Ex Dividend & Reporting Dates
Trading Quote
"Look for the setup that scares you the most. That's the one you probably need to trade. Don't expect to feel comfortable until an active position finally closes out. If it feels too good, everyone else will trade it the same way and become the crowd."
Today's Financial Events
Time Currency Detail Forecast Previous
9:50am JPY Trade Balance -0.12T -0.19T
6:30pm GBP Retail Sales m/m 0.3% 0.7%
10:30pm CAD Leading Index m/m 0.5% 0.2%
10:30pm CAD Wholesale Sales m/m 1.5% 1.9%
10:30pm USD Core CPI m/m 0.2% 0.3%
10:30pm USD Unemployment Claims 403K 395K
10:30pm USD CPI m/m 0.2% -0.2%
10:35pm USD FOMC Member Dudley Speaks
12:00am USD Existing Home Sales 4.92M 4.77M
12:00am USD Philly Fed Manufacturing Index 4.2 3.2
12:00am USD CB Leading Index m/m 0.2% 0.3%
12:30am CAD BOC Review
12:30am USD Natural Gas Storage 25B
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!
EarlyBird Report – 17 August
Dow Jones Cash 11,443 -0.34%
Base Metals Flat
US Gold CFD: 1780
Oil WTI CFD: 86.57
Copper CFD: 398
US Dollar CFD: 74.05
EURUSD 1.44
AUDUSD 1.0450
Dow Jones CFD 11,450
S&P500 CFD: 1,200
FTSE 100 CFD: 5330
SPI CFD 4220
US News
U.S. stocks fell in choppy early-afternoon trading, as investors expressed disappointment over proposed measures from European officials to strengthen euro-zone fiscal governance.
Commodities
US Gold CFD: 1780
The move up is looking more like an impulse wave than a corrective wave.
Technically as long as it stays above 1750 consider it bullish.
However the move up will need to be corrected so it can pull back 61.8% that is around the 1750m but there is support around the 1760 and above within SG2.
Expect a pullback here at the 1780 or at 1800, but the trend has the appearance of pushing higher through 1800 after a corrective process
Oil WTI CFD: 86.57
Oil is and will have problems with 88 (mTL8) The profit taking number. The sublevel half way between 85 and 88 the 8650 is the balance line at this current high. A move under 85 is a breakdown of the trend, even under the 8650 is the start. This is much the same pattern as the Dow, which you can see on the 30 minute chart.
Base Metals
US Spot Prices (24HR in l/b)
US Copper: Last: 3.99-
US Nickel: Last: 9.80-
US Zinc: Last: 0.97-
US Aluminium Last: 1.05
Copper CFD: 398
The pattern at the MediumLevel ML4 / 400 appears corrective in its structure, a move under the 395 can trigger an impulse wave down, creating the start of the next trend down and under 390 would confirm this, this of course is a locking under the 400 as resistance and that’s what its doing now, but the small pattern under the 400 can also be bullish corrective and can move back above, we need to see five small waves down, a failing of the current retest at 400 for the evidence of the next leg down.
Forex
US Dollar CFD: 74.05
In the bigger picture, the Euro and the DXY have two probable larger patterns (Triangles) that can sent the markets either way, looking at the direction and wave count of the SP500 as bearish in the bigger picture would have the Euro moving down and the DXY up. So the current high in the Euro can be a top of the last leg in the triangle and the DXY current low the low, a move below 73.50 for the Dollar would create a bearish outlook for the Dollar and a bullish scenario for the Euro, and this would create and bullish picture for the SP500 and the AUDUSD and this was not our thinking. Analysis is analysis and trading is trading and trading for me is using support and resistance, if the wave count can confirm the direction great, if not I still go with support and resistance. If the 144 on the Euro finds support then we will add to the long side.
EURUSD 1.44
TradingLevels: This current high can be the top of the daily triangle, but if the 144 finds support then we will add to the small long position we have around 143. A move under the 14350 creates the start of a break down in the trend up.
Trade Strategy: If 144 does become support, then scale in through SG1 14410 I 14420 I 14430, if the top of SG1 becomes support then the price will move higher to the midpoint. Also look for the DXY to lock under 74.00
AUDUSD 1.0450
TradingLevels: The 105 is giving grief to the AUD as expected, but should push up through as there is more to unfold in the wave structure, the 106 is the 61.8% retracement level.
The SP500 and AUDUSD are moving in sync…
Elliott Wave: We are considering the move up from 1.00 a rally in line with the SP500 the structure is an ABC and are now in the later stages of the Wave C of the ABC, we are looking at a wave five to move above 1.05 in due course
Trade Strategy: Once above 105 find a way in long, the 4 hour Robo should have you long again (SG1 – 10430+) after shorting from the 105 area. / being on the right side of SG2 today (10465 I 10472 I 10480, the 10472 is the balance line)
Indices
Dow Jones CFD 11,450
TradingLevels: As long as the price stays above 11300 the market is bullish.
The resistance is as you know 11500, but my thoughts were that the price would push above 11500 but fail to find support in the end. But of course it can fail at 11500, this is something that just has to play out and we were looking towards the and eight day rally because of the thirteen day bear in the last leg, but Fibo works better with price rather than time, there is still something that we are missing on the time aspect using Fibo a puzzle unresolved. That said we were looking at the weekly cycle for the high Wed close or Thursday morning
Elliott Wave: Wave 4, this corrective rally is messy, its hard to count, so I was looking at the AUDUSD wave count because our Dollar is in sync with the SP500 and the AUDUSD at 105 still has another wave 5 to going in the Wave C of the ABC rally
Trade Strategy: The SG2 11465 I 11472 I 11480 are the front line resistance’ the price is battling to get to 11500 (ML15) The comments above have given space to a move higher above 11500, but the high can also be in place now, there is no evidence of this, but a move under the 11300 would be confirmation but of course we can edge in higher like the 11350 and the 11472, with the expectation that the 11472 will hold. Day traders can use 11444.
S&P500 CFD: 1,200
TradingLevels: The rally can finished here at 1200 or a push higher to 1220/30
Trade Strategy: The SP500 and the AUDUSD are moving in sync so if the AUD pushes higher then expect the SP500 to push higher.
FTSE 100 CFD: 5330
TradingLevels: The 38.2% retracement level has been met around the 5400 target and now we are starting to see a little weakness, the FSTE does have a relationship with the Australian market and I think that has also reached its rally target as other Asian markets are turning down from there rallies..
Elliott Wave: If the 5300 becomes resistance then think short also use the SG2 5272 as this is the subtle support
Trade Strategy: The price action over the last few sessions is either putting a top in place or a larger correction for the upside, but because of the Asian markets rolling over somewhat the bias can be bearish, so looking for he set up is next the 5272 is a key as a resistance. we will talk about this more in the video
SPI CFD 4220
TradingLevels: If the price locks under the 4200 then its connects with the 4000 again, if it had found support on 4300 the top of Minor Group1 then it would be free to move higher and that maybe that’s the case but unlikely as other Asian market are rolling over somewhat.
So it’s likely the rally is coming to an end, the wave four rally is likely to be over and the next move down under way.
The price under the 4200 is part of the evidence required. But remember the next degree higher the 4000 is still the support, but locking under the 4200 allows for the 4000 and the 3800 low to be tested. We also need to see the evidence from the SP500 and the AUD
Trade Strategy: Trade the sublevels as support and resistance until the bigger picture is clear
Summary
It’s only natural to see the Dow struggle at the MediumLevel 11500 and can expect another push higher, however the Asian markets may have completed their Wave 4 rallies, we understood the 4300 for the ASX200 is critical as support and resistance and we are seeing a failing there. If we can see the Hang Seng back under 20,000 (TL2) The Shanghai under 2550 then we have the first leads the rally is completed. The AUDSUD is one of the leading indicators of the rally and that still seems to have another push higher to complete its rally and the importance of this is that it is in sync with the SP500.
I’m probably, like usual making this complicated, but the point is that there is the first glimmer of evidence that the rally up and in most cases around the world a Wave 4 rally has ended in some cases or is close to ending. It’s not about being right or wrong in the guessing game, but to make us aware of possibilities so we can be proactive in our process and this means looking for short trades on the daily Robo, it also means scaling in, using very small position sizes because there is risk, we don’t have the full evidence of a turn, we have not seen the first five waves down in the US indices, so we can get trapped… The ASX200 locking under 4200 is important and weak banks are also required not only here but in the US as the economy doesn’t move without the banks.
Any way we were looking for the Dow to fail at the 11500 – 11650 and we haven’t seen that yet, we are just getting lost in the detail, we were thinking an 5 or more so 8 day rally because of the 13 days down and that the weekly cycle would deliver the high on the Wed or Thursday in the US. It is a time to reduce longs and if the 4300 becomes support then go back in long we are just at the juncture of risk and we should move with it.
PS. Check For ASX Ex Dividend & Reporting Dates
Trading Quote
"Not risking is the surest way of losing. If you do not risk, risk eventually comes to you. There is simply no way to avoid taking a risk. If a person postpones taking risks, the time eventually comes when he will either be forced to accept a situation that he does not like or take a risk unprepared."
Today's Financial Events
Time Currency Detail Forecast Previous
8:45am NZD PPI Input q/q 1.2% 2.2%
8:45am NZD PPI Output q/q 0.8% 1.7%
10:30am AUD MI Leading Index m/m -0.1%
11:30am AUD Wage Price Index q/q 0.9% 0.8%
5:30pm USD PPI m/m 0.0% -0.4%
6:00pm EUR Current Account -3.6B -5.2B
6:30pm GBP Claimant Count Change 20.2K 24.5K
6:30pm GBP MPC Meeting Minutes 2-0-7 2-0-7
6:30pm GBP Average Earnings Index 3m/y 2.3% 2.3%
6:30pm GBP Unemployment Rate 7.7% 7.7%
7:00pm EUR CPI y/y 2.5% 2.5%
7:00pm EUR Core CPI y/y 1.7% 1.6%
10:30pm CAD Foreign Securities Purchases 10.33B 15.40B
10:30pm USD Core PPI m/m 0.2% 0.3%
Aug 18 12:30am USD Crude Oil Inventories -5.2M
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!
EarlyBird Report – 16 August
Dow Jones Cash 11,482 +1.90%
Base Metals steady
US Gold CFD: 1765
Oil WTI CFD: 87.80
Copper CFD: 403
US Dollar CFD: 73.92
EURUSD 1.4450
AUDUSD 1.05
Dow Jones CFD 11,468
S&P500 CFD: 1,200
FTSE 100 CFD: 5390
SPI CFD 4300
US News -
U.S. stocks advanced Monday, wiping out last week's losses, as corporate deal making helped send blue chips to their first three-day winning streak in six weeks.
The Dow Jones Industrial Average finished 213.88 points higher, or 1.90%, to 11482.90, closing near session highs for a third straight advance. The last three-day string of gains for the blue-chip Dow ended July 1. Markets have grown increasingly volatile in recent weeks amid worries of an economic slowdown and debt problems in the U.S. and Europe.
The Standard & Poor's 500-stock index ended with a 25.68-point gain, or 2.18%, at 1204.49, led by the utility and energy sectors. The technology-oriented Nasdaq Composite gained 47.22 points, or 1.88%, to 2555.20. All three indexes wiped out their losses from last week.
Motorola Mobility soared 56%, leading the S&P 500, after Google agreed to acquire the company for about $12.5 billion in cash. The move was seen helping Google compete more directly with Apple in the competitive mobile-communications industry. It also gives Google a trove of coveted mobile-device patents. Google's shares lost 1.2%
Commodities
US Gold CFD: 1765
The rally target off 1700 is the 61.8% retracement at 1780 and expect the 1772 and the 1780 (SG2) to at least create a short term top, after this short term top if the market finds support on 1172 then it can push higher to retest 1800.
The target to the downside around the 1650 is still on the cards, however I would also like to stay with the pattern at the 1800 as the Classic pattern at a level in this case the 1800 and that is when the price first reached the 1800 (the arrival) it was sold off (the reaction) looking for support (support) the current support at 23.6% 1720 is the minimum requirement for the retracement and is acceptable. If this is the support, then the next part in the process of the Classic pattern is the first high above the level, normally within SG1, in this case under the 1830, once this first high is in place then a larger ABC correction will take place above and more so below the 1800 (mTL8) MinorLevel.
So the first high above the level would be up in five waves (impulse wave), so count five waves from the 1720.
The flip side is that the move up at this stage can be corrective retracing to the 61.8% 1780 this would be in three wave abc, if it is an small abc to 1772 – 1780 then new lows would form in five waves down towards 1680 – 1650
So there is a small juncture we have to see the market unfold before we can make a clear decision, that is five or three waves up.
We are not missing out on anything here… if you were long the stop would need to be at 1737 and you would be trading to 1772, 1780 and 1797. The supply resistance is from 1772 to 1800.
Oil WTI CFD: 87.80
The support on 85 (mTL5) holds for the retest and moves with stock to the next MinorLevel target 88 (mTL8).
In the larger pattern this is a retest of the MediumLevel 90 (ML9) the price will push above 88 but expect a corrective pattern across mTL8.
The 88 and 90 is the 50 – 62% retracement levels, for a bullish count the price would need to prove itself and that would be finding solid support on 90, if this occurred the Dow would have support on 11500 and the SP500 on 1200 and the ASX200 on 4300 then we can consider long positions as a prospect.
Base Metals
US Spot Prices (24HR in l/b)
US Copper: Last: 4.03+
US Nickel: Last: 9.60+
US Zinc: Last: 0.98+
US Aluminium Last: 1.05-
Copper CFD: 403
From a trading point of view the MediumLevel ML4 / 400 is the line in the sand, the more support here the more potential for the upside, so support on 405 then 410 is would you’re looking for on the long side, any move under the 397 and the short is in play.
We have been taking of this current move up as a rally and we will stay with that until proven wrong in the analysis, however support is support and is part of the setup, if 105 becomes support then one small position long and I mean small as it can fail at 108 or 110, if the 110 finds support add the second small position. On the downside if the 398 is retested as resistance and fails you need to be short. This trading game is not about being right or wrong in the analysis, it’s about being on the right side of the closet largest number.
Forex
US Dollar CFD: 73.92
The last retest of 74.72 and the breaking through 7465 (SG2) and then the Midpoint 74.50 creates the short here, the next part in the process is the 74 becoming the resistance, the price will flicker around in a small fourth wave correction before moving down further, we can look towards 73, but understand the sublevel between 74 and 73, the sharp move down was a small wave three, so there a series of fourth and fifth waves to play out under the 7350 to 73, so what you see is not what you get in terms of structure, what you see from 75 to 7450 is what you will get.
EURUSD 1.4450
TradingLevels: The price should now create support above 144
Trade Strategy: If your long from 143, well done, if you’re going for the long term leave the stop under 143 until the 144 has been tested as the support. If you’re not long then wait for a pullback to check the strength on the trend, you may get lucky and we will see a quick test of 144, but you may have to use the support that will develop on 14450. If you are long look to add a small position anywhere here between 144 and 145
AUDUSD 1.05
TradingLevels: The 105 will see a correction and abc then a move higher
Elliott Wave: Counting the structure from the 101 on the 10th as an impulse wave should see a abc correction at 105 then a move to 106
Trade Strategy: The Robo did not get you short it kept you long, just be careful at 105 as a time consuming wave four may be about to unfold, but the target is the 61.8% at 106
Indices
Dow Jones CFD 11,468
TradingLevels: ok we are now reaching the MediumLevel 11500, just setting back a little to keep things in perspective. In the medium term view and that is working with the MediumLevel 11500, what this means is giving it room to move so we don’t jump to any wrong conclusions, the 11500 is the line in the sand to be long or short, however we do need to allow it time to develop as support or resistance. Firstly the upside, that is the first high above the level of 11500 is 11650, it’s from the 11650 that we are likely to see the main retest of 11500, it is this retest that we are interested in, will this retest fail to find support or will it find support, this is the basis for being long or short. This will be the same for the SP500 at 1200 and the ASX200 at 4300 and the AUDUSD at 105 this is the point that we trade from, we just need to wait to find out which way we are going.
Elliott Wave: Wave 4
Trade Strategy: If you have been long from 11300 to 1150 then great, however lighten up here at 11500 we should expect swings across this level. but the reality is the trend is up so stay long until proven otherwise, just reduce into 11500 until you have it as support
S&P500 CFD: 1,200
TradingLevels: The Wave for rally target is the 38.2% around the 1200. If support is found here like the Dow at 11500 then we have to look higher to 1260.
Trade Strategy: Waiting for the 1200 to show up as support or resistance, a move back under 1172 would be the short side. Regarding what occurring now, the price is edging higher, the 1200 will play a part, the 1230 SG1 is likely to create the first small first high above the 1200 level for the retest back onto 1200, its only after this process that we can work out if we are going to get the 1200 as support or resistance. Yes we are treating the move up as a rally, however if support is going to be found on 1200, then we would trade to the 61.8% level the 1260, which is turn would see our ASX200 at 4500
FTSE 100 CFD: 5390
TradingLevels: The resistance in terms of supply will thicken up between 5400 and 5500
Support on 5300 is a positive sign and would be long on support on top of a group1
Elliott Wave: The rally continues, however support on 5300 Minor Group1 (MG1) off the bullish element in trading terms for a minor degree trade to 5500 and support on 5500 would see further upside.
Trade Strategy: Much the same as the last post, scaling in on 5300 (MG1) and SubGroup1 (SG1) 5310 I 5320 I 5330 then the Midpoint. Scaling out through SG2 then waiting for the 5400 support and repeating the process through the Sub groups
SPI CFD 4300
TradingLevels: The 4300 (mTL3) a MinorLevel but also the top of Minor Group 1 this has significance, support here separates its self from the 4000, subtle but important to work with.
The Dow will also be working with 1150 and the SP500 1200 support on all these levels creates the trade up. We should also consider the process of pattern that can occur at a level, as of now the price has just arrived at all these levels on these indices. The two normal patterns are the ‘Overshoot’ and the ‘Classic patterns’
Trade Strategy: The SPI has reasonable support starting at the Midpoint 4250 then at SG2 2465 I 4272 I 4280, so any corrective pattern that occurs at 4300 will be looking for these supports under 4300. It’s normal to expect a corrective pattern at whole number and in this case the 4300 (mTL3) and the top of Minor Group1. The sublevel SG1 4310 I 4320 I 4330 are important and one would trade to 4330 and exit, wait for the top of subgroup1 4330 to becomes the retested support and move back in and trade to the midpoint.
It’s a good idea to also observe the Dow Futures. The Shanghai will have subtle resistance at 2650 but more at the 2700 to 2720 this is a key area to observe and use as support or resistance, support here would see the price at 2800 for the Shanghai, the other one to watch is the copper market, support on 405 is a start but support on 410 is part of the driving element of strength
Summary
The leading markets are the AUDUSD, SPI, Shenzhen, with the Dollar Index breaking to the low side and the Euro to the upside this further supports the current rally in indices.
Indices - What we have been waiting for is support or resistance at certain price points.
The support we are waiting for is the Dow at 11500, the SP500 at 1200 and the ASX200 at 4300 all of these markets are close or have arrived at these levels, but it’s not enough for them to simply touch these numbers they need to play out at these levels and that can take some time, this playing out is what we are going to be taking about over the days ahead, there are two basic patterns that play out at the price levels the Overshoot and the Classic patterns, there are in the Online video courses in the education tab.
We are still considering the moves up as rallies and we need them to reach their targets as mentioned above and then play out their patterns at these levels, ending up as support or resistance so we will trade long or short from that situation, this playing out of patterns simply takes time and a lot of emotion comes and goes, this is why we pick out certain markets and hedge our bets with small positions and generally keep busy in a positive proactive manner.
We have long and short trades open in the markets and we are waiting for the medium term picture to offer the markets as support or resistance, that’s the bottom line and can take another three days to sort out, for the Dow we were looking at 13 days down so 5 or 8 days as a ratio rally is about right
PS. Check For ASX Ex Dividend & Reporting Dates
Trading Quote
"A poor chess player can still make a remarkable move." - Wang Yinggui
Today's Financial Events
Time Currency Detail Forecast Previous
11:30am AUD Monetary Policy Meeting Minutes
12:00pm CNY CB Leading Index m/m 0.5%
4:00pm EUR German Prelim GDP q/q 0.5% 1.5%
6:30pm GBP CPI y/y 4.3% 4.2%
6:30pm GBP RPI y/y 5.0% 5.0%
6:30pm GBP Core CPI y/y 3.1% 2.8%
6:30pm GBP DCLG HPI y/y 0.9% -1.6%
7:00pm EUR Flash GDP q/q 0.3% 0.8%
7:00pm EUR Trade Balance 0.3B -0.6B
Tentative GBP BOE Inflation Letter
10:30pm CAD Manufacturing Sales m/m -0.3% -0.8%
10:30pm USD Building Permits 0.61M 0.62M
10:30pm USD Housing Starts 0.60M 0.63M
10:30pm USD Import Prices m/m 0.0% -0.5%
11:15pm USD Capacity Utilization Rate 77.0% 76.7%
11:15pm USD Industrial Production m/m 0.5% 0.2%
Tentative USD Loan Officer Survey
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!
»TOP
EarlyBird Report – 15 August
Dow Jones Cash 11,269 +1.12%
Base Metals Negative
US Gold CFD: 1746
Oil WTI CFD: 85.35
Copper CFD: 399
US Dollar CFD: 74.66
EURUSD 1.4246
AUDUSD 1.0353
Dow Jones CFD 11,283
S&P500 CFD: 1,180
FTSE 100 CFD: 5320
SPI CFD 4150
US News -
European equity markets rallied for a second session Friday after several countries introduced short-selling bans.
U.S. blue-chip stocks pared some early gains following a weaker-than-expected reading on consumer confidence as investors braced for the end of one of the most volatile weeks in Wall Street history.
The Dow Jones Industrial Average was recently up 34 points, or 0.3%, to 11177, led higher by Walt Disney, which rose 2.7%. Hewlett-Packard gained 2.5% and Caterpillar rose 2.3%. It earlier gained as much as 151 points. A closing gain on Friday would be the index's first back-to-back rally since July 7.
The Standard & Poor's 500-stock index gained 1 point, or 0.1%, to 1173, led by energy and industrial stocks. The measure hasn't had two-straight sessions of gains since July 22. The technology-oriented Nasdaq Composite fell 5 points, or 0.2%, to 2488.
Investors pulled back early gains after an indicator of consumer sentiment showed a sharp fall in August. The consumer sentiment index from Reuters/University of Michigan tumbled to 54.9 in mid-August, down sharply from 63.7 in late July. Economists had expected the reading to ease only to 62.
Consumer confidence data came after retail sales, an important indicator of consumer spending and typically a major driver of economic growth, rose 0.5% in July. Consumers spent more on gasoline, electronics and other merchandise, potentially easing concerns that Americans are pulling back.
"The data show all the wheels aren't falling off the U.S. economy," said Seth Setrakian, co-head of U.S. equities at First New York Securities. "It's not great, but it's sluggish and consistent with the slow growth profile the economy has been exhibiting."
Commodities
US Gold CFD: 1746
The abc correction down is unfolding in the right way, it has touched on the Fibonacci 23.6% close to the 1720 (72) also a low of the previous fourth wave of two lesser degrees (it’s normal for a price to bounce off 23.6%), however we were expecting the structure to come further down to the 38.2% 1672 (SG2). It may not come this far down but its best to start from the outside and work in.
Traders think would be thinking the financials would be stabilising and this is why gold is pulling back, but for we are looking at the Wave 4 rally in the SP500 to complete around 1200 once this Wave 4 structure is completed and starts to edge down then gold will push up, so observing these two markets wave count would be helpful to get a feel of what’s happening
Oil WTI CFD: 85.35
The Elliott count has a top in place for Oil, but the evidence is required and 85(mTL5 Midpoint) as resistance is part of that evidence, because at the moment the price is retesting 85 this price point for support and the internal wave structure down from 87 to 85 is so far corrective in structure, three waves, in can turn into five wave (impulse) but its hasn’t has yet. If we did see five wave down, that would be evidence, we enough to consider the first short position and the short would be after the five waves down then the counter trend three waves back up abc and probably the failed retest of the 85, the second position would be once the price is locked under 82 then under 80. But for now 85 to 8450 is support and the trend is up in line with stock.
Base Metals
US Spot Prices (24HR in l/b)
US Copper: Last: 3.98-
US Nickel: Last: 9.65-
US Zinc: Last: 0.97-
US Aluminium Last: 1.06-
Copper CFD: 399
The main trend is down for copper and base metals, the support area around the 380 and the pattern above that is corrective, this pattern is much the same as stock, yes it can rally higher 410 – 420 (50/62%) or it can stay around the 400 but once its completed the trend will continue down and this will reflect in the Materials Sector on the ASX and China.
The above is analysis, from a trading point of view, you chose your time frame which naturally accommodates the distance of price and being on the right side of the closest largest number, as an example a trader that holds for a few days and wanted to go long he would need the 400 as support or short 400 as resistance, then building into the market on the next smaller degree of price the MinorLevels.
Forex
US Dollar CFD: 74.66
The Dollar and the Euro have been range bound, the better trends have been on other pairs. Once a market goes into a range bound pattern it’s natural to focus on other markets and forget about the non-moving range bound market, but you must keep an eye on it, because range bounce markets are like a spring slowly being loaded and when they are set to go they hardly require any volume what’s so ever to set them off, this is most common for triangles, but it’s true for many corrections, the early stages of a correction carries a lot of volume and the end of a correction doesn’t.
If the Dollar find support on 75 then trade long. the Euro has the range of 144 and 140, but that can be narrowed now to 142 and 143, either of these price levels as support or resistance should be the start of the set up and the first small position for that direction.
EURUSD 1.4246
TradingLevels: The Euro has two possible large daily wave counts and we have had the trading range of 1440 and 140, but this can now be narrowed to 142 and 143, when either of these becomes the support or the resistance we can look to find set ups in that direction
Trade Strategy: 143 as retested support for longs or 142 as retested resistance for short trade set up. Also using the 144 or the 140 as support or resistance to add positions.
AUDUSD 1.0353
TradingLevels: The rally pattern here is the same as the ASX200, SP500 etc.
Elliott Wave: The 38.2% retracement level price point is really pegging the market, that relates to the 104 or the SG2 10365 I 10372 I 10380
Trade Strategy: The 4 hour Robo may have you short soon. Friday Sat closing to Monday start is best avoided but you know that… If the 10372 can become support then the 104 has a chance of support. If not above the 10372 is the stop for the 4 hour Robo short.
If your scalping, 10, 20 or 30 points, then understand how to use the sublevels that is individually and as groups, SG1, Midpoint and SG2 and of course each full point. You will need to also understand the two basic patterns that occur at a level the overshoot and the classic pattern, understanding these will help you in understanding how support is developed and when to enter. I would be using this on a 2 minute chart for gleaning 10, 20 30 points, you can also use the two minute Robo to protect the trade when your trading from one level to the next, take profit at the next level then wait for support again. The MACD can be handy to help with the patterns at the levels to get the timing right, use the high low of each histogram bar, moving higher or lower a bit like the Robo method, not the line crossover
Indices
Dow Jones CFD 11,283
TradingLevels: The corrective rally is still in progress, the MediumLevel 11500 has been the target, but anywhere from the 38.2% 11,400 to 11650 is the likely target zone.
The trend down as a Wave 3 was thirteen days so a Fibo ratio for the Wave 4 rally would be 5 or 8 days, if the Wave 4 was going to get into a complicated affair but staying in the 11500 – 11650 range it could extend out to 21 days, we just have to wait and see what develops.
Elliott Wave: Wave 4
Trade Strategy: Short term traders would be looking at 11300 for support or resistance to trade long or short. The Dow works to each 100 points so should you.
S&P500 CFD: 1,180
TradingLevels: The Wave for rally target is the 38.2% around the 1200. If support is found here like the Dow at 11500 then we have to look higher to 1250, but lets just work with our main targets first 1200 on the SP and 11500 on the Dow
Trade Strategy: Let’s just see how much the price struggles at 1172 to 1200 a failed retest would create a short and that’s the set you can look for, even selling right on the 1200 keeping a tight stop
FTSE 100 CFD: 5320
TradingLevels: 5300 is the top of Minor Group1 so support on this level carries supportive weight, the 38.2% retracement level is around 5400, so if Wave 4 is going to be correct then we are likely to see 5300 fail as support, but perhaps we will see the price go to 5400, then come back and retest 5300 for support and fail…
Elliott Wave: Wave 4 is not completed, like other indices its simply doubling in size, the 5400 was the 38.2 % retracement level. Looking for five waves up from the last low, just below the 5000 for the Wave C up…
Trade Strategy: Depending you’re your trading time frame, scalpers would be looking for 5300 as the basis for support and trade up through the sublevels working SG1 of mTL3 (MinorLevel 5300) (SG1 5310, 5320, 5330) If support is found on 5330 then trade to 5350 the Midpoint
SPI CFD 4150
TradingLevels: The price will be looking for 4200 as the support? The trend from 3800 to 4100 was powerful, the trend from 4050 to 4200 is weak, it has created overlapping wave structures, this is a creeping corrective process. So we will stay with the whole move being a wave four. I would only change if the top of Minor Group 1 4300 offered a strong support.
Elliott Wave: In Wave c of the ABC Wave 4
Trade Strategy: Intraday traders on the long side need to wait for the price to develop a retested support either on 4200 or 4230 (top of SG1) What you have to watch out for is the 4200 not holding as support and a larger correction unfolding or the ABC as Wave 4 being completed. The volume each day in the trend up has been diminishing not expanding. If a short trade was to play out, look for the 4200 to have a retest as resistance for the first position the 4172 as a retested resistance for the second
Summary
It’s the same story as last week, we see these rallies in most indices as corrective, once completed the trend will continue down.
Targets, Dow 11400 – 11650 with 11500 being the centre of attention, the SP500 1200. ASX200 4300 if not lower as the volume is diminishing which is also probably coming in from off shore as the AUDUSD has the same pattern.
At what point should we be concerned.
If the ASX finds support on 4300. The Dow on 11500 and the SP500 on 1200.
It is fine for the price to trade above these price points but waiting to see if they find the support is the test. This is as simple as I can get it…
As mentioned the main trends down in the US appear to be impulse waves and the moves up corrective in their architecture, so the main trend for the US markets is down and I would expect the others like our to follow. This is fine as analysis but trading is another thing.
Trading, we track the market setting orders up in front of the market, to allow the market to trad for us, this takes the guesswork and the emotion out of the picture. What you have to do is get the money management working and the first step there is most people over trade, if you $3,000 you can trade 100 shares, this way you can stay in the game, it does not take long to build an account and the Robo method can do that for you, we have been doing that with CBA. Indices and Forex can be quick to take your money if you’re not working to a solid plan.
PS Check For ASX Ex Dividend & Reporting Dates
Trading Quote
"...our visual and decision environments are filtered to us courtesy of our eyes, our ears, our senses of smell and touch, and the master of it all, our brain. By the time we comprehend and digest information, it is not necessarily a true reflection of reality. Instead, it is our representation of reality, and this is the input we base our decisions on. In essence we are limited to the tools nature has given us, and the natural way in which we make decisions is limited by the quality and accuracy of these tools."
Today's Financial Events
Time Currency Detail Forecast Previous
9:01am GBP Rightmove HPI m/m
9:50am JPY Prelim GDP q/q -0.6% -0.9%
9:50am JPY Prelim GDP Price Index y/y -1.7% -1.9%
11:30am AUD New Motor Vehicle Sales m/m 1.3%
15th-16th CNY Foreign Direct Investment ytd/y 18.4%
All Day EUR French Bank Holiday
All Day EUR Italian Bank Holiday
5:15pm CHF PPI m/m -0.5% -0.5%
10:30pm CAD New Motor Vehicle Sales m/m 2.4% -6.1%
10:30pm USD Empire State Manufacturing Index 0.8 -3.8
11:00pm USD TIC Long-Term Purchases 30.4B 23.6B
Aug 16 12:00am USD NAHB Housing Market Index 15 15
16th -19th GBP Nationwide Consumer Confidence 51
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!
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