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EarlyBird Report – 29 July

Dow Jones Index -0.51% 12,240
US Dollar Index +0.18% 74.23
US August Gold (Globex) 1612
WTI Oil (Globex)   97.38
Copper (Globex) 442
US BHP -0.66% 92.30
Base Metals: positive
AUDUSD 1.0980
EURUSD 1.43
SPI 4418
ASX200 4463

US News
Growing jitters about the U.S. debt ceiling debate just days ahead of the looming Aug. 2 deadline weighed heavily on emerging-market currencies Thursday, while emerging-market debt continued a modest winning streak.

While markets are largely still expecting U.S. policymakers to reach a deal to cut the federal deficit and lift the debt ceiling at the last minute, investors took caution on emerging-market currencies, showing little conviction to place riskier bets.

Commodities

US Gold Futures 1612
The move down in gold appears corrective at this stage but it’s just a little too early to tell, we need to see the market unfold a little further, a corrective pattern down means more upside. A move above 1620 would confirm it as corrective as current there are three waves (abc) down, we just need to see if the three waves turn into five waves (impulse). But just for the mean time expect a move back down below 1600. Support sitting on 1620 can create a trade to 11630.

Oil WTI (Globex Futures) 97.38
The move down from the 100 is now more like the SP500. The move has developed five waves  to the 9650 sublevel, we are move seeing the abc counter trend up then we should see another five waves down to 95. The current rally could come back 61.8% to the 99 but the current 98 does satisfy the actual structure. The main point is there is weakness here, however support on 98 can create a quick trade long and while the price is under 98 look for short trade set ups, the 9720 is one price you should have as resistance

Base Metals

US Spot Prices (24HR in l/b)
US Copper:           Last: 4.44+
US Nickel:             Last: 11.12+
US Zinc:                Last: 1.13+
US Aluminium       Last: 1.17+

Copper (Globex Futures) 445
The aim is to see copper above 450 as support, the current support has lifted over time from 430 to 440 so it should only be a matter of time before we see it above 450, there is still selling pressure at the 450 but the demand is chipping away at it.

Forex

US Dollar Futures (c) DXY 74.38
The US Dollar has five waves up off its low and the Euro has five waves down from its high, both should now see abc counter trends, once these abc three waves structures are completed then these market should continue in the direction of the first five waves .  The abc structure can retrace 61.8% of the initial five waves

EURUSD 1.43

TradingLevels: From the last high around 145, there have been five waves down (impulse wave) this should now see a three wave counter trend, an abc.  The first resistance or rather supply (sellers) is at the SG2 zone 14365 I 14372 I 14380 and this would be seen as a retest of the Fibo/Gann 144 which is also a longer term balance line
Trade Strategy: After the 143 has been tested for support you can scalp the long side using SG1 of 143, but you are moving against the trend, there will be headwinds, sharp pullbacks. If the 143 becomes the resistance then simply look to the short side and use the 14272 SG2 for resistance and triggers, normally it the 72 becomes the resistance use the 65 as the trigger covering at the Midpoint 50

AUDUSD  1.0980

TradingLevels: The norm, with an overshoot pattern, that is when the price arrived at 110, it did not react, it just shot straight on through, so the distance it travelled above the 110, is the distance it is likely to travel back below, that would see the price at 10920 SG1
Elliott Wave: abc wave four pullback across mTL1 / 1.10 is still in play
Trade Strategy: Scalp the sublevels while in a corrective price action. The structure down is still unfolding look for a bounce of SG2 to retest 110 mTL1

Indices

Dow Jones Futures CFD 12,300

TradingLevels:
The price pattern is unfolding an impulse wave down (five waves), we should see the price at 12200 the 61.8% retracement level in the next session. The price is currently working through 12300, after the initial bounce of support it will weaken and the 12300 will become the resistance and the price will drop to 12200 and see another bounce, an abc larger rally before seeing further downside
 Elliott Wave: ABC pull back to 12200 - 12172
Trade Strategy: Down to 12200

S&P500 CFDs 1,302

TradingLevels:
Expecting a move through 1300 to at least 1290 as a wave five, as we are looking at five wave down from the last high around 1350, once these five wave are completed we should see a move up
Trade Strategy: Scalpers, wait until 1300 is the resistance to get to 1290 and perhaps lower to 1280. As you can see there is support in the SG2 zone 1280 I 1272 I 1265 and we are expecting a larger pattern, the Triangle to complete in SG2. The Wave E of the ABCDE Triangle

FTSE 100 Futures 5827

TradingLevels: Work a short trade around the 5800, expect bounce off 5800 then a move down through then the retest of 5800 as resistance.
Elliott Wave: On the daily chart the SP500 and the FSTE have the same pattern that is the large triangle, so the current move down is the Wave E. We are in the Wave E, the Wave E has an ABC pattern, We are in the Wave C and in the Wave C there are five waves, we are in the later stages of those five waves which should complete the large ABCDE Triangle the same as the SP500. Also there is a chance this is not a Triangle, but a larger bearish picture unfolding, but whatever its going to be it will work itself into a corner and we will know when it comes out of that corner, this will be next week
Trade Strategy: Wait for 5800 to lock in as resistance to trade short ranges short, sublevels

SPI Futures 4440

TradingLevels: Expect a move to 4400, then a bounce then down through 4400 to SG2 4380 I 4372 I 4365 then a retest back up to 4400
Elliott Wave: Five wave unfolding down, the low of wave three will on 4400 then a wave four across 4400 then a wave five down to 4372 SG2 area
Trade Strategy: Keep trading ranges within the sublevels while navigating the 4400

Summary

In the big picture for the US and UK, we need to hold two wave counts in mind, one long one short.
The long is considering these indices are in a very large daily Triangle and the Short side is considering the Indices are actually rolling over. We won’t rely on opinions, we wait for the evidence to unfold.

Next week the market will work itself into a corner and when it comes out we will know which one it is and we will trade in that direction. I will do my best to explain this in the video today.
One of the concerns for the market making its mind up in a quick move is the August 2 deadline for the US pollies to agree on a debt package, this is going to be the tricky guessing bit.

Any trading done up to this point of knowing the direction will be short term.

I’m leaving this summary short, because this is the main point we have to prepare for, this will influence Indices and currencies.

One other point, is that the ASX Earning season will be in full swing next week, so check on what’s reporting and research the reviews before trading

Trading Quote
"Markets always go to extremes and so do most individual stocks. They go higher or lower than they should based on fundamentals because human emotions are not bound by reason."

Today's Financial Events
Time     Currency   Detail     Forecast    Previous
  
8:45am  NZD        Building Consents m/m     2.2%  
9:01am  GBP        GfK Consumer Confidence    -26 -25  
9:15am  JPY        Manufacturing PMI     50.7  
9:30am  JPY        Household Spending y/y    -2.2% -1.9%  
9:30am  JPY        Tokyo Core CPI y/y    0.2% 0.1%  
9:30am  JPY        National Core CPI y/y    0.5% 0.6%  
9:30am  JPY        Unemployment Rate    4.6% 4.5%  
9:50am  JPY        Prelim Industrial Production m/m    4.6% 6.2%  
11:30am  AUD        Private Sector Credit m/m    0.4% 0.3%  
3:00pm  JPY        Housing Starts y/y    4.9% 6.4%  
4:00pm  EUR        German Retail Sales m/m    1.6% -2.8%  
4:00pm  GBP        Nationwide HPI m/m    -0.1% 0.0%  
4:45pm  EUR        French Consumer Spending m/m    0.4% -1.5%  
6:30pm  GBP        Net Lending to Individuals m/m    1.3B 1.3B  
6:30pm  GBP        M4 Money Supply m/m    0.3% 0.1%  
6:30pm  GBP        Mortgage Approvals    46K 46K  
7:00pm  EUR        CPI Flash Estimate y/y    2.7% 2.7%  
7:00pm  EUR        Italian Prelim CPI m/m    0.2% 0.1%  
10:30pm  CAD        GDP m/m    0.1% 0.0%  
10:30pm  CAD        RMPI m/m    1.4% -5.2%  
10:30pm  CAD        IPPI m/m    0.4% -0.2%  
10:30pm  USD        Advance GDP q/q    1.6% 1.9%  
10:30pm  USD        Advance GDP Price Index q/q    2.0% 2.0%  
10:30pm  USD        Employment Cost Index q/q    0.5% 0.6%  
11:45pm  USD        Chicago PMI    60.2 61.1  
11:55pm  USD        Revised UoM Consumer Sentiment    64.1 63.8  
11:55pm  USD        Revised UoM Inflation Expectations     3.4%

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 – 28 July

Dow Jones Index -1.59% 12,300
US Dollar Index +0.76% 74.08
US August Gold (Globex) 1613
WTI Oil (Globex)   97.30
Copper (Globex) 442
US BHP -1.53% 92.91
Base Metals: Negative
AUDUSD 1.10
EURUSD 1.4365
SPI 4450
ASX200 4537

US News Wire
Treasury prices slipped Wednesday because of a mediocre five-year note auction and another day of continued political gridlock about raising the debt ceiling.

Yet the selling was partly offset when euro-zone sovereign debt problems resurfaced in the afternoon, spooking some investors into buying Treasurys.

The two-way flows underscore the dilemma confronting global market participants--while the stalemate in Washington puts the value of Treasury bonds in question, there are still few, if any, alternatives that can match the depth and liquidity of the Treasury bond market, which has long been considered the go-to safe-haven for investors during times of risk.

Commodities

US Gold Futures 1613
The price failed to get above 1630 the top of subgroup1 (SG1) The aim is to trade it from 1600 to the top of SG1 exit and then wait to see if support comes in, if not a larger correction at 1600 will unfold. So now is the waiting, a move under 1610 brings it back to 1600.

Oil WTI (Globex Futures) 97.38
Oil follows stock and would see the oil price lower firstly at 9650 and possibly 95, this should also follow the correction in Gold, a three wave ABC correction while US and UK indices complete the Wave E of a Large Triangle

Base Metals

US Spot Prices (24HR in l/b)
US Copper:           Last: 4.40-
US Nickel:             Last: 11.01+
US Zinc:                Last: 1.12+
US Aluminium       Last: 1.17-

Copper (Globex Futures) 442
As mentioned yesterday, the TradingLevels Classic pattern, the arrival (450) the reaction then support, we are still in the reaction looking for support. Other metals such as nickel held up well and with copper we can look for support at the 440 - 338

Forex

US Dollar Futures (c) DXY 74.26
The low of wave three into the 73.50 we were talking of yesterday in now in place and the Wave (iv) up to the wave four of once lesser degree 74.50. The current wave four up should be in three swings, abc, this current move up is the first wave a

EURUSD 1.4365

TradingLevels: While the Euro is above 140 the structure up is positive. We can expect a move down to 14272 then a retest of 144.
Trade Strategy: Consider this move down Wave a of a abc correction, the Wave a low should be around the 14272 SG2 – 143 then a bounce up in three waves for Wave b, 50% of Wave a then the Wave c back down to the Wave a low 14272 area or lower. Once this abc is completed then a push higher

AUDUSD  1.10

TradingLevels: The abc pattern is unfolding across 1.10, expect the price back to 10950
Elliott Wave: abc wave four pullback across mTL1 / 1.10 this is a normal and standard process.
Trade Strategy: Same - Traders with the longer term trade from 106 can start scaling out into 110 and after the abc correction at 110 move back, once the price is supported. Sub and Micro traders trade the levels. But expect corrective price action into the 10972 group2 and the Midpoint 10950 zone

Indices

Dow Jones Futures CFD 12,300

TradingLevels:
Yesterday we talked of a move down to 12300, however looking at the internal structure the current move can move lower, the 61.8% retracement is 12200 a move below the 12100 places the Dow into a more serious top, we need for the other markets to play out, that is the SP500 FSTE Dollar
 Elliott Wave: ABC pull back to 12200 - 12172
Trade Strategy: Same - Under 12500 is at least minimum short term bearish

S&P500 CFDs 1,300

TradingLevels:
Counting five wave down from the 1350 last high, which should see the end of the five waves inSG2 1272 – 1280. The move down last night is the strong third and the low of the third will be the bounce off 1300, the bounce will be the wave four and the wave five down through 1300 to 1280 area. Once this is completed we should see a move up
Trade Strategy: Bounce off 1300 then down through 1300 to complete the large triangle wave E, we will talk about this and the bigger picture in the video

FTSE 100 Futures 5800

TradingLevels: Work a short trade around the 5800, expect bounce off 5800 then a move down through then the retest of 5800 as resistance.
Elliott Wave: On the daily chart the SP500 and the FSTE have the same pattern that is the large triangle, so the current move down is the Wave E
Trade Strategy: Wait for 5800 to lock in as resistance to trade short ranges short, sublevels

SPI Futures 4440

TradingLevels: Under 4500 is bearish, expect a bounce off 4400 then down again
Elliott Wave: We are seeing a larger five waves down from the 4600, the price is well into wave three to 4400 then a wave four bounce and a wave five down
Trade Strategy: Short with a bounce off 4400 then down again for wave five

Summary

The SP500 and the FSTE are moving down to complete a larger Wave E of a Triangle, however we need to talk about this in the video, as mentioned early in the month, we have had these triangle looking patterns before at the 2007 highs, these current patterns in the US and UK Indices are the same looking patterns, so we need to talk about these patterns and where to draw the line and develop trading tactics for long term moves.

The 61.8% for the Dow is at 12200 the current price is 12300, the SP500 is expected to move lower to 1280/72 SG2 after a bounce off 1300.
The ASX200 will move under 4500 and as you know under the 500 be it the Dow under 12500 or the ASX200 under 4500 is a bearish signal, it is also the breaking of the 61.8% retracement level. when working around large levels like 4500, we use and work the first sublevels in this case the SG2 4480 I 4472 I 4465 from a trading point of view if and when the 4472 is retested as resistance, we would use the 4465 as the trigger to short, this is basic strategy and van be view in other ways and refined, the bigger picture once the price has given the 4500 a solid retest and is failing we need to be net short.

As mentioned yesterday in the Day Trading section on the site, hedging was best done with the SPI, simply because the sellers would be there first, stocks had upside momentum that has and will change somewhat today. The point is the price being under 4500 is not a good look for long positions; this is the cutting point, it is better to pay small brokerage than sweating it out watching profits turn into losses. Don’t get caught in the car head lights, be proactive and set orders up in front of the market

Trading Quote
"Every man takes the limits of his own field of vision for the limits of the world."

Today's Financial Events
Time     Currency   Detail     Forecast    Previous
  
7:00am  NZD        Official Cash Rate    2.50% 2.50%  
7:00am  NZD        RBNZ Rate Statement      
9:50am  JPY        Retail Sales y/y    -0.6% -1.3%  
5:55pm  EUR        German Unemployment Change    -16K -8K  
8:00pm  GBP        CBI Realized Sales    2 -2  
10:30pm  USD        Unemployment Claims    412K 418K  
12:00am  USD        Pending Home Sales m/m    -1.0% 8.2%  
12:30am  USD        Natural Gas Storage     60B

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 – 27 July

Dow Jones Index -0.73% 12,501
US Dollar Index -0.79% 73.52
US August Gold (Globex) 1615
WTI Oil (Globex)   99.50
Copper (Globex) 447
US BHP +1.05% 94.84
Base Metals: Positive
AUDUSD 1.0842
EURUSD 1.45
SPI 4520
ASX200 4573

US News Wire
A broadly weaker U.S. dollar amid stalled U.S. debt ceiling negotiations triggered a rally for emerging-market currencies Tuesday, with some Latin American currencies hitting multi-year highs.

Emerging-market debt, meanwhile, saw little change on the day, weakening only slightly against U.S. Treasury’s. The risk premium, or spread, on the J.P. Morgan Emerging Market Bond Index Global widened just by two basis points to 302 basis points over Treasury’s. In price terms, its index rose 0.1%.

U.S. policymakers remain at an impasse in talks to reduce the deficit and in turn raise the debt ceiling limit before the Aug. 2 deadline. Both Moody's Investors Service and Standard & Poor's have placed the U.S. credit rating on review for a potential downgrade. Investors Tuesday fled out of the dollar, sending the euro up more than 1% against the U.S. currency and adding to emerging-market currencies' gains.

Commodities

US Gold Futures 1615
The small pattern sitting on 1610 over the last few sessions is corrective a small abc three swing pattern, therefor the price should push up from here. Remember is the top of subgroup1 (SG1) 1630 finds support then this action psychologically separates itself from 1600 and will become part of the 1650, which is a MediumLevel (65)
In terms of trading its mostly always the same, that is trade from the level 1600 in this case to 1230 exit, wait for support on top of SG1 (retests) then move back in through the micro group1 and trade 1650, in most case the next level is the Midpoint 5, which is the second strongest number after 1.
Silver has retested support on ML4/40.00

Oil WTI (Globex Futures) 9950
As you can see, there is no real change here for Oil, the price is still doing its best to get through the Major TradingLevel TL1 / 100 and will continue to follow stock, it was interesting to see OSH and WPL hold their structures in place for the positive side by not moving down and creating overlapping wave structures, cutting it close to the edge. One thing I did notice that is worth pointing out is that BHP in the US is paused to move higher, ready to move through 95 and take out 100, this is going to be good for the ASX Materials sector and the market in general, I feel our current long positions are set to ride this move, we will get a position in the ASX BHP and RIO

Base Metals

US Spot Prices (24HR in l/b)
US Copper:           Last: 4.51+
US Nickel:             Last: 10.91+
US Zinc:                Last: 1.12+
US Aluminium       Last: 1.17+

Copper (Globex Futures) 447
We didn’t have to go down to 430, this means the base metals are strong, the next step is observing the price create a pattern across 450, we can first look to the TradingLevels classic pattern, its quite simple and worth getting your head around, because understanding a few basic pattern certainly helps with entries and stops. The classic pattern, is the arrive’ at the price level, the reaction, sellers waiting at the price point you can always see them sitting in the market depth, the support, the value buyers moving their orders up from the last low, the first high above the level; the last bit of excitement. Then the correction.

Forex

US Dollar Futures (c) DXY 76.63
The trend is trading lower in line with the wave counts, the 7350 to 7330 would be the low of wave three, there is still a fourth and fifth to go. The low will probably be the US Senate resolving the current political debate around debt. But you would also have to think why would the republicans actually agree at all, especially by not agreeing places then closer to power, so don’t assume it will be resolved, let’s check the patterns closer to the date as there will have a strong fast trade either way, it is a place not to over trade and setting orders up to trap the price is sensible

EURUSD

TradingLevels: There is a few ways to apply the wave count, but the point is they all lead to higher levels, so use the levels to trade, the 145 is next, expect and abc or more complication correction before moving higher
Trade Strategy: Try and understand the wave count on the DXY and apply the opposite here, I will go over this in the video. But expect a wave four across 145, then a push up to 146, the annoying thing is the wave four can actually pull back the 144, it may not but we have to accommodate it, the other aspect is wave four can get ugly, a bit like at the last correction a 144 but technical the next one should be bigger?

AUDUSD 

TradingLevels: You know there will be selling pressure at MinorLevel 1 (mTL1) 1.10 this is also close to the old high. Expect the TradingLevels Classic pattern across mTL1 /1.10
Elliott Wave: The current high is a wave three, that’s is, start the count from 108, wave one is to 10872 zone wave two back near 10820 and wave three all the way up to the current high, so a wave four ready to unfold,
Trade Strategy: Traders with the longer term trade from 106 can start scaling out into 110 and after the abc correction at 110 move back, once the price is supported. Sub and Micro traders trade the levels. But expect corrective price action into the 10972 group2 zone
11:30am  AUD        CPI q/q    0.7% 1.6%  
11:30am  AUD        Trimmed Mean CPI q/q    0.7% 0.9%  

Indices

Dow Jones Futures CFD 12,500

TradingLevels:
Expect a move through 12500 perhaps to 12400/300 then a move back above 12500
 Elliott Wave: The next larger degree of 50 to 618% is 12300
Trade Strategy: Under 12500 is at least minimum short term bearish

S&P500 CFDs 1,330

TradingLevels:
As you can see on our charts the wave 2 pull back is still in play and on the cash SP can move to 1320
Trade Strategy: Wait until wave 2 low is in place and the first small set of five waves (impulse) has started to the upside, another way to view this would wait for a move down to 1320 roughly then a move back above 1320 as support, this test lower then finding support on 1330 is a sign of strength , if this occurs then you have something to work off

FTSE 100 Futures 5920

TradingLevels: Is developing support on 5900 if the price finds support on 5930 then you have the technical catalyst for being long otherwise it will simply drop through 5900
Elliott Wave: You are aware of the larger triangle, but I’m unsure if the last wave E is actually completed, there can be another move down under the last low 5700.. before the triangle is complete, or it can be complete now, so we just have to keep breaking the structure down, first the current move up is only in three waves, that is the move up from 5740, for being long we need to see five waves up, the current pattern sitting on 5900 is likely the wave four, this is why support on 5930 now, is important this is where we can find out what the larger pattern is. And sure the price can go down to 5880 and come back up and find support on 5930, so it’s a waiting game.
Trade Strategy: Wait for 5930 as support to take any long trades

SPI Futures 4450

TradingLevels: Support 4500 The 61.8% is 4472 to 4480 SG2
Elliott Wave: The current pattern down under the 4600 is an abc correction and the 4500 to 4472 is the support zone for the correction to complete
Trade Strategy: A move through SG1 to 4500 and possibly 4480 – 4472, trade sublevels, short trading ranges, scalp until the abc for wave two is completed
11:30am  AUD        CPI q/q    0.7% 1.6%  
11:30am  AUD        Trimmed Mean CPI q/q    0.7% 0.9%  

Summary

Expect the Dow, SP500  and SPI to move lower to complete their current corrections, the SP500 to 1320 the Down to 12300/400 and the SPI 4472/80 this is just a rough guess but these markets are completing their last leg of their corrective patterns, once completed we can expect moves to the upside. These markets may not move as low as this but we need to accommodate this range if they do., we did take a few insurance short trades yesterday to ease and hedge this situation today we will be mainly looking at longs, but I will  look for a short or two also.

The base metals are the support. It does appear US BHP is getting ready to break through the 95, if this is occurs it will be the trigger for the upside

Trading Quote
In the business world, the rear-view mirror is always clearer than the windshield.

Today's Financial Events
Time     Currency   Detail     Forecast    Previous
  
11:00am  NZD        NBNZ Business Confidence     46.5  
11:30am  AUD        CPI q/q    0.7% 1.6%  
11:30am  AUD        Trimmed Mean CPI q/q    0.7% 0.9%  
4:00pm  EUR        German Import Prices m/m    0.0% -0.6%  
All Day  EUR        German Prelim CPI m/m    0.3% 0.1%  
6:00pm  EUR        M3 Money Supply y/y    2.4% 2.4%  
6:00pm  EUR        Private Loans y/y    2.8% 2.7%  
7:30pm  CHF        KOF Economic Barometer    2.13 2.23  
8:00pm  GBP        CBI Industrial Order Expectations    -2 1  
10:30pm  USD        Core Durable Goods Orders m/m    0.5% 0.7%  
10:30pm  USD        Durable Goods Orders m/m    0.4% 2.1%  
12:30am  USD        Crude Oil Inventories     -3.7M  
3:30am  GBP        MPC Member Miles Speaks      
4:00am  USD        Beige Book

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 – 26 July

Dow Jones Index -0.74% 12,586
US Dollar Index -0.24% 74.06
US August Gold (Globex) 1611
WTI Oil (Globex)   99.23
Copper (Globex) 440
US BHP -0.29% 93.86
Base Metals: Mixed to soft
AUDUSD 1.0842
EURUSD 1.4371
SPI 4525
ASX200 4530

US News Wire
U.S. stocks fell Monday, as the deadlock in Washington's debt negotiations left investors uncertain whether the U.S. can avoid a default or a credit downgrade.

The Dow Jones Industrial Average dropped 62 points, or 0.5%, to 12619 in afternoon trading, paring a sizeable morning downdraft that saw the blue-chip index sink as much as 145 points in the first 15 minutes of trading. Debt-ceiling talks between Republicans and Democrats collapsed Friday and showed no progress over the weekend, spurring a flight to safety overnight and in early market action. Worried investors drove gold futures to a new record settlement Monday at $1,612 an ounce.

Commodities

US Gold Futures 1611
The first high above the level is unfolding, once completed a larger correction should unfold.
For the guess work we can use the sublevels SG1 – 1610 I 1620 I 1630, that is, SG1 is likely to contain the price, holding it to the 1600. If the price can find support on top of SG1 1630 then its free to move to 1650, finding support on SG1 is possible, however in trading the levels, the idea is to trade to 1630 and exit, then wait for support, if a good support falls into place then sure move back in and trade to 1650 (MediumLevel) and exit. But the flow is for the price to create a high here just above SG1 then move back to 1600

Oil WTI (Globex Futures) 9923
Interesting, to see stock drop while oil maintain its price, a small sign of strength.
The 100 price point is delivering a strong resistance and being under a level makes any long trade riskier. The OSH and WPL on the local did pull back nearly destroying their small current uptrends, they need to stop in their tracks and head up otherwise they will become short trades WPL 3872 and OSH 656 these price points are about the limit for the downside, If OSH locks under 650 the MediumLevel then it’s a short trade.

Base Metals

US Spot Prices (24HR in l/b)
US Copper:           Last: 4.38=
US Nickel:             Last: 10.76-
US Zinc:                Last: 1.10-
US Aluminium       Last: 1.16+

Copper (Globex Futures) 440
The small pattern over the last few sessions at 440 appears to be corrective, so expect a move down to 430.

Forex

US Dollar Futures (c) DXY 74.26
The sideways pattern over the last few sessions and across the SG1 of 74.00 is corrective and should see a move down through 74 to 7372 or lower. However the 74 obviously has support and will be a tough nut that will show up on the Euro as resistance.
The pattern at SG1 has the look of a wave four, complicated and sideways, the wave five down under 74.00 will be the low of a larger wave three.

EURUSD
TradingLevels: Like the wave four on the US Dollar, the Euro has a wave four at 144.
Trade Strategy: Go long as the price discovers support on 144.

AUDUSD 
TradingLevels: The 10872 SG2 is pegging in a top
Elliott Wave: Wave v of i) now an abc correction, a move under 10830 opens a larger price pattern
Trade Strategy: Short term traders will need to work the support once it’s in place 10850, or SG1 of 108

Indices

Dow Jones Futures CFD 12,600
TradingLevels:
The 12800 and 12772 have experienced the first reaction and the support has come in at 12500, so now we will see the retest of 12772, the 12650 is a more subtle point in play, but support on 12650 is a positive. We should also expect more swings in the 12500 – 12800 range. The move down on the Futures market early Monday morning our time created a gap, so the structure is hard to read, so we will have to wait for more price pattern to unfold. The Euro is firm to the upside so this should help and the FSTE as a guide for the European markets has been in a large triangle since the beginning of the year and is now completing, so we can see new highs over the month head. The only problem for the Dow is that its had lower volume since the 15^th of July to now, I will keep an eye on this to see if selling volume moves in.
Elliott Wave: From the 12800 top we are considering the move down and abc correction the 61.8% is roughly the 12500 so under this level is bearish and we need to be short
Trade Strategy: Under 12500 is bearish

S&P500 CFDs 1,340
TradingLevels: As long as the price stays above the 1320 the trend is positive, this is also the 50-62% retracement level and we can expect to see an abc correction
Trade Strategy: No trading strategy as yet until we can understand the actual correction unfolding, meaning it may be completed already or it may move to 1320 first before moving up, in line with the Euro. If in the next session it can establish support on 1340 then great work from there

FTSE 100 Futures 5840
TradingLevels: Give it time to develop support at 5900
Elliott Wave: I think the pattern at 5900 is a wave four, allow three swings, the second is completed. But the reality is that there are three waves up from the last low, so the current trend up can be corrective. On the daily chart the whole top since Jan appears to be a large Triangle ABCDE that is completed, so this last low can be the end of the Triangle
Trade Strategy: Wait and see if 5900 can become the support this can take another session, if so trade long if not stand aside for the time being

SPI Futures 4450
TradingLevels: Support 4500
Elliott Wave: The move down to 4500 is the 50% retracement level, the 61.8% is 4480 the SG2 zone. The move down from 4600 to 4500 is currently in three waves abc, however it can turn into five waves, with the rally bounce off 4500 as a wave four, this would mean a wave five down to 4472 SG2 area, the a abc bounce. Will chat about this in the video
Trade Strategy: The price can move down to 4500 and 4472 before seeing a abc bounce. If however once the market settles in and you see support build on top of SG1 4530 then trade long. just be careful not to lose money in SG1

Summary

We were expecting a reaction at 12800 for the Dow but not as quickly as it was, which affected many markets, mainly finance. However the current moves down are considered corrective but they are still unfolding and we do need to draw the line in the sand and that is 4500 on the ASX200.
Refining that a little further we can allow for a spike down through 4500 into SG2 4472 zone, but after that we would need the price to stabilise back above 4500 as support, if this does not happen and the price locks under the 4500 as resistance then we need to exit our long positions.
As mention, we understood that there would be a correction, but we can only accommodate so much of a retracement, the finance sector is the hardest hit and they would obviously be the first to go and the first to short.

The SP500 is holding up better than the Dow. The US Dollar is expected lower, meaning the Euro and Indices higher.
The base metals are steady, so there are more positives than negatives. It’s really just about give the current corrections down dome time to play out.

Trading Quote
“When emotions interfere with performance, you’ll often find evidence of inadequate training. Psychological assistance can aid the performance of a well-trained professional, but does not substitute for thorough training.”

Today's Financial Events
Time     Currency   Detail     Forecast    Previous
8:45am  NZD        Trade Balance    404M 605M  
9:50am  JPY        CSPI y/y    -0.9% -0.9%  
10:00am  AUD        CB Leading Index m/m     0.1%  
1:05pm  AUD        RBA Gov Stevens Speaks       
4:00pm  CHF        UBS Consumption Indicator     1.91  
4:00pm  EUR        GfK German Consumer Climate    5.6 5.7  
6:30pm  GBP        Prelim GDP q/q    0.2% 0.5%  
6:30pm  GBP        Index of Services 3m/3m    0.9% 0.9%  
11:00pm  USD        S&P/CS Composite-20 HPI y/y    -4.6% -4.0%  
12:00am  USD        CB Consumer Confidence    58.1 58.5  
12:00am  USD        New Home Sales    321K 319K  
12:00am  USD        Richmond Manufacturing Index    5 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 – 25 July

Dow Jones Index -0.34% 12,681
US Dollar Index +0.31% 74.24
US August Gold (Globex) 1590
WTI Oil (Globex)   99.23
Copper (Globex) 440
US BHP -0.71% 94.13
Base Metals: steady
AUDUSD 1.0840
EURUSD 1.4377
SPI 4567
ASX200 4602

US News Wire
The Dow Jones Industrial Average fell 43.25 points, or 0.34%, to 12681.16 and the Standard & Poor's 500-stock index edged up 1.22 points, or 0.09%, to 1345.02. The Nasdaq Composite Index added 24.40 points, or 0.86%, to 2858.83.

The Dow industrials' decline came as most major market indexes around the world finished with gains. Even so, the blue-chip index finished with a strong weekly advance after several days dominated by concerns over debt negotiations in Washington and Brussels. The Dow added 1.6% during the week, and is up 2.2% for July, falling just short of a multiyear high

Initial euphoria over Europe's solution to Greece's debt crisis wore off Friday, sending the euro lower against major currencies as markets questioned whether the fundamental outlook for troubled euro-zone countries had really changed.

On Thursday, European Union leaders reached a comprehensive solution to the Hellenic republic's distressed debt situation, amid fears that Greece's woes could spread to larger European economies such as Spain and Italy. In particular, analysts welcomed plans to expand the scope of the European Financial Stability Facility (EFSF), a funding vehicle that is a linchpin of Europe's efforts to rescue debt-laden countries.
Commodities

US Gold Futures 1588
The abc correction that we tracked unfolding quite neatly, all elements of the abc internal structure were simply and visible.
With the pattern now complete we should see it push higher as indeed it is doing.
We can expect a series of five wave structures upwards of different degrees, in the first small impulse wave is in place.
Trading, using the SG1 1610 I 1620 I 1630 to step up higher of the 1600, the norm is, if the top of SG1 1630 can develop support then the price can get to the Midpoint 1650, however this Midpoint is also the MediumLevel, simply meaning it carries more weight and should expect resistance, it’s 1650, 1720, 1772 and 1800 that are the price points the market will have the most difficulty at and can fail at any of these points.
Just to make things a little more complicated, even though the abc correction is complete, corrections in Elliott are the weakest point, meaning corrections can simply repeat themselves, duplicating, while waiting for other factors to move into place, so this is why the 1630 is a critical step in the process, understanding this allows you to manage risk better, adding and gathering all the little probabilities that produce a positive outcome.

Oil WTI (Globex Futures) 9974
Oil is really trying the get through the front line 100 (TL1) as long as it stays above the first MinorLevel mTL8 / 98.00 the battle is still in play, a retreat to 9650, still has the war in play and a move across this line 9650 will create moves up in stock like OSH abc rally patterns not impulse waves, abc rallies are in three swings up 5-3-5 if this is correct the abc is completed for OSH, what we would like to see is the three wave swing turn into five waves.
The other is WPL we were keeping our fingers crossed for this market to develop support on the MediumLevel ML4 40.00 a move back under 39 and we need to be short, with Oil following stock as a general though, the current high in the Dow 12772 and 12800 will see a reaction as it is, so this reaction dampens the Oil at 100 and the Oil Stocks on the local ASX so we need to be diligent while this unfolds.
One of the hopeful leaders is the Euro, our wave count for this to the upside, if this is correct the US markets will be in harmony with this and therefore the Oil. We will be keeping a close eye on the pull back that OSH and WPL have and what the Euro does in the days ahead, just letting you know where the risk sits technically.

Base Metals

US Spot Prices (24HR in l/b)
US Copper:           Last: 4.38+
US Nickel:             Last: 10.81+
US Zinc:                Last: 1.11+
US Aluminium       Last: 1.14+

Copper (Globex Futures) 440
Following on from Friday, the Copper story can move to 427/8, the line in the sand at the moment is the 440 the pattern sitting on this level is likely to be a wave four, meaning a wave five down into the 430 area.
The Shanghai markets have nearly completed a Motive wave (eight waves, Impulse + abc) That is five waves up from its last lows around the 2610 (2618) the impulse wave is completed and the abc is now in its Wave c once this is completed then this market will push up, the reason I’m mentioning this, is that the Shanghai Copper futures market is growing in size as you can image and has a influence on copper. We also use the Copper market as a guide stick for base metals, which in turn is the ASX Materials sector and so on, the other is the AUDUSD, apart from the AUD carry trade, it’s a commodity dollar.

Forex

US Dollar Futures (c) DXY 74.42
The bounce off 74 and SG1 of 74 is playing out. Its best if we simply observe the bounce rally structure, will it be three waves (abc correction) or five waves (impulse) an abc will see more downside and an Impulse will see more upside.
Currently the move up is three waves, but will it turn into five waves?
A move under 7430 will create the abc and then see further downside.
While the price is above 7430 we can see up side.
The wave count for the Euro is up, so we are expecting the Dollar down, but for trading evidence is what’s required. The Euro back above 144 would also be confirmation.

FX market was mostly consolidating in tight ranges during Asia, which are only corrective waves within larger pattern, which is clearly against the buck. We expect to see further weakness on dollar index, now towards 73.50 that will send other majors higher, such as Euro, Pound, Aud, and Cad. Regarding the Futures market, traders should pay attention to 1354 and then 1367 highs on S&P, where break should be extremely bullish signal for days if not weeks ahead

EURUSD
TradingLevels: The 144 is also a trend line resistance (see hourly chart)
If the price can get back up on 144 as support then find your way in long to 145. The current pattern under the 144 is of primary interest we need to see it as a three wave abc down as it is now and the Dollar is the reverse, if we see five waves down developing in the Euro then we will see either a larger ABC or a top in place.
Trade Strategy: No strategy until the first leg down is completed in either five or three waves, once this is done then we know what we have for the next degree higher in the structure unfolding across 144 level (Fibonacci number)

AUDUSD 
TradingLevels: The pattern in the range of 106 and 108 over the July period is the base for a push higher through 110
Elliott Wave: Looking at the 1 hour Elliott chart you can see the trend is in a wave three up
Trade Strategy: Same -Just hold long with your trading method
11:30am  AUD        PPI q/q    0.6% 1.2%
2:30pm  AUD        RBA Assist Gov Edey Speaks         

Indices

Dow Jones Futures CFD 12,670
TradingLevels: The 12800 is holding firmly as a current high, it has moved up higher in relationship to other indices such as the SP500, the Dow has created five waves from 12300 to 12800 these five waves are a wave five of the larger structure of five wave starting around the 11900 the top at 12800 does satisfy the fives wave up from 11900, so essentially it can be a top, but as mentioned the SP500 has not completed its structure. So the work early next week will be on the Dow’s current sell off that is its internal pattern, as we need to pick up on its golden threat so to speak, I will look into this over the weekend.   
Elliott Wave: Five waves up completed, and abc correction unfolding or a more serious top
Trade Strategy: Nil

S&P500 CFDs 1,344
TradingLevels: The Midpoint 1350 held as resistance and the support is the next level down 1330 top of subgroup1. The pattern currently being created under the 1350 is the focus, expect to see three swings abc then a push higher, it’s likely that the 1340 can hold as support, but depend on that, there is the trend line support that is more likely to hold as support around the 1333/5 area a touching here would be the Wave c of an abc correction
Trade Strategy: Long from 1350 as support or long from the competition of the abc correction, that is one more swing down to 1333/5 trendline support area.
The main trend is up in line with the Euro and the US Dollar down

FTSE 100 Futures 5840
TradingLevels: The 5900 is a balance line in the bigger picture back from Jan 2011 so any support here now is very helpful to any upside storey, as long as the price stay above the 5850/30 area there is hope for the upside, a move back under 5800 in the bigger picture creates a bearish outlook.
Elliott Wave: The short term view is looking at the current structure up from the 18^th July, currently its in three waves (abc corrective) will it turn into five waves? (impulse) five waves would establish the 6100 top taken out and the move to 6500 MediumLevel ML65.
This current move up is very much like the SP500 so keep an eye on the Euro, DXY and SP
Trade Strategy: Just allow the market time to allow the price to settle into 5900 a smaller abc correction, its either that or a top is in place…

SPI Futures 4450
TradingLevels: The SPI and the ASX200 are dealing with 4600 and this simply takes time to goes through the process of profit taking, support and accumulation
Elliott Wave: ABC correction across 4600 then up. The Shanghai market is leading in this structure.
Trade Strategy: The short term is overbought, that is the current trend up from 4450 on the Cash market. The SG2 4565 I 4572 I 4580 is the holding zone and the scalpers need to be on the right side of. Expect a swing down again to the 4565 the 50% retracement is at the Midpoint 4550, so this can be the ABC Wave C low before a push up to 4600 again.
11:30am  AUD        PPI q/q    0.6% 1.2%  

Summary

The Dow is leading the US indices and the European Indices, the Dow’s top at 12800 may turn out to be significant, I say this simply by looking at its own self-contained structure.
However, If I look around at other markets such as the US Dollar moving down, this would allow for more room for the Dow to move higher, in line with the Euro.
The other leading indicator is the AUDUSD, its structure has scope to take out the 110, this would create a double top for the AUDUSD and double tops are never the end of a bull run (Gann)
The Shanghai market is another leader in its own way, this market in terms of pattern is leading the ASX slightly it has had five waves up from its lows (as the ASX200 is doing) and after five waves comes the ABC correction then up again, the Shanghai is completing the Wave C of the ABC correction another small push down early in the week then up, our ASX 200 will have its ABC across 4600 then push up, this would be in line with the AUD, so the AUD, Shanghai and the ASX200 are paused to move higher.

So the Dow is and will have a correction at the 12800 as it is, but the underlying global markets have patterns that suggest higher ground. The US earning season is also a driver for its trend and this should continue to be the catalyst we are looking for, there is of course the US senate compromising on its own debt strategies that can create the optimism that will assist markets.

Our current long ASX trades will pull back as the ASX200 flickers around the 4600 is its abc correction partly being created from the Dow at 12800 (mTL8) a profit taking number and the third strongest number. I am hoping the Shanghai markets Wednesday run up will support the ASX 200 in a general sense, the ASX200 should find support at 4550

Trading Quote
“If the markets have a reality all their own, then the reason so many people fail is because they refuse to find out what that substance truly is and adapt to it. Market reality must be something so completely unpalatable or unacceptable to most people that they would rather fail at trading then embrace it. Of course, that is exactly the case. The true reality of trading and the markets as a whole is something that most people would rather die than accept.”

Today's Financial Events
Time     Currency   Detail     Forecast    Previous
11:30am  AUD        PPI q/q    0.6% 1.2%  
12:30pm  JPY        BOJ Gov Shirakawa Speaks      
2:30pm  AUD        RBA Assist Gov Edey Speaks      
6:30pm  GBP        BBA Mortgage Approvals    31.3K 30.5K  
11:00pm  EUR        Belgium NBB Business Climate    -2.2 -1.1

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!