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In-depth Analysis DJI SP500 FSTE SPI ASX200 Gold Copper Oil Forex AUDUSD EURUSD Dollar & CFD Trades FREE TRIAL

EarlyBird – Technical Analysis CFD Trading Report – The Day Ahead

Dow Jones – 11, 800 +2.31%
Base Metals Positive
US Gold CFD: 1650
Oil WTI CFD: 91.63
Copper CFD: 345
US Dollar CFD: 76.20
EURUSD 1.3947
AUDUSD 1.0480
Dow Jones CFD 11,900
S&P500 CFD: 1,252
FTSE 100 CFD: 5550
SPI CFD 4275

US News
NEW YORK -(Dow Jones)- U.S. stocks jumped Monday, pushing the Nasdaq Composite into positive territory for the year and the Standard & Poor's 500-stock index to the cusp of it, though stocks moved off session highs in late trade.

The Dow Jones Industrial Average advanced 78 points, or 0.7%, to 11889 in late-afternoon action. Caterpillar was leading blue chips, gaining 4.8% after the maker of construction and mining equipment reported third-quarter earnings that beat expectations and raised its outlook for the year.

The Standard & Poor's 500-stock index added 12 points, or 1%, to 1251, led by materials, financial and technology stocks. The index was 0.55% below break-even for 2011 as of late afternoon. The Nasdaq Composite gained 55 points, or 2.1%, to 2693.

Investors reacted to a set of merger announcements and were heartened by the lack of new negatives from Europe, whose sovereign-debt crisis has wracked investors for months.

CFD Commodities

US Gold CFD: 1650
The trend up, will either create a corrective pattern now on the 1650 or will go to the SG2 1672 first then come back to the 1650 for a corrective pattern. You should expect the price to at least have a small correction at 1650 (abc) at 1650 before pushing to SG2.
Remember that the 1660 is the 61.8% retracement level and then the old supply is through SG2 1665 I 1672 I 1680, and silver is meeting supply now to at 32, but while base metals are expanding upwards the precious metals will continue higher, obviously this is great for BHP etc and we can see the US BHP has further upside from looking at the wave count

Oil WTI CFD: 91.63
Look at Oil create the Tradinglevels Classic pattern across 90 (MediumLevel ML9)
The current move above 90 is the ‘First High’ above the level, it will push up in five smaller waves starting at 84.20 and will reach 93+ once the five waves are completed then a retest of 90 as an abc correction. If support on ML9 is found then we move to the next level 100 (TL1) and consider this a retest of 100 which would be in line with the US BHP wave count, any way as always one support level at a time

Base Metals

US Spot Prices (in l/b)
US Copper:           Last: 3.45+
US Nickel:             Last: 9.07+
US Zinc:                Last: 0.84+
US Aluminium       Last: 0.98+

Copper CFD: 345
There is strong resistance at these current highs 345, 348, 350. Expect the price to slow down into these numbers, this will also slow down other related markets Nickel, AUD, BHP…

Forex

US Dollar CFD: 76.20
We should be seeing support now for the Dollar at 76 and resistance for the Euro 140.
As there are five waves down from the last high 77.77 to current lows this is the same for the Euro to the upside, this slowing down in support and resistance doesn’t mean the end  as there can be another wave to come, this is the same for Indices and we will go over this in the EarlyBird video The other point is that the Euro is moving up on lower volume over the last two sessions, this helps confirm the 140 as resistance

EURUSD 1.3947
TradingLevels: 13930 is the top of SG1 if it maintains support then it will continue to testing the Midpoint 13950, if support is found on the Midpoint trade long to SG2 with the 13972 as the profit taking, if this 72 finds support trade up again. If the 13930 (13927) fails to hold then look short, but getting through SG1 levels is normally bouncy.
Elliott Wave: Count five waves up from the 13655 low to the current high, which can go to 140, in this five waves we are in the last 5^th wave which starts from the around the 13820, which can be completed at 13950 this would only be confirmed if the price broke down through 13920 – 139. The reality is that 13930 has support
Trading Strategy: Trading the Sublevels as a possible retest of 139 is possible .

AUDUSD 1.0480
TradingLevels: The test of the 1.05 is under way and expect a reaction and a corrective pattern here, not a trend.. Expect the normal TradingLevels pattern, Reaction, Support, First High, ABC correction at 1.05, the number 5 is the second strongest number psychologically.  
Elliott Wave: There are two ways to count the impulse wave up, one version is covered on the Elliott Charts in the AUDUSD section and the other here in the EarlyBird, but for the short term it doesn’t matter as the price will be working the 1.50 level
Trading Strategy: Working trades around a whole number like 1.05 we need to also work with the smaller levels both sides of the 1.05 the SG1 above and the SG2 below

Indices

Dow Jones CFD 11,900
TradingLevels: 12,000 Resistance
Elliott Wave: The 61.8% retracement level from May 12,876 to the current low Oct 10,404 is roughly 11,930, so we can accept 12,000 as a top, however if the 12,000 has the normal corrective pattern (abc) then finds supports, then we can expect a much bigger move in the Dow. We can and will also be looking at other markets like the Dow Transports, its 61.8% and closet largest number is 5000, both the 5000 and the 12000 are also supply levels (sellers) and this would be true for other markets and Indices, so we have to expect the market to slow down into these numbers, if they find support then fine, if not they will become the resistances and we are short again
Trading Strategy:  Expecting the Indices to slow down into these large numbers, we can expect this in the Currencies and Metals.

S&P500 CFD: 1,252
TradingLevels: Allow time for the normal corrective pattern to unfold at the Midpoint 1250, if after three swings, abc pattern the price finds support then trade to 1272 and exit. If the 1250 fails to develop support then a top is in place. The squaring of the corrective pattern at 1200 can get the price to 1280  
Wave count: counting five wave up from 1200 last low, the current intraday high is either wave three or five, if its three then expect and abc at the Midpoint 1250 then another smaller five waves up to 1272 SG2, if the price move down below 1227 then a top is in place, but of course from a trading point of view that’s too late so work the 1250 and understand the levels above and below the 1250 as 1253 and 1248 being group1 and 2
Trading Strategy: wait and work the sublevels

FTSE 100 CFD: 5550
TradingLevels: There is plenty of resistance at this high 5555
Elliott Wave: Five waves up completed from the 5350 to the current high
The 5600 is the 61.8% retracement level
Trading Strategy: Look for weakness from this high, the 5530 I 5520 I 5510 SG1 will create support from a bouncy price action, but if true weakness is going to come in from this high then look for Impulse waves down (five wave structures on the intraday chart) Otherwise wait for the 5550 to become support before trading higher

SPI CFD 4275
TradingLevels: Expect weakness to start here 4272 Lock in 75% profits
Elliott Wave: Impulse wave up, counting the five waves up from the last low  4115 that should complete into 4300 – 4330+
Trading Strategy: There is resistance ahead from 4272 - 4333

Summary

The DJI SP500 FSTE are at or close to their 61.8% retracement levels from the May highs, these levels are also supply (sellers) levels, there are also wave counts that also complete in these areas, we have to expect resistance. Yes ASX stocks will run up while the Indices are at highs, but understand there is resistance ahead and profits on longs need protection.

If Indices, after a corrective pattern find support on their respective levels Dow 12,000 ASX 200 4300 we will go long.

Base metals, precious metals and currencies are also at their resistance levels, so all markets will work together, the AUD at 1.04 the Euro at 140, Copper 350 Gold 1650 and so on.

Weekly Cycle; Tuesday morning is profit taking with the trend resuming afternoon

Trading Quote
Your imagination is as good and as deep as your pockets

Today's Financial Events
Time     Currency   Detail     Forecast    Previous
  
8:45am  NZD        CPI q/q    0.8% 1.0%  
9:00am  EUR        ECB President Trichet Speaks      
10:00am  AUD        CB Leading Index m/m     -0.1%  
10:00am  AUD        RBA Deputy Gov Battellino Speaks      
5:00pm  CHF        UBS Consumption Indicator     0.79  
5:00pm  EUR        GfK German Consumer Climate    5.1 5.2  
7:00pm  EUR        Italian Retail Sales m/m    0.1% -0.1%  
7:30pm  GBP        Current Account    -9.9B -9.4B  
7:30pm  GBP        BBA Mortgage Approvals    36.3K 35.2K  
7:45pm  GBP        BOE Gov King Speaks      
11:30pm  CAD        Core Retail Sales m/m    0.4% 0.0%  
11:30pm  CAD        Retail Sales m/m    0.5% -0.6%  
12:00am  CAD        BOC Rate Statement      
12:00am  CAD        Overnight Rate    1.00% 1.00%  
12:00am  EUR        Belgium NBB Business Climate     -9.4  
12:00am  USD        S&P/CS Composite-20 HPI y/y    -3.6% -4.1%  
1:00am  USD        CB Consumer Confidence    46.2 45.4  
1:00am  USD        OFHEO HPI m/m    0.1% 0.8%  
1:00am  USD        Richmond Manufacturing Index    2 -6  
3:30am  GBP        MPC Member Bean Speaks 

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

Good Morning & Good Luck!

CFD Trading Report S&P500
Elliott Wave US dollar is lower across the board after a gap on Sunday against all FX major currencies. The S&P Futures also gaped higher for around 20 points from 1153 Friday close on news that IMF is preparing a EUR 600bln loan for Italy in case the country’s debt crisis worsens. We however warned on you already on Friday about potentially US dollar weakness when the S&P500 (cash market) moved into a wave three support zone. On the updated S&P Futures chart we can see that wave (iv) is now in process, which means that downside remains in play for this market, while prices trade below 1217 on a “daily close basis”. So once the S&P Futures will find a resistance in wave (iv) and will move lower into a wave (v), US dollar will continue higher! However, be patient for, cause thats still not the case!

Trading Strategies

S&P500 CFD: 1215
TradingLevels: The Pivot 1220 within SG1 of 1200 has some small resistance which helps makes the price part of 1200 story and there the 1172 SG2 zone
 Elliott Wave: As you know we cannot confirm intermediate wave (3) down yet. We can’t also rule out the markets making one more new high and the Elliott Wave count on our site reflects this bullish possibility and it may be a week before we can have evidence in the structure. The short term trend is down so being short is the correct trade.
Trading Strategies: Stops at 1233 wait for 1200 to be the retested resistance before adding to shorts.