Technical Analysis

News
Stocks slid, sending the Standard & Poor’s 500 Index lower for a third day, Treasuries rose and the euro weakened as Greece tangled with European officials over terms of a second rescue package. Italy’s bonds slid and costs to insure Portugal’s debt rose to a record.

Commodities

US Gold CFD: 1732
Technical Analysis:
TradingLevels: Subgroup1 (SG1) 1710|1720|1730 if the price finds support on top of SG1 1730 then expect the price at 1750, if the 1720 (pivot) becomes resistance expect the price back at 1700
Elliott Wave: The bullish count, a pullback to 1700 then up. The bearish count, a top in place

Silver: Same as gold, with the bullish and bearish count, this is also the same for US Indices, we expected a selloff we can’t confirm if the selloff is a change in trend or a correction

Oil WTI: 99.10
Technical Analysis:
TradingLevels: Long with a break above 101 and short under 98.
Elliott Wave: The pattern we have been tracking is still working its self into a corner and will make a break this week either way. The last move down from 101 to the current low can be an abc correction, so any move up of this low try and work out if it’s impulsive (five waves) but the long trade is safest above 100 and the short trade is the 98 as the retested resistance. the wave count should now line up with US Indices

Base Metals

US Spot Prices (in l/b)
US Copper:           Last: 3.82-
US Nickel:             Last: 9.63-
US Zinc:                Last: 0.95-
US Aluminium       Last: 1.00+

Copper CFD: 380
Technical Analysis:
The trend up is seeing its first and expected weakness under 400 (ML4) it can come back to 372 as a wave four and wave fours can get complicated, so we should expect more than three swings, we are only seeing the first down now.

Forex

Question of the week: Will Eur and Gbp be a good sell this week, or Cad and Aud a good buy?
Hard to say right now, but it’s interesting how the price action unfolded through recent weeks and days. Both, cable and Euro could be topping out soon, as first impulsive wave (A) of II is looking for a low on dollar index. Well, on the other-hand Aussie and Cad are showing only three waves of retrace from recent extremes, so this pull-back could easily be part of a larger trend (lower USD).

US Dollar: 79.30
Technical Analysis:
As you know we have been tracking the Wave A (of an ABC correction) down, this Wave A has five smaller waves and the current bounce off 79 may be the end of the Wave A down, if this is the case then 80 will be retested. The bounce off 79.00 would be at minimum a small abc rally in three waves. Finding support on top of SG1 7930 is the key for any upside to SG2 7972|7980.
The Euro is doing the opposite and in line with SP500


EURUSD 1.3127
TradingLevels: A larger corrective patter is emerging across 130
Elliott Wave: The Wave A up is looking completed and the Wave B down is underway
Trading Strategies: Expect a bounce of 131 as it retests 132. Support on 13130 (Group1) would create short term longs to the Midpoint 13150 where the supply is, so exit, if the Midpoint becomes support then go long off that to SG2 13172.

AUDUSD 1.0580
TradingLevels: The price is working with 106. IF support is found back above 106 then you can think long and scale in above the 106 through the SG1 (10610|10620|10630) if the price can develop support on top of SG1 the 10630 then the price can lift higher
Elliott Wave: The pattern coming down across 106 can be the ABC corrective pattern but if this is the case it must now trade above 106. The Flip side is it takes out the last low around the 10530 then the price will get trapped into 105 creating a much bigger corrective pattern
Trading Strategies: Long above 106 with targets above the 107 in five waves up.

Indices

Dow Jones CFD 12,576
Technical Analysis
TradingLevels: While the price is above 12,500 the market is supported, when a price reacts from 12,800 then 12,500 is the first support, its simply working with the Fibonacci ratio 1,2,3,5,8 so we can say if the second strongest number 5 cannot support the price then its back to 3 and if its back to 3 then it’s a part of Group1 and a part of the closest largest number and that is 12,000 but as far as the levels are concerned that would be the MediumLevel 11,500 (ML15) so the 12500 is stopping the price dropping to 11,500
Elliott Wave: The move down appears in nature to be impulsive, with its sharp move and thus creating the top.
But also technically it can still be a corrective move too and ABC pullback. That is why I mentioned the support at 12500 last time, the 12500 as resistance certainly puts a dent into the trend up.
Trading Strategies:  Day Trading - Long if 12,600 finds support.

S&P500 CFD: 1307
TradingLevels: Larger pattern unfolding into 1300
 Elliott Wave: We have to follow two wave counts, one is a top is in place and the market will roll over down and the other is a larger corrective pattern across 1300 (and below) in three waves ABC and then move up making new highs
Trading Strategies: Its normal to see buyers sitting on 1300 and creating a bounce that will hit supply/sellers in the 1310 – 1320 range with the sellers probably wining and seeing the price back and below 1300, the 1290 is the 38.2% retracement level so expect the price to bounce around between the 1290 and the 1300, the price also test lower to 1280 the first level of SG2

FTSE 100 CFD: 5670
TradingLevels: 5650 (65) support resistance 5700 then 5720 supply
Elliott Wave: The FSTE has displayed the most weakness in the move down, as its move the furthest, passing the wave four of one lesser degree at 5700. So there is more evidence here for a top being in place and therefore we should follow a more bearish count, the impulse wave . but technically counting the structure down it can be and abc, with the current low in at 5650, we just have to wait and see for more development, but this is a good reflection of the Euro talks on debt.
Trading Strategies: Expect a retest of 5700 from 5650. IF the 5700 cannot find support then look for a short there, if support is found then scale in long

DAX CFD: 6462
Technical Analysis: Same, Give the price a few sessions at 6500 MediumLevel, lets simply see if this level develops support or as resistance. The real support is still at 6400, so above this the Dax is positive below negative


SPI CFD 4264
Technical Analysis
TradingLevels: 4300 is the top of MinorGroup1, the resistance. The price has reached 4300 the other day and its normal for it to react, the reaction has found support at the first volume demand level at 4230 SG1 and will now retest supply starting at SG2 4265|4272|4280 it’s the 4272 as support of resistance that a trader can work from
Elliott Wave: Can take the price to 4500, that’s if the US Indices are only correcting a small correction and the Dow stays above 12500 and the Shanghai builds above the 2300 (group1) support. And of course the price needs to find support on the 4300 to create a long trade to 4500 where it is then expected to roll over down
Day Trading: Use 4272 or the Midpoint 4250 as support or resistance, be on the right side of these sublevels. Basically you have to work SG2 4265|4272|4280 with 4272 being the important pivot as support or resistance, being long with 4272 as support is much safer than being long under it.

Summary

US Indices The moves are governed by the European mess.
I don’t know if the current moves down are just bullish corrective or the start of the bear market for the US and Euro zone. The patterns are still too small to offer evidence. The 12500 on the Dow is the short term support floor. The SP500 will see at least a corrective pattern, but the question is will the price end up having the 1300 as support or resistance, this can take all week to develop, its simply a guessing game as I can see both counts bullish and bearish, but cannot give a clear answer, so we simply should wait until we are sure and then trade that direction.

Europe It appears the officials are debating the bond debt yields, this would be expected negations as the ECB would only want to give closer to 3 where the buyers would want closer to 4, the outcome of this discussion should see a bounce, but as you know the Greece problem is only 2.5% of the Euro output, but a blue print for Portugal, Spain, Italy..
The pattern across the MediumLevel 6500 for the Dax is unfolding and as long as it stays above the support 6400 then the Dax is positive. Their neighbours the Britt’s, don’t seem as confident as the FSTE traded sharply lower than other markets presenting a more bearish impulse wave. 

China The Shanghai, 2300 as support is all we need to know about, the more this can develop as support the more positive Asia in general is.
Australia The Shanghai support 2300 is critical and the 4300 as support for the ASX200 is the next positive step to watch for, IF this is found then the 4500 is the target. The base metals that have been part of the driver has met supply just under 400 and is having its correction, I think its just a correction and that the price will push higher, this can be seen in the US BHP at 80 (TL8) so Australia can expect corrective consolidations before another push higher. I did place out short trades in the ASX Robo to hedge this corrective situation

Trading Quote
Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed. Benjamin Graham

Today's Financial Events
Time     Currency   Detail     Forecast    Previous

Tuesday, January 31, 2012

8:45am  NZD        Building Consents m/m     -6.4%  
10:15am  JPY        Manufacturing PMI     50.2  
10:30am  JPY        Household Spending y/y    -0.1% -3.2%  
10:30am  JPY        Unemployment Rate    4.5% 4.5%  
10:50am  JPY        Prelim Industrial Production m/m    2.6% -2.7%  
11:01am  GBP        GfK Consumer Confidence    -31 -33  
11:30am  AUD        NAB Business Confidence     2  
11:30am  AUD        Private Sector Credit m/m    0.4% 0.3%  
|4:00pm  JPY        Housing Starts y/y    -1.4% -0.3%  
6:00pm  CHF        UBS Consumption Indicator     0.81  
6:00pm  EUR        German Retail Sales m/m    0.9% -1.0%  
6:45pm  EUR        French Consumer Spending m/m    0.3% -0.1%  
7:55pm  EUR        German Unemployment Change    -8K -22K  
8:00pm  EUR        Italian Monthly Unemployment Rate    8.6% 8.6%  
8:30pm  GBP        Net Lending to Individuals m/m    1.2B 1.0B  
8:30pm  GBP        M4 Money Supply m/m    0.3% -0.6%  
8:30pm  GBP        Mortgage Approvals    53K 53K  
9:00pm  EUR        Unemployment Rate    10.4% 10.3%  
12:30am  CAD        GDP m/m    0.2% 0.0%  
12:30am  CAD        RMPI m/m    0.2% 3.8%  
12:30am  CAD        IPPI m/m    0.1% 0.2%  
12:30am  USD        Employment Cost Index q/q    0.4% 0.3%  
1:00am  USD        S&P/CS Composite-20 HPI y/y    -3.2% -3.4%  
1:45am  USD        Chicago PMI    63.2 62.5  
2:00am  USD        CB Consumer Confidence    68.4 64.5

Australian Corporate Calendar

Panoramic Resources Limited (PAN.AU)  December Quarterly Report
Cudeco Limited (CDU.AU)   Quarterly Activities Report
Bathurst Resources Limited  (BTU.AU)   Quarterly Activities Report
Dart Energy Limited (DEGEF) Quarterly Activities Report
Rex Minerals Limited   (RXM.AU)   Quarterly Activities Report
Integra Mining Limited   (IGR.AU)   Quarterly Activities Report
Ramelius Resources Limited     December Quarterly Activities Report

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

Good Morning & Good Luck!

Technical Analysis

Technical Analysis ASX200 XJO
Date: 12 March 2012
Chart: Daily Chart
A Move below the 61.8% retracement levels shifts the weight of the market to the bearish side.
The 4200 (mTL2) is the balance line for the larger correction, so the 4200 as support or resistance
over the week ahead will make the market bearish or bullish.

Technical Analysis - The Day Ahead

Dow Jones 13,212 +0.50%
Base Metals Steady
US Gold CFD: 1668
Silver: 32.20
Oil WTI: 102.90
US Copper CFD: 382
US Dollar: 79.08
AUDUSD 1.0342
Dow Jones CFD 13,211
S&P500 CFD: 1408
FTSE 100 CFD: 5771
DAX CFD: 6953
SPI CFD 4356

News
Sunday, China ; A Purchasing Managers’ Index (CPMINDX) rose to a one-year high of 53.1 in March, China’s logistics federation and the National Bureau of Statistics said yesterday. The gauge has a pattern of rising each March. In contrast, a PMI from HSBC Holdings Plc and Market Economics showed manufacturing contracting and export orders falling.

US Commodities

US Gold CFD: 1668
TradingLevels: The main support is the MediumLevel 1650 a move under this and the bias is bearish.
Elliott Wave: As you know in the bigger picture there is a positive and bearish count that we are tracking, on our gold charts it shows only the positive bullish count, but in this section we cover both counts, which bring me to the point of these counts working themselves into a corner in with lower highs and higher lows on the intraday chart, we can use the last low under the 1650 (ML65) and the low under the 1700.
The current move up off the 1650 will run in supply at 1672 and 1680.
If you have gone long off the 1650 (which creates the positive bias)then you would be working the degrees of the sublevels with the aim of getting to SG2 (1665|1672|1680) with the 1672 pivot as the most important price point.
The sentiment, you can ask is, are precious metals working in or out of harmony with US Indices on an hourly basis and what about the US Dollar?

Silver: 32.20
TradingLevels: Entering SG1 103|102|101 once the price is locked under 102 the pivot within the group then the price is a part of the 100 (TL1) story the Major TradingLevel.
When a price is entering any Group1 it bounces of the top of group1 in this case 103, retesting supply or a psychological or technical price point then slowing works lower under the pressure of the sellers into Group1, this whole process into Group1 creates choppy price action simply because the groups of larger orders will migrate to the common numbers 1,2 and 3 and we don’t normally trade through this in a down trend, an uptrend we do. If you are trading this then allow the price room to move, with the view of covering at 100 or adding below 100 as resistance
Elliott Wave: Retesting support at 32.00 which is also the 61.8% retracement level of the last move up from 31.65 SG2 support to the high of 32.42, if this retest of 32.00 is corrective (abc -5-3-5 ) then it should find support and move up. If however it moves low and finds the 31.72 as the retested resistance then short trades have the bias.

Oil WTI: 102.90
TradingLevels: There goes the 105 Midpoint support to create the bearish market.
Expect a move to 100 and a bounce and then through 100, but it’s the retest of 100 as resistance that creates a larger move down and as you know this market is headline driven at the moment
Elliott Wave: Impulsing negative structure

Base Metals

US Spot Prices (in l/b)
US Copper:           Last: 3.83+
US Nickel:             Last: 7.76-
US Zinc:                Last: 0.90+
US Aluminium       Last: 0.94+

US Copper CFD: 382
You can easily see this market working further into the triangle pattern with lower highs and higher lows.
The move down appears faster and the moves up slower…

The Shanghai market is impulsing down in a wave three, but will now consolidate in a smaller wave four before heading lower…. (China is on holiday this week)

Forex

US Dollar: 79.08
As you know we are searching for the low in the Dollar, there is trend line support running back from the Oct last year, the current low around 79 is also the 61.8% retracement of the last move up around from 78.00 to 8070, but the reality is that we cannot call the low in without the evidence with the internal market structure i.e. impulse wave up, so the fact is this market is still in a down trend and the Euro and pound in an uptrend.
If the current low is take out roughly 78.80 then the trend down in the dollar will continue and the Euro will make new highs above 1.34

EURUSD 1.3340
TradingLevels:  Expect new highs above 134 if the 13350 Midpoint becomes support
Elliott Wave: The wave structure is point up
Trading Strategies: Support on the Midpoint 13350 creates the long trade

AUDUSD 1.0342
TradingLevels: If the SP500 maintains support above 1400 then this will assist the AUD staying above 103. But when using the tradinglevels, it’s very normal in a down trend for the price to bounce off the top of group1 SG1 103 then test supply in this case 104 fail and then continue the trend down into group1 SG1 103|102|101 and if 102 becomes the resistance then the price is part of the 1.00 TL1 story
Elliott Wave: Wave (2) low at 103?
Trading Strategies: If SG2 10380|10372|10365 develops as support, especially the 72 then go long. Once the market opens you would work the Midpoint 10350 as support or resistance (retests) then go long or short

Indices

Dow Jones CFD 13,211
TradingLevels:  The 13,200 is the pivot in Group1 of 13,000 (Minor Group1 MG1. 13,100, 13200, 13,300) If the price find support on 13,200 then a positive bias is created and of course a move above the last high 13,265 is the confirmation.
While the Dow is above 13,000 the bias is positive, as it’s the closest largest number. The US Dollar being below 80 confirms the Dow also being positive.
Elliott Wave: The bearish count for the top is still in play, however we would need to see a drop under the last low, under 13,000.
Trading Strategies: The bounce of 13,000 to the 618% at 13200 is here and now, a move above 13,265 would create a bullish picture with a new high. So any trade long or short would simply use 13,200 as support or resistance, refining this for longs use SG1 as support 13,230 and short 13,172 SG2 as resistance.
The structure of the bounce off 13,000 to 13,200 does appear a five wave structure, i.e. impulse wave and therefor can be followed with and abc corrective pattern, which technically can retrace 61.8% of the move up, that is back to 13,100, but 13,150 is the first natural support

S&P500 CFD: 1408
TradingLevels: The pattern at this high has different possible wave counts, an ending diagonal triangle the our Elliott Wave 4 hour chart suggests or the current rally up off 1400 as and abc rally then further downside, the truth is, it’s unclear there are still too many possibilities, even from a TradingLevels perspective its not clear yet, yes the price is weaving sideways across 1400 but its just still too early to call 1400 in as support or resistance. We can see the main trend up becoming weaker, so we know there is a top coming it’s just picking it is the tricky thing, we need to see a clear five wave structure down and impulse wave, we do have a small set of five waves down from the current high, but now we need to see a move under the last lost 1390 to confirm those five waves
Elliott Wave: The bounce rally appears to be in five waves not a corrective three wave, we have to wait to confirm
Trading Strategies: Being above 1400 creates a positive bias and support on 1410 would create a move to 1420.

FTSE 100 CFD: 5771
TradingLevels: Expect the 5800 (mTL8) to be retested, but on a subtle note the SG2 4765|5772|5780 is also the resistance but the important number here is the 5772
Elliott Wave: The move down from the 6000 high on the 14^th to the current lows can be counted in three main waves, therefor can be corrective ABC, a move back above 5950 can only really confirm this. There is a bearish side to this, firstly if the price stays under 5800 if the price develops support on 5800 then the second resistance is SG2 5865|5872|5880 the 5872 is the important price as support or resistance, SG2 is also the 61.8 -72% retracement levels of the last move down, if its going to fail and roll over it is from here that it will happen
Trading Strategies: Above 5772 positive and add above 5800 and SG1 and short with 5772 as the retested resistance adding under 5765 and working the Midpoint

DAX CFD: 6953
TradingLevels: 7000 is the line in the sand for being long and for being short 6900 as retested resistance
Day Trading: The move down from 7200 to the current low is in three swings an ABC corrective pattern, if the 6900 is the low of this ABC as Wave Four then wait for 7000 to prove as a robust support for long, but while it’s under the 7000 it’s on the negative side and under 6900 would see a move to 6800 then bounce

SPI CFD 4356
TradingLevels: The retested support on 4300 creates the positive bias. Also SG1 is also support so expect further upside.
Day Trading: Hold long above 4317 (4320) now that the price has support on SG1.
The Midpoint 4350 is next followed by SG2 4365|4372|4380 and then 4400 target for day traders

Summary

Australian market is positive being above 4300 (mTL3), however there was strong selling volume on Friday, so to negate that supply we need to see new highs above last Fridays highs.
The Chinese manufacturing on Sunday above 53 is positive. The Shanghai and Shenzhen are in wave three’s down, this positive news will create wave four, this is a continuation pattern to the downside, however China is on Holidays this week, so the wave three down should not affect the materials sectors, copper staying above 375 is the key point for us.

European markets have been moving down, they now have three waves down, which is technically corrective (Elliott ABC) these three wave can turn into five waves down (Impulse) So we need to be mindful of both of these wave counts

The US markets in basic terms are working sideways across their closeted largest numbers and we are playing the guessing game of working out if tops are in place or are we looking at bullish corrective patterns, we cannot confirm either of these just yet, so trade what you see, of use the TradingLevels as support or resistance which have been noted for each Index

Currencies, the bottom line, while the US Dollar Index is below 80 the bias is negative, meaning the Euro and Pound can make new highs.

Trading Quote

I concentrate on possibilities rather than probabilities.

Today's Financial Events

Time       Currency   Detail     Forecast    Previous

Sunday
12:00pm  CNY        Manufacturing PMI    50.9 51.0  
1:30pm  CNY        HSBC Final Manufacturing PMI     48.1  

Monday
Apr 2  10:30am  AUD        AIG Manufacturing Index     51.3  
10:50am  JPY        Tankan Manufacturing Index    0 -4  
10:50am  JPY        Tankan Non-Manufacturing Index    5 4  
All Day  CNY        Bank Holiday      
11:30am  AUD        MI Inflation Gauge m/m     0.1%  
12:30pm  AUD        Building Approvals m/m    0.6% 0.9%  
5:30pm  AUD        Commodity Prices y/y     3.5%  
2nd-7th  GBP        Halifax HPI m/m    -0.3% -0.5%  
6:15pm  CHF        Retail Sales y/y    3.2% 4.4%  
6:30pm  CHF        SVME PMI    49.5 49.0  
7:00pm  EUR        Final Manufacturing PMI    47.7 47.7  
7:00pm  EUR        Italian Monthly Unemployment Rate    9.2% 9.2%  
7:00pm  EUR        Italian Quarterly Unemployment Rate    8.6% 8.1%   
7:30pm  GBP        Manufacturing PMI    50.5 51.2  
7:30pm  GBP        Housing Equity Withdrawal q/q    -7.4B -8.6B  
8:00pm  EUR        Unemployment Rate    10.7% 10.7%  
1:00am  USD        ISM Manufacturing PMI    53.3 52.4  
1:00am  USD        Construction Spending m/m    0.8% -0.1%  
1:00am  USD        ISM Manufacturing Prices    62.4 61.5  
3:30am  CAD        BOC Gov Carney Speaks      
3:35am  USD        FOMC Member Pianalto Speaks

Asian Corporate Calendar
ASX dividends & Reporting: Click HERE»

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

Good Morning & Good Luck!

Tip: Monday is always a good day to look for Weekly Robo trades as it can create the new high or low, but make sure the volume is correct and that the price is above the closest largest level not under and the opposite for being short.