TRADING REPORT

EarlyBird Report – 12 July

Dow Jones Index -1.20% 12,505
US Dollar Index +1.28% 75.98
US August Gold (Globex) 1553
WTI Oil (Globex)   95
Copper (Globex) 435
US BHP -2.72% 93.23
Base Metals: Softer
AUDUSD 1.0755
EURUSD 1.4260
SPI 4500
ASX200 4582

Traders, we would like to inform you that content (Charts) published on FOREX GOLD SP500 OIL will not be updated from Friday July 1st to the July 15th 2011.

US News Wire
Stocks were routed Monday as investors worried that Europe's debt crisis is spiraling out of control, threatening to engulf larger nations like Italy and Spain and create a wider crisis for global markets

Commodities

US Gold Futures 1552
Expect a corrective pattern at 1550, after three swings we can understand if the pattern is corrective abc if so then it will push higher. It is an old high so it will struggle here and can fail here. It is move opposite to stock, however the headwind in the US Dollar as it also pushes up, having these two move together is not the norm, one will give…The 1330 correction is the volume support for stops, but suggest locking in some at 1550 until we can see what the pattern is at 1550

Oil WTI (Globex Futures) 95
Five waves down from the last high to 95, we should see a small abc across or up off 95 then another five waves down, following stock.

Base Metals

US Spot Prices (24HR in l/b)
US Copper:           Last: 4.31-
US Nickel:             Last: 10.42-
US Zinc:                Last: 1.03-
US Aluminium       Last: 1.10-

Copper (Globex Futures) 435
The move down is likely a wave (iv) and the retracement target is 38.2% around 430 the top of subgroup1 (SG1) if it does extend further then 425 is acceptable but under 420 then there is something wrong and a larger bearish pattern would be unfolding.  This current correction down is in line with the Shanghai and the ASX  etc once this wave (iv) is completed we are looking for a push higher. The catalyst for failure here is a strong US Dollar or rather a weaker Euro, the markets will come to a cross roads shortly as US stocks and US Dollar battle it out for the larger direction    

Forex

US Dollar Futures (c) DXY 75.40
On the actual Index the 7650 is the important level as support or resistance, even though there is the Pennant pattern on the daily chart, which is also a series of waves ones and twos in Elliott terms and is breaking to the upside, the sublevel 7650 (65) is an important mile stone in the trend up. So the Euro is the mirror opposite and we have been chatting about it breaking lower within our trend channel through the 140 which it has done and still has lower to go, the daily or weekly Robo was also mentioned a week ago as a good tool for the longer term traders

EURUSD

TradingLevels: The speed of the wave structure down is wave three personality.
Once the price is firmly under 140 we can look at 138 and 13772 for the lows of the wave three. But please understand the size of this trend, the 130 is also in reach
Trade Strategy: Daily and weekly Robo. The price locking under 140 from any retest is the best bet other wise 139. But the trade is short from under 144 with the weekly Robo as the guide stick and use the daily to add and subtract contracts

AUDUSD 

TradingLevels: While the 108 (mTL8) and 10722 are in place the bias is bearish
Elliott Wave: The 61.8% retracement is down around the 10550
Trade Strategy: If you are short from the 10750 then look to the 4 hr, Daily and Weekly Robo and a glass of red so you don’t get emotional

Indices

Dow Jones Futures CFD 12,500

TradingLevels:
The target down was the 38.2% which is 12400 but I mentioned a move down to 12500 as it was the first level and we are there now, It appears it can go lower.
The 12500 is a line in the sand and there does appear to be five waves down to 12500, meaning there should now be three waves up, an abc 5-3-5 correction, but we should strongly consider the 38.2% at 12400. It will be about the 12500 as support or resistance, so work this level
 Elliott Wave: Looking for five waves down to 12400  or 12500 then and abc rally then another five wave down
Trade Strategy: just observe the 12500 as S/R and work any trade from this price point

S&P500 CFDs 1,320

TradingLevels:
The Dow at 12500 is the same as 1320 for the SP500 roughly the 38.2% retracement level.
The move down can also be seen as an abc correction, three swings down, either way we should see short term support at 1320
Trade Strategy:

FTSE 100 Futures 5900

TradingLevels: Like the Dow and SP500 the move down to 5900 is in three waves so it can be a ABC correction but it can also develop into five waves? We just have to wait and see.
Elliott Wave: If it is going to be five waves down then the wave four rally up off 5900 would be 38.2% 5950 But we can also expect a wave one up if the whole last move down was an ABC correction , its just too early to say
Trade Strategy:

SPI Futures 4500

TradingLevels: Expect the cash XJO to drag the SPI under 4500
Elliott Wave: The 61.8% retracement level down is very close to the 4500, it would only be natural to see a bounce off here, however the opening of the cash market would drive the price lower.
Trade Strategy: The low at 4500 the 618% retracement level, has seen three waves down to that point, the opening of the cash can see it lower and also the other Asian markets can take it lower, keep an eye on the Dow Futures during the day and look for support in BHP

Summary

The Strong US dollar or more so the weak Euro is playing a strong part in this correction, the Euro is expected to move lower, and it’s the norm for the Euro and SP500 to move together, so be aware of this.
The wave count down in all indices overnight is the same, they are currently three waves down which can be called and Elliott ABC correction, many of them have reached there Fibo retracement level and other are close. The point is that as an ABC correction they have their lows in place, but the three waves can easily turn into five waves (impulse) if we get five waves it opens either a larger corrective pattern or a larger five waves down. We knew we would be going through this juncture and there’s not a lot we can do about it, except trade less and build small trades into the direction is case the direction expands.
We have done a good job explaining this correction before it occurred and have scaled out of long positions to lighten the exposure and even placed a few shorts. However this next step is important, we simply need to know if we are going to get 3 waves down or 5 waves down and we won’t know until tomorrow or even the following day, so understand any trades placed today would be at risk of being stopped out the following day, so taking part profits is always a good thing.

So 3 waves means up side and 5 waves means more down side….

Trading Quote
"If you don't get what you want, it's a sign either that you did not seriously want it, or that you tried to bargain over the price." --Rudyard Kipling

“A doctor goes to medical school for four years before practicing medicine; a lawyer goes to law school for three years before beginning the practice of law; why then does a sufficient amount of money with which to trade qualify an unschooled individual to be a trader?”  W.D. Gann

Traders, we would like to inform you that content (Charts) published on FOREX GOLD SP500 OIL will not be updated from Friday July 1st till July 15th 2011. The EarlyBird will do its best to cover these until the 15^th July.

Today's Financial Events
Time     Currency   Detail     Forecast    Previous
  
12th-13th  NZD        REINZ HPI m/m     -1.8%  
9:01am  GBP        BRC Retail Sales Monitor y/y     -2.1%  
9:01am  GBP        RICS House Price Balance    -24% -28%  
9:50am  JPY        Tertiary Industry Activity m/m    0.8% 2.6%  
9:50am  JPY        CGPI y/y    2.4% 2.2%  
11:30am  AUD        NAB Business Confidence     6  
12th-16th  CNY        Foreign Direct Investment ytd/y     23.4%  
Tentative  JPY        Monetary Policy Statement      
Tentative  JPY        Overnight Call Rate    <0.10% <0.10%  
3:30pm  EUR        French CPI m/m    0.1% 0.1%  
4:00pm  EUR        German Final CPI m/m    0.1% 0.1%  
Tentative  JPY        BOJ Press Conference      
5:30pm  GBP        MPC Member Bean Speaks      
All Day  EUR        ECOFIN Meetings      
6:30pm  GBP        CPI y/y    4.5% 4.5%  
6:30pm  GBP        DCLG HPI y/y    -0.2% -0.3%  
6:30pm  GBP        RPI y/y    5.2% 5.2%  
6:30pm  GBP        Trade Balance    -7.3B -7.4B  
6:30pm  GBP        Core CPI y/y    3.4% 3.3%  
7:00pm  GBP        CB Leading Index m/m     0.4%
10:30pm  CAD        Trade Balance    -0.8B -0.9B  
10:30pm  USD        Trade Balance    -44.1B -43.7B  
12:00am  USD        IBD/TIPP Economic Optimism    45.7 44.6  
4:00am  USD        FOMC Meeting Minutes

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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