Technical Analysis Report

10 August 2011

Commodities

US Gold Futures 1750
The number 72  that is 1720 and 1772 are working well, for some strange reason when you get the extra 7 or 2 like 772 or 272 its much stronger than just having single number. I one the numbers play a part in chart geometry and are part of the 9 series of number, but apart from that I don’t know, but I do know as a trader they should always be used, being on the right side of then in your trade set ups is the starting point and trading to them is the other, in taking profits.
The other point here is the number 8 as 1800 (MinorLevel), I just see it as the profit taking number and the 1800 hasn’t come in to action yet but it will, the point of mentioning it, is another smaller sublevel 8 before the 1800 and that is the 1780 sublevel as part of subgroup2 (SG2). I know I’m rambling on here a little, but understanding these numbers, will improve your own trading, they give you something very real to work with.

Any way SG2 1772 is the natural selling price before the 18000 and this is unfolding with a sell off correction looking for support and the first leg down to 1720 is in five smaller waves so at minimum expect and abc a 5-3-5 structure

Oil WTI (Globex Futures) 78.40
The rally up from the low around the 76.50 to 83 is in three waves, so it’s a corrective rally, sure it can get more complicated of stay simple as an Elliott abc, but the point is that it is corrective a correction and once completed will continue down. The next step is waiting for the Major TradingLevel TL8 / 80.00 to become resistance in a series of failed retests, once you can recognise that it is resistance then you can short or add to shorts. The next degree of price levels lower is the MinorLevel 78 so this also can be used to add to positions and is the normal way of shorting, when working with a level, that is use the next lower degree of level as the trigger.
Oil will follow stock, so be aware of the Dow when it touches TL1 / 10,000 as we are looking for the low of Wave 3 in most indices, with a rally up in to wave 4 and then down into wave 5

Base Metals

US Spot Prices (24HR in l/b)
US Copper:           Last: 3.96-
US Nickel:             Last: 9.63-
US Zinc:                Last: 0.94+
US Aluminium       Last: 1.07+

Copper (Globex Futures) 391
Will go through a process of pattern making that will trap it under the MediumLevel 4 /40 as resistance, yes it may spike to 410 even 420 but in the long run will find the ML4 as the resistance, this will keep the ASX Materials sector pegged and the MediumLevel 11500 will become the centre of attention over the short term ahead.

Forex

US Dollar Futures CFD:  DXY 74.50
We should stay with the general premise that the 75 is the line in the sand for the larger direction. The Feds will have their fingers close to the printing press, which doesn’t help in reading the natural flow of the markets, so keep position sizing smaller.
Support, as long as the price stays above the 74 the general support is in place and with the SP500 finishing its rally from yesterday should now see more downside which in turn should se the Dollar push higher. So narrowing the 75 and 74 range into its sublevels, the Midpoint is the centre as support or resistance 74.50 then there is SG1 and SG2, if the SG2 especially the pivot in SG2  74.72 can become support then you have a good chance of the 75 testing as support, if that is the case then scale in through SG1 of 75 (10, 20, 30) you know if  the top of SG1 75.30 finds support then it can leave 75. But also understand where the Euro is and the SP500
I have mentioned the long side approach you also need to consider the downside path, as you need to eliminate the guess direction game and trade the support and resistance, getting from one price point to the next is the name of the game.

EURUSD 1.4275
TradingLevels: 144 -140 Range. The 142 has built some support, however the support is the first bounce so more pattern development is required to confirm, so once Japan has opened see how and where the price is sitting, what sublevels, Midpoint first 14250 then SG1 or SG2. If the SG2 14272 can find support then you can look at the long side with the 143 as support in mind. If the Dow is going to rally then the 11500 is the price point so line this up with the Euro, if the Dow moves under 10500 then it’s down to 10,000
Trade Strategy: A move under 142 is the downside trade.

AUDUSD 1.02
TradingLevels: It’s only natural to see a bounce off the Major TradingLevel TL1 / 1.00 and would see another trend up to 104 very roughly
Elliott Wave: The Wave 3 low at TL1 /1.00, the Wave 4 rally is under way and around 104 would be the 38.2% of wave 3 retracement and or the 4^th wave of one lesser degree. An abc corrective rally, the a and b seem completed already. So a wave c up and should be in five waves and approx. the same size as wave a
Trade Strategy: Wave 4 rally, use the sublevels to try and trade to each full point 102 to 103
Expect a small abc at 102, once completed use SG1 to scale in.
Tentative  CNY        Trade Balance    27.3B 22.3B  

Indices

Dow Jones CFD 11,067
TradingLevels: 38.2% retracement is around 11500 the MediumLevel and 1200 on the SP500 as wave 4 once completed the bear market will resume.
Elliott Wave: Consider Wave 3 low in place and the Wave 4 rally is underway
Trade Strategy: Wave 4 should be in three waves abc the Wave a and b are complete so the Wave c should have five small waves taking it to 11500

S&P500 CFDs 1,126
TradingLevels: The low on the cash was 1076 that is 4 points away from our target 1072 but within the SG2 zone
The Minor Wave 3 is complete and the Wave 4 rally is under way, however the rally is already over half way completed the target is the 1200 but the SG2 1172  zone will also offer resistance
Trade Strategy: Looking to short the top of the abc rally into 1200

FTSE 100 CFDs 5250
TradingLevels: The bounce back was normal and we now need to work with Minor Group1 5100, 5200 and 5300, the target is 38.2% of wave 3 that is 5400, so the top of MG1 5300 is the important price point as support or resistance, this is going to be tricky, any way the short term expect a retest of 5200 checking for support before moving higher.
Elliott Wave: Wave 3 completed and Wave 4 under way.  The 38.2% retracement is around 5400
Trade Strategy: yes use the MinorLevels but trade the sublevels because we are in a corrective rally.

SPI Futures CFDs 4100
TradingLevels: The 61.8% of the 2009 pegged in a low around the 3800.
Elliott Wave: The low is considered the Wave 3 low and we are in the Wave 4 rally.
Trade Strategy: The Dow’s wave 4 rally can take it back to the 11500 MediumLevel and SP500 to 1200, the ASX200 38.2% rally is 4100, but because of the Dow’s 11500 price point then the 4200 is the probable first target. In terms of trading being above 4000 is positive and use the MinorLevel then the sublevels to trade. But remember the Dow Jones is in a rally to 11500 and once complete the trend down will continue, this is just the bounce off the 10,000 TL1 even though the price only reached 10500
Tentative  CNY        Trade Balance    27.3B 22.3B  

Summary

The Minor Wave 3 low is in place for the Dow and the Wave 4 corrective rally is underway, the 4^th wave of one lesser degree is the target and that is 11500, but can be lower. Once this wave 4 is completed then the bear market will continue back down into 10,000 for the Dow.

Our ASX200 had an early bounce along with Asia; our bounce was off the 3800 target the 61.8% retracement of the 2009 move. We are also considering the bounce here a Wave 3 low in place, even though it will or may past the 38.2% retracement level 4100 wave four’s normally have, we are staying with the main trend down but expect a move higher to 4200 plus. In terms of trading while the market is above 4000 is has a positive bias, that said we also need to consider that the main trend is down and not to get lost in buying, thinking you’re missing out on something. Sure trade long, but know where you are and what you’re doing, what price points you are working off and what price points you will exit at when reached.

For a positive market the Dow would require solid support on 11500 and the SP500 support on 1200.

Trading Quote
"If rule governance and conscientiousness in following rules is associated with market success, then traders want to use emotions to trigger greater attentiveness to plans and rules. This means creating associative cues between emotional arousal and the behaviours responsible for trading success." Brett N. Steenbarger


Today's Financial Events
Time     Currency   Detail     Forecast    Previous
  
9:50am  JPY        Core Machinery Orders m/m    1.9% 3.0%  
11:00am  AUD        MI Inflation Expectations     3.4%  
11:30am  AUD        Employment Change    10.3K 23.4K  
11:30am  AUD        Unemployment Rate    4.9% 4.9%  
10th-16th  CNY        Foreign Direct Investment ytd/y     18.4%  
4:00pm  EUR        German WPI m/m    -0.3% -0.6%  
6:00pm  EUR        ECB Monthly Bulletin      
7:00pm  GBP        CB Leading Index m/m     0.6%  
10:30pm  CAD        Trade Balance    -0.9B -0.8B  
10:30pm  CAD        NHPI m/m    0.5% 0.4%  
10:30pm  USD        Trade Balance    -47.5B -50.2B  
10:30pm  USD        Unemployment Claims    402K 400K  
12:30am  USD        Natural Gas Storage     44B

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!

Technical Analysis Report

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.