Day Trading Education in Technical Anlysis GOLD

US Gold CFD: 1577
Following on from the Elliott wave count from the last post, the Wave (iv) retest to 1600 is underway, yes it can pop up in SG1 of 1600 but should fade and fall lower into Wave (v) down at 1500 the MediumLevel (ML15) where it will have a larger bounce, once this bounce is over the price should work lower down through 1500. It is worth point out the significance of this 1500, it is the 50% between 1000 and 2000 and this means if the price finds 1500 as resistance then the balance is towards 1000 (TL1) and not 2000 (TL2) if this is the case then we can start working with the levels below 1500 and they are MinorLevel 1,300, 1,200, 1,100 which are Minor Group1. The normal flow down from one MajorLevel such as 2000 to 1000 is quite simple, lets just start with 1500 the Medium level, the price would move down to this level and bounce (abc correction) this high is the first high, then the price would bounce off 1500 again creating the second high and so on until the price moved through 1500 and then retested it as resistance and supply levels would be lowering, eventually the weight of the market would be trapped under 1500 and then the same thing would happen at 1300 the top of Minor Group 1. Another point worth noting, is that the price travels quite fast down from 8 to 5 and 5 to 3 they are the best numbers to short between

Day Trading Education in Technical Anlysis GOLD

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CFD Commodities

US Gold CFD: 1598
Following on from the trading education in the  Elliott wave count from the last post, the Wave (iv) retest to 1600 is underway, yes it can pop up in SG1 of 1600 but should fade and fall lower into Wave (v) down at 1500 the MediumLevel (ML15) where it will have a larger bounce, once this bounce is over the price should work lower down through 1500. It is worth point out the significance of this 1500, technical analysis is the 50% between 1000 and 2000 and this means if the price finds 1500 as resistance then the balance is towards 1000 (TL1) and not 2000 (TL2) if this is the case then we can start working with the levels below 1500 and they are MinorLevel 1,300, 1,200, 1,100 which are Minor Group1. The normal flow down from one MajorLevel such as 2000 to 1000 is quite simple, let’s just start with 1500 the Medium level, the price would move down to this level and bounce (abc correction) this high is the first high, then the price would bounce off 1500 again creating the second high and so on until the price moved through 1500 and then retested it as resistance and supply levels would be lowering, eventually the weight of the market would be trapped under 1500 and then the same thing would happen at 1300 the top of Minor Group 1. Another point worth noting, is that the price travels quite fast down from 8 to 5 and 5 to 3 they are the best numbers to short between

Sliver The bounce off the first MinorLevel under 30.00 TL3 is 28.00 mTL3 and this is the normal level for the retest of supply i.e. 30.00 TL3 and this is the price to add to short positions, when the price moves through 28.00 also add to shorts and if it retests 28.00 short again, so split the trade up and work it around the 28.00, the much the same as you may have done above TL3. Under 28.00 is 27.72, 27.20 then 26.50 and the MediumLevel 25.00 ML25 you can cover at 25 or when Gold is at 15.00 because the wave count would be expecting a larger rally about there, but we will look at the ending of this structure into these levels and the expected rally later in the week

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Sliver The retest from 28.00 up close to 30.00 can just be the Wave a of an abc correction or that this retest can be completed,Elliott wave four corrections can be complicated sideways patterns. From a trading point of view, there is the safe way and the more proactive way and that would be layering in short positions close to 30.00 and then adding as 29.00 becomes the resistance then 28.00, however you would need to be clear on the management, either keeping the stops above 30.00 (31.37) or work much closer to the corrective pattern, there is no correct way, only your way and the risk you accept.

Technical Analysis CFD Indices Trading Dow Jones

Dow Jones CFD 11880
Technical Analysis
TradingLevels: The trend is down until proven otherwise, yes there is support on 11,800/11,772 SG2 for the Dow and 1,200 for the SP500 and 4000 for the ASX and the Dollar will stick to 80, so it is a juncture to be careful of a reversal to the upside as we have a wave count to match, as you can see on our SP500 charts.
However there is the case for a large move down from here as I have been talking about in the EarlyBird section and the US Treasuries support this downside in fact they are leading the way down the yields are very weak (when Stocks are Down Yields are Down and Dollar is Up and vice versa) or you can use the TLT; When stocks are up, yields are up, TLT is down and dollar is down; and vice-versa! iShares Barclays 20+ Year Treasury Bond Fund (the Fund) seeks investment results that correspond generally to the price and yield performance of the Barclays Capital U.S. 20+ Year Treasury Bond Index (the Index). The Index measures the performance of public obligations of the United States Treasury that have a remaining maturity of 20 or more years.
Elliott Wave: The bearish count requires 11,800 as the resistance after it finishes bouncing, the SP500 needs 1,200 as resistance, this will take time
Trading Strategies:  Long above 11,772 and short below, wait for these price point to be tested before committing

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Summary

Nice intraday impulse wave up across markets,, the move was off the 1,200 61.8% retracement level of the SP500 the catalyst news was the US house stats. The impulse wave up in most cases in just over two thirds complete.
The unanswered question is still the medium term view or the Minor Wave within the Elliott structure about the market being bullish or bearish.
The Bullish structure would count like this; the impulse wave last night that is not completed yet would make wave (i) of a larger five wave structure up, which would take the Dow above 12,500…
The Bearish structure would keep the current December highs in place.

Oil WTI: 102
Technical Analysis:
TradingLevels: Oil is still trapped in Group1 {101|102|103} above 100 TL1 as support so its positive, but in the next two degrees lower its negative under 103, if it can develop support on 102 the SG1 pivot then that is a plus but at the end of the day its finding support on top of SG1 103 that is the key for a long trade. Oil can move with stock, so the Dow also finding support on12,500 (mTL5) is also important for trading long, not essential but helpful, you can also look to the base metals and as we use copper the 350 as a solid support.
All of this helps with being long on equities with the Robo trading strategies.
Earlier in the week we were looking at Shanghai as it has moved down a lot more than other markets and could see it was oversold and the Elliott wave count was looking for a low and that low may be in now, it certainly has made a sign but would need confirmation in the structure, but while that current low is in place so is support for Asia and commodities.
Elliott Wave: expect further strength on crude towards and above 103.70. Well, in the two sessions prices made a pull-back for almost 61.8%. And so far pull-back appears corrective which fits very nicely into the bullish incomplete structure.

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Forex US Dollar: 81.70
Technical Analysis:
TradingLevels: the ABC correction is completed and the move up is well underway, if you got from 81.00 SG1 to 82.00 well done.
Expect the normal tradinglevels Classic pattern to unfold across 81.00. That is, the reaction at 81, then searching for support SG2 or the Midpoint, then a push above 81.00, creating the first high above this level. Then a larger ABC Zigzag 5-3-5 correction across 81.00, then a move to 82.00 SG1
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The Day Ahead – Technical Analysis Report 2 Feb

Dow Jones 12,756 +1.00%
Base Metals Positive
US Gold CFD: 1746
Oil WTI: 98.41
Copper CFD: 383
US Dollar: 78.90
EURUSD 1.3080
AUDUSD 1.0708
Dow Jones CFD 12,760
S&P500 CFD: 1327
FTSE 100 CFD: 5792
DAX CFD: 6623
SPI CFD 4286

News
U.S. stocks advanced as solid manufacturing reports around the world bolstered investor confidence.
 
Technical Analysis

US Gold CFD: 1746
Technical Analysis:
TradingLevels: The Midpoint 1750 is the resistance, but now appears will become support in due course, followed by  Subgroup1 (SG1) 1710|1720|1730 with the 1772 as the main resistance and of course the (mTL8) 1800 as the target to take profits, then wait for the correction at this MinorLevel then get back in to trade higher
Elliott Wave: The internal wave structure up in creeping but it’s in tact as an impulse wave, it should therefor climb higher, gaining support above 1750 and moving to 1772.
Australian Gold stocks should also continue higher, I was a little concerned with NCM but that should now extend higher. The other stock that we talked about was the large triangle pattern on TRY above the MediumLevel 4.00 which is plodding along nicely as a trend trade with 5.00 as the first target

Silver: and copper have much the same wave pattern. The 34.00 (Fibonacci number) is the resistance that you need as support

Oil WTI: 98.41
Technical Analysis:
TradingLevels: Same - Long with a break above 101 and short under 98.
Elliott Wave: Oil did not follow stock up and is still firmly locked under the 100 and the 99.00 has also developed the first failed retest which is what we were looking for yesterday, the next step if this market is heading lower is the 98.00 / 97.72 as the resistance to add to shorts

Base Metals

US Spot Prices (in l/b)
US Copper:           Last: 3.84+
US Nickel:             Last: 9.49+
US Zinc:                Last: 0.96+
US Aluminium       Last: 1.00+

Copper CFD: 383
Technical Analysis:
Generally speaking, as long as copper stays above the 372 we have a bullish corrective Elliott wave four and we shouldn’t expect  too much upside here for a while, this was mentioned when the price first arrived at SG2 this is all normal when markets are working around these price levels and we can see this in other markets like US BHP at 80 which is a MajorLevel, at least while they are vibrating at their levels they are stabilising other markets in general, once they have completed their corrective pattern they will push higher, but the bottom line is to know the price levels to exit, either for a profit or a loss and that’s 365 on the downside and 4.00 on the upside

Forex

All major European shares trade higher today, up more than 1%, in-line with the S&P futures which are showing some sharp gains now back above yesterday’s 1313 high. US dollar is very weak, down almost against all majors, only unchanged against Gbp at the moment but weakest against the Aud; down 0.4%.

US Dollar: 78.90
Technical Analysis:
Dollar making new lows, but the Euro and Indices haven’t just yet so there is a lagging resistance, the dollar has good historical resistance points every 50 points, 79, 78.50 and 78 are good support and resistance price to work from. The SP500 is showing an impulse wave pattern up from 1300, it does need to make a new high above the old high1333 to confirm the impulse wave and if it does which is another three points as today’s high so far is 1330, then by looking at the impulse structure we can look above 1350 to 1372+  and of course this would take the Euro with the SP and the dollar would be lower into the 78 zone, but first things first and the 78,50 is the next level of support once the price retests 79 and develops 79 as the resistance


EURUSD 1.3080
TradingLevels: The 132 is an old high so we are seeing profit taking, plus the trend up from 130 to 132 requires rebalancing, the main support is the 13150 but as always just allow the reaction correction from 132 to unfold out until it gets to a point you can recognise and work with, I find it easier not to get involved in the first swing in a correction, but to observe it and work out what it is, such as three waves or five waves, this narrows down the possibilities of the next larger pattern. If the 13150 cannot hold then the 13130/20 are the next supports
Elliott Wave: The pattern will also be in line with the SP500 and if the DP can make a new high above 1333 then its bullish and so will be the Euro and then you can look for support on the 132 to trade long or if you can work out the corrective pattern under the 132 then you will be able to enter lower
Trading Strategies: The probability is up, the question is the size or the corrective pattern under 132, the supports are 13150 then 13120 either one of these is likely, I just sure, so its best to allow the corrective pattern to unfold to a recognisable pattern and a supporting retested price level to work off, as mentioned watch the SP500 and support on 132 is the safest trade. The other point worth noting is that the AUD made new highs and this market is a great leader of other markets these days 

AUDUSD 1.0708
TradingLevels: The price will now work with 107 and when working with large number we also take into consideration the smaller numbers on both sides of the larger number and in this case you will find the group1 above 10710|10720|10730 doing their first job in restraining the price to 107 and the first line of defence the supports group2 below 10680|10672|10665. We should see the price create a corrective pattern across the 107 but with group1 and 2 helping out in holding the pattern. After the corrective then look to trade long
Elliott Wave: The impulse wave up continues to trend in line with base metals and a safe haven
Trading Strategies: Wait for the corrective pattern to unfold in three swings across 107 above and below, then look for support on 107 and 10730 of course you can enter anywhere in the corrective process but you need to know what your looking at, if you don’t know then don’t enter and wait for the largest number to become support via retesting that price then making a new high.
11:30am  AUD        Building Approvals m/m    2.3% 8.4%  
11:30am  AUD        Trade Balance    1.23B 1.38B  

Indices

Patterns are positive to the upside and move is expected, the Dax and AUD are leaders in these patterns by making new highs, the Dow and ASX haven’t made new highs but should in time.

Dow Jones CFD 12,760
Technical Analysis
TradingLevels: Resistance one is 12,800, second is SG2 12,765|12,772|12,780 with 12,772 being the pivot a trade would need as support for longs in that zone.
Elliott Wave: The pattern appears positive to the upside as a few other markets have made new highs, but technically as it stand the move up from the 12,530 is in three waves i.e. corrective abc rally only when it makes a new high above the 12,840 can we then expect a follow through towards 13,000 (TL13)
Trading Strategies:  Day Trading, as you can see the SG2 12,772 zone is holding the price, the support is back at 12,720, the 12,750 is also a support but it doesn’t have the volume support only the psychological support. Any way the price is going to correct to some degree from the 12,772, so just allow it to and when it finds support the look to move in long again. Also the 12,800 is likely to be part of a larger corrective pattern, but the price should stay above the 12,700 if not then this would break the impulse pattern that’s trending up

S&P500 CFD: 1327
TradingLevels: Expect a corrective pattern across the top of SG1 1330 the TradingLevel Classic pattern across this level is highly likely, once this is completed and the 1330 is support trade long to the Midpoint 1350 exit, wait for the corrective pattern and retender, shorter term traders would work the 1340 taking profits into the 1338 (Microlevels)
 Elliott Wave: Impulse wave up is underway
Trading Strategies: wait for the Classic Tradinglevels pattern to unfold at 1330 which is essentially the abc Elliott pattern, once 1330 is support scale in long using Micro Group1 1331|1332|1333 if the 1333 the top of group1 finds support then you know your free to go.

FTSE 100 CFD: 5792
TradingLevels: Resistance (mTL8) 5800 Support SG2 5780|5772|5765 this hasn’t been retest as support yet but its likely during the corrective process of the price working through the MinorLevel 5800
Elliott Wave: The Dax was and is the catalyst for the move up above the 6500 (ML65) the Dax making a new highs helps with the wave count for the FSTE and we assume that the FSTE will make a new high here based on the Dax’s new high, that said the move yup in the FSTE is in three wave i.e. corrective abc and therefore it can fail from here like the Dow/ SP500, this is probably not the case but I have to mentioned it. We can expect a corrective pattern at the 5800 with the SG2 as the support
Trading Strategies: The 5800 will cause swings, you have to be careful. The 38.2% retracement level is around the 5750

DAX CFD: 6623
Technical Analysis: expect a corrective pattern across the 6600 the resistance above the current high would be 6650 and the support below the 6600 is 6572 SG2 after a correction higher price are expected in line with the impulse wave up
 

SPI CFD 4286
Technical Analysis
TradingLevels: Like the US Indices no new highs here, however the pattern under 4300 is corrective and a break higher should occur, yes the cash market will lift the price higher, but remember the weekly cycle Thursday can gap higher and then fizzle out and trade lower, so be very careful of getting trapped buying the open
Elliott Wave:  New highs above 4300 over the next three days
Day Trading: A Move above 4300 then a corrective pattern back down into 4300, Friday and Monday should see the higher prices, so you need to survive any pullback today
11:30am  AUD        Building Approvals m/m    2.3% 8.4%  
11:30am  AUD        Trade Balance    1.23B 1.38B  

Summary

US Indices We are seeing an impulse wave up in all indices, the Dow and SP etc. haven’t made new highs but should based off the Dax and AUD  as leading indicators, new highs for the DJ/SP may not occur tonight in the US session but on Friday and Monday, the have employment figures in the next session, the ADP Non-Farm Employment last night were slightly positive so this is the lead for employment figures tonight and the Non-Farm Employment figures on Friday keeping the Job rate at 8.5 i.e. steady. The Dow should eventually find the 12,800 as support and push to 13,000.

Europe The Dax has been the catalyst and leader in moving higher, we can expect US and European markets to rebalance tonight a little before moving higher on Friday and Monday

China Edges higher, the shanghai 2300 top of Minor Group1 is what we are looking at for maintaining the trend higher.
Australia The move down yesterday in the ASX200 will see a rebound today, the element to look for in the move up is the volume and compare that amount of volume to the move down yesterday. The levels it is the same story we need the 4300 as support for the run to 4500 target.

The Weekly bullish cycle for Thursday, is seeing the market open higher, then trade lower during the day on lower volume and then seeing the buying volume move back in possibly on Thursday but more so on the Friday morning and looking for the strong Friday close and the follow through on the Monday

Trading Quote
The ability to change one’s mind is probably a key characteristic of successful traders. Dogmatic and rigid personalities rarely succeed in markets. The markets are a dynamic process and sustained trading success requires the ability to modify and even change strategies as markets evolve. Successful traders have the ability to adapt to the changing dynamics of the market and in the process maintain their consistency of performance. - GILL BLAKE

Today's Financial Events
Time     Currency   Detail     Forecast    Previous

Thursday, February 2, 2012

8:45am  NZD        Employment Change q/q     0.2%  
8:45am  NZD        Unemployment Rate     6.6%  
10:50am  JPY        Monetary Base y/y    14.6% 13.5%  
11:00am  NZD        ANZ Commodity Prices m/m     -0.8%  
11:30am  AUD        Building Approvals m/m    2.3% 8.4%  
11:30am  AUD        Trade Balance    1.23B 1.38B  
6:00pm  CHF        Trade Balance    2.85B 2.95B  
8:30pm  GBP        Construction PMI    53.0 53.2  
9:00pm  EUR        PPI m/m    -0.1% 0.2%   
11:30pm  USD        Challenger Job Cuts y/y     30.6%  
12:30am  USD        Unemployment Claims    371K 377K  
12:30am  USD        Prelim Nonfarm Productivity q/q    1.1% 2.3%  
12:30am  USD        Prelim Unit Labor Costs q/q    0.9% -2.5%  
2:00am  USD        Fed Chairman Bernanke Testifies      
2:30am  USD        Natural Gas Storage     -192B

Australian Corporate Calendar
Ceramic Fuel Cells Ltd         Trading statement

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.
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Good Morning & Good Luck!

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Aud/Usd 1 Hour Chart
Saturday, 10 March 2012 at 12:40:00AM AEST

Australian dollar lost some ground after the NFP release and now came down to support line connected from 1.0508. We still favor a breakout higher, which will confirm selling for wave 5 headed then towards 1.0460.