7 June
Technical Analysis Report
INDICES:
SHORT TERM – Technical OVERSOLD
EXPECTATION – BOUNCE, FOLLOWED BY ANOTHER MOVE DOWN!
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01 Today's EarlyBird Technical Analysis Report – 7 June
Market Drivers
Dow Jones Index -0.42% 12,100
US Dollar Index +0.35% 73.91
US August Gold (Globex) 1545
WTI Oil (Globex) 99
Copper (Globex) 412
US BHP -0.50% 91.32
Base Metals: Steady
AUDUSD 1.07
EURUSD 1.4570
SPI 4537
Dow Jones News
Stocks retreated for a fourth day and oil declined below $100 a barrel amid concern the global economic recovery is faltering. Treasuries pared declines before the U.S. sells $66 billion of notes and bonds this week.
US August Gold Futures 1543 TradingLevels
The high last night around 1555 is about right for the top of the rally and can work lower from here the 1550. That said we need evidence of the turn down and under 1530 would be a clear confirmation.
On the flipside of still further upside the current reaction at 1550 Midpoint level is simply normal and finding support in the 1535 – 1540 range then pushing back above 1550 would be the normal path for the market to follow for higher ground.
So we simply need to give it time here and gather the evidence before moving on, the US Dollar such continue edging down and that will now depend on the retesting of the 74.00 which its doing now, but a move to around the 73 can be expected, this would at least allow gold to retest the 1550, but this still won’t give us an answer, we would need to see even more of the pattern. The other wave counts to look at would be the Euro and AUD in relationship to the US Dollar as their moves up should also be ending soon, all these market can turn together. Indices are also short term oversold.
Oil WTI (Globex Futures) 99 Elliott Wave
The price is under 100 bearish bias, but the price has not moved away from the 100 as yet, it has been retesting the 100 but the resistance is holding, so the bias is for a move down.
The Wave count would also lean towards a move down with stops above 100.
Oil is moving with Indices and Indices are short term oversold, so this is the risk element of seeing the price move to 102 before continuing a move down towards 90.
I guess the point here is to look for weakness in the ASX200 Energy sector, our EXJ has resistance at the MediumLevel 16500…
Base Metals Technical Analysis
US Spot Prices (24HR in l/b)
US Copper: Last: 4.13+
US Nickel: Last: 10.25+
US Zinc: Last: 1.01+
US Aluminium Last: 1.17-
Copper (Globex Futures) 414
The rally up over the last few day should be complete now with the 415 acting as resistance, as we were looking for a high in this 415 – 420 region, of course I can be wrong, but the point is that we should at least be aware of a turn down from here with the 415 as the resistance. We would be looking for a wave three down into 400, which in turn would see the ASX XMJ checking 13000 for support, which I think would give way after time.
Forex
US Dollar Futures (c) DXY 74.00
Support at SG2 73.72 and now retesting 74, so this is the line in the sand as support or resistance in terms of trading this market or the Euro.
The Wave count should see another move down for the DXY and another move up for the Euro, but if the Euro moves under the last high of 145, then that count is over, we could even use the 14550 as a early trigger.
We can also bring he Gold into the count now as there is a wave count that would have the rally high for gold in place, but this is not confirmed as yet
EURUSD Technical Analysis
TradingLevels: The thinking is a move down to 14550 then a wave five above 14650, so a move to 145 which is a support but it creates overlapping wave structures and therefor brings a bearish bias in the wave count
Elliott Wave: A wave four move down to 14550 then a wave five up to above 14650
Trade Strategy: If the above wave count is correct? Then wait for the price to climb back above 146 as support and the DXY to be under 74.00 as retested resistance, then trade long on the Euro to 14650 and exit, if support is found on the 14650 then trade long to 147.
If the price just drops to 145 then there is a problem with the current wave count, but the point being that the price action around the 145 and 14472 will be choppy so be careful
AUDUSD 2:30PM AUD Cash Rate
TradingLevels: Support at 10672 and 107 and the resistance10772.
Elliott Wave: We were expecting another wave up to the 108+ and it still may arrive off the 10672 to 107 support levels, a move up would complete the structure for the rally and the top we are looking for.
Trade Strategy: The RBA rate announcement is today and traders mostly run the AUD up and then sell it off, the Elliott wave is looking for one more wave up, but we can’t count on anything on rate days. If it is run up and the news is good of no rate hike, it’s still likely to be sold off, buy the rumour sell the fact stuff
Indices
Dow Jones Futures CFD 12,072
TradingLevels:
12000 is the next support and the market is short term oversold so we are still looking for that bounce, which can occur here at 12100 or 12000, the point is that shorting from here is risky in an oversold market, is more of a place to take part profits.
Elliott Wave: In the big picture and as you can see on our SP500 charts the market can be in a large ABC correction that started late Jan, that would actually complete around these current lows, so this bullish count is not out of the picture yet and we can’t just forget about it. Then on the flipside is the large bearish picture and if this is the case, the we would be looking for a bounce from these oversold lows then another strong move down through to the MediumLevel 11500, so its step by step and working within the smaller wave structures, staying with the facts of the short term and not getting opinionated over the long term.
Trade Strategy: Expect a bounce from either 12100 or 12000; it would be a messy and struggling move up battling with resistances at every level. The real supply is at 12300 this would be the obvious target, however every 100 points is offering resistance
S&P500 CFDs 1,289
TradingLevels: expect 1272 as support while the 1300 is retested
Elliott Wave: Short term oversold
Trade Strategy:
FTSE 100 Futures 5825
TradingLevels: Medium term view, the price can still retest 5900. That said the pattern between 5800 and 5900 is corrective and once completed should move down
Elliott Wave: The sideways pattern above 5800 is corrective ABC I will explain the cons/pro in the video
Trade Strategy: bounce off 5800
SPI Futures 4730 2:30 PM: AUD Cash Rate
TradingLevels: 4572 resistance
Elliott Wave: The last move down from above 4700 is slowing into the 4600 to 4530, we expecting many of these Indices that are oversold to bounce
Trade Strategy: The 4500 will pull on the price, but watch the US Indices Futures for any bounce, that would be finding support on 12100 and more so 12130 subgroup1 as this will help any move up
On the SPI you can see the SG2 4565 I 4572 I 4580 is the resistance, so any time over the days ahead this as support would create long trades.
In the meantime the watch the Dow if it finds support on 12100 is the important first step up.
However with the Dow and SP500 being slightly softer you will be working with the 4550 as resistance and the 4530 I 4520 I 4510 SG1 as support which would be choppy price action
TECHNICAL ANALYSIS Summary
Still looking for that rally, I can see the Indices slowing down, just no signs of a move up, even though the Indices have been edging down they appear to have been consolidating at least, the obvious is that they are oversold, the price points they will work from is the question at hand and the Dow is a little wide between 12100 and 12000, but support on 12100 is a key. The SP500 is 1300 and 1272 and then finding support on 1300. And very generally speaking the 4500 for the ASX200 with resistance around the 4600. And yes the general trend is down, but we are just watching out for the short term oversold bounce, partly to lock in profits and partly to re-sell, short the market again. When I was looking at the markets on Sunday and more so the structure of the FX I was thinking of the bounce Midweek rather than early, so we may be on cue.
I would imagine the rallies to be short live but we can still trade them up, when they arrive, but we should keep a close eye on the Oil and Copper markets and the US Dollar and Euro and AUD are also expect to turn, so be very sharp and accurate with any trades on the long side and this is not today, but Wed…
The RBA Rate is today at 2.30PM but you day traders know this.
Trading Quote
"You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets."
– Peter Lynch
Today's Financial Events
Time Currency Detail Forecast Previous
9:30am AUD AIG Construction Index 37.9
2:30pm AUD Cash Rate 4.75% 4.75%
2:30pm AUD RBA Rate Statement
3:00pm JPY Leading Indicators 96.8% 100.1%
7th-10th GBP Halifax HPI m/m 0.4% -1.4%
5:15pm CHF CPI m/m 0.0% 0.1%
7:00pm EUR Retail Sales m/m 0.4% -0.9%
8:00pm EUR German Factory Orders m/m 2.1% -4.0%
12:00am USD IBD/TIPP Economic Optimism 42.1 42.8
5:00am USD Consumer Credit m/m 5.2B 6.0B
5:45am USD Fed Chairman Bernanke Speaks
9:01am GBP BRC Shop Price Index y/y 2.5%
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 a floor to bounce ideas around.
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02 FOREX – USDJPY: downtrend
USDJPY 1 Hour Chart Technical Analysis Elliott Wave
Monday, 6 June 2011 at 8:10:00PM AEST
Sub-structure on USDJPY from 81.74 is definitely not the clearest out-there, but lower highs and lower lows is evidence of a downtrend, which is expected to continue within wave 3 of C as also presented on our 4h review. Notice that prices are also trying to break lower support line of a trading channel, which will be another evidence of a bearish sentiment, of course, if we get a daily close somewhere below 80! For now, 81.84 is our critical region!
USDJPY 4 Hour Chart Technical Analysis Elliott Wave TradingLevels
Monday, 6 June 2011 at 4:40:00PM AEST
USDJPY is falling for the past few days, as poor economic news from the US shocked the markets across the board.
As you know, from a technical point of view, we anticipated this sell-off, which however is still incomplete, as we are looking for a wave C) decline with targets seen below 79.57! Critical region was now moved lower, down to 81.77!on
USDJPY Daily Elliott Wave Technical Analysis
28 May 2011 - corrective pull-back in process
Since Usd/Jpy reversed lower a few weeks back the makret formed only one leg down from 85.50. But even if pair is trading in a corrective wave, labelled as a blue wave (2), then we know that we need three sub-waves, before uptrend may continue. As such, even more downside is expected in coming week, likely towards 78.50/79 region which will be a third leg, which may have already started at 82.20 in recent week.
USDJPY Weekly Technical Analysis Elliott Wave Trading Strategies
20 March 2011 - ending diagonal near completion
Usd/Jpy spiked into a new low, after the few months of a consolidation and potentially completed a multy year downtrend. As you might noticed, we are looking for an ending diagonal pattern, which is showing all needed sub-wave structure for a completion. As such, a turning point may follow over the coming months from 76.00 region, but break above the upper blue resistance line is still required before a long-term reversal can be confirmed.
We also see a bullish divergence on both, RSI and MACD indicator, which also indicates a losing strength of a bear market.
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