12 April
Technical Analysis
Hi Traders
OUT OF VOLUME! MARKETS CORRECT. - TECHNCIAL ANALYSIS
US Indices, Dow Jones and the SP500, over the last week have been creeping up to their current
highs on very low volumewith no sight of buyers. This is a sign that markets need to rebalance,
looking to their demand price points for support.
The Materials sectors are the catalysts for the correction with Base Metals such as copper correcting into
450 (Comex) while Crude corrects into and across 110. While this is unfolding the AUDUSD will swing
three times across 105. These markets will eventually find support and push higher however this may
take up to a week. We are also seeing US BHP at 100 and BHP local at 50, the same as WPL.
We call these prices “Major TradingLevels” and would expect the price to gravitate and stick to these
prices much the same as the ASX200 gravitates and sticks at 5000 the psychological finish line.
See our Long Term Counts for these Below
We have about 100 trades in play and we will be looking to sit out this coming small correction before
repositioning for the next set of trades in line with the USD and Commodities corrections.
We also give you a look at our EarlyBird Report for today!
And, this week we include also an interview with a Member and how he trades CFDs with some success!
Thanks for your time and consideration. Trust all is well with your trading! If not why not try our service with
a 1Month Trial? I will happily give you a 30 minute Personal Trade Coaching Session if you make that
commitment. I’m here to help as your trading mentor! I have many genuine comments from our Members
online if you would like to hear other traders feedback - Techncial Analysis
Talk to you again soon. Pete.
PS. Call anytime: 0434 288 367 or 02 4448 6020.
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01
1.1 ASX – XJO, BHP, WPL: Long Term Counts Measure Up!
XJO 8 April LONG TERM CHART - Technical Analysis
This has been our long term basic ElliottWave count.
I have always taken this with a pinch of salt but it has been unfolding quite well.
BHP Reaches our 50 target
BHP 6 April Daily Chart - Techncial Analysis
The 50.00 (TL5) is the old high and in the bigger picture double tops are not the end of a bull campaign.
As mentioned a week ago BHP in the US had started the early run and the Local BHP normally catches
up when its ready, the US BHP is nearly at 100 TL1 where we will see a larger correction.
We can expect a small correction at 48 (mTL8) and a larger correction across TL5 / 50.00
WPL Reaches our Target - Technical Analysis
WPL Daily Chart Posted 25 March
Support 40 (ML4) Resistance and target 50 (TL5) The MinorLevel 48 (mTL8) will see short term profit taking.
We have been long in the weekly Robo system 2 from the 21 March and will take 75 to 100% profit at 50.00
depending on the state of Spot Crude at the time
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1.2 Today's EarlyBird Report – 12 April
Technical Analysis Key Market Drivers
Dow Jones Index -0.12% 12,365
US Dollar Index -0.01% 75
US Spot Gold (Globex) 1460
WTI Oil (Globex) 110
Copper (Globex) 445
US BHP +0.94% 102
Base Metals: Mixed
AUDUSD 1.0490
EURUSD 1.4425
SPI 4980
NEW YORK Dow Jones
US stocks fell slightly Monday as investors traded cautiously ahead of the first-quarter
corporate-earnings season.
Commodities
US Spot Gold (Globex Futures June) 1460
The expected weakness resistance in SubGroup2 (SG2) 1465 I 1472 I 1480 is still unfolding, the 1456
is the lower end support, but it will be interesting to see if the price will stick within SG2, any way the
correction should not be a big deal once complete we should see a push higher to 1500 the
MediumLevel ML15.
I should mention that SG2 can hold the price for some time, I could be wrong is saying that but
accommodate that thought all the same, with a reflection through to Gold stock at their respective levels
Oil WTI (Globex Futures) 110
The price stayed within Group 1 (113) of 110 MinorLevel I know this can be confusing for new traders,
but once you get it, it’s very helpful.
So now we will see the correction unfold across 110 (mTL1) the simplest form of the correction is the
abc 5-3-5 Zigzag pattern a three wave structure, the move down is the first and it is incomplete Wave a,
it can move down to 108 technical support and the first sublevel as its always important to work with
the small levels around the main level, the main level is the first step but the smaller levels plus the
patterns is the next step better understanding and trading.(techncial analysis)
Once this abc correction is complete we should see higher prices
Base Metals
US Spot Prices (24HR in l/b)
US Copper: Last: 4.44+
US Nickel: Last: 12.52+
US Zinc: Last: 1.13+
US Aluminium Last: 1.19=
Copper (Globex Futures) 445
Copper should stick to 450 within reason in an abc corrective pattern across this level,
once completed, then move higher towards 500. The AUDUSD will swing at 105 abc pattern,
this will influence local stock also, plus the local market is at 5000.
Forex
US Dollar Futures (c) DXY 75.20
The price is in subgroup1 of 75 and therefor bounce around, before moving down.
Group1 75.10 I 75.20 I 75.30 understanding that there is a difference in price action when a
market is moving down through Group1 and when a market is moving up through Group1,
sure one is going up and one is going down and a trader would scale out going down through
each level and if going long would scale in on each level of support, but its interesting to
understand the nature of the whole movement and the parts within it, as this is for all
Group1s micro, sub and minor. On the way down the price will bounce at each level simply
because there are always orders sitting there on the bid side, eventually the price gets trapped
within the group, you need to observe this over and over, there are many subtle points and
each time you pick up a new one and it becomes a new tool for your tool box.
Watch to see if the price works around the 75 MinorLevel and becomes the retested resistance
because if your trading the Euro you will need to work with this on the flip side.
If the top of Group1 75.30 becomes support then the market enters the bullish phase
EURUSD
TradingLevels: Pull back in the 144 (approx.) then up again
Elliott Wave: Wave four into 144 (iv) then wave (v) up through 145
Trade Strategy: Longer term traders continue to hold long, shorter term traders look for support
around the 144, once the price is at 145 watch the DXY at 75 this could take time for the price to
work around this level, once its retest 75 as resistance you can go long here, if this price action
on the DXY at 75 can also occur while the Euro is at 144 depending on the size and time of the
wave four correction here
AUDUSD
TradingLevels: Keep an eye on the corrective process and pattern of Copper and Crude while
the AUD corrects into and across 105 the Midpoint of 1.00 and 110 the number 5 is the second
strongest number and we are going to see that here. The distance the price travel above 105 is
roughly the distance we can expect it to move down. This would be the first swing of three
across this level
Elliott Wave: Hopefully we will see a simple correction such as an ABC across 105, the low of
wave four of one lesser degree is around 10410
Trade Strategy: The market is in a larger ABC correction so you will need to know what you
are doing here, the current move down is the Wave A and will be in five waves, you will also
need to understand the wave four of one lesser degree and the levels around that structure
as target price points. If you’re a long term trader than wait for this correction to complete
three swings then look for support on 105 and trade long, short term traders need to navigate
the sublevels as support and resistance
Indices
Dow Jones Futures CFD 12,360
TradingLevels: We are seeing further pressure on levels of support so we need to expect
further weakness, a larger correction. As mentioned earlier the 12350 is a trigger for weakness
even the 12,372 SG2 is a reference point, we now need to look at the 12,300 the MinorLevel
and the top of MinorGroup1, This also means bringing in the 12,272 with the 12,300. We are
seeing Crude and Copper meaning Materials correct effecting the Asian market so this will
have some reflection on the US markets. The question is how large of a correction and how
long, my guess is a week for the ABC corrections to play out in the commodities
Elliott Wave: Not sure how far the correction will unfold, if it’s a wave four then 12,300 or
12,200
Trade Strategy: trade sublevels as retested resistance short
S&P500 CFDs 1,322
TradingLevels: Back to the 1300? With bounces of each sublevel 1320 and 1310
Elliott Wave: Same -The current high is either wave (iii) or Wave (1) the size of the
correction is still unknown as they can easily double in size, so as on our charts if it’s a
Wave 2 can come back to 1300 and if it’s a wave (iv) like I will explain in the video then the
1320 would be about right for the low
Trade Strategy: Short sublevels
FTSE 100 CFD 6030
TradingLevels: Still struggling, expect a pull back and the selling to speed up
Elliott Wave: the price can pull back to 5900 the wave four of one lesser degree, this may
not be the case, there are also many supports on the way, The top has been struggling
for some time the buyers are there once this is recognised the selling could be sharp
Trade Strategy: Short term direction is down 6000
SPI Futures 4980
TradingLevels: the 5000 will see natural selling
Elliott Wave: 5000 is top of a wave three, so a wave four across 5000
Trade Strategy: because we are at 5000 just keep the trading ranges very small
like the sublevels
Today's Summary
Overseas Indices have been struggling to hold up over the last week or so and traders are
recognising there are no buyers and now that commodities are correcting across their respective
levels gives an excuse to sell of stock / Indices, the question is how large and how long are the
Indices corrections going to be, I can only line them up with the commodities which are having
their ABC corrections, this could take a week at a very rough guess, more work need to go
into the indices and the commodities.
The other problem we face is long positions on the local stock, there are of course trades
operating in different time frames daily weekly monthly and quarterly.
The Daily Robo systems can take care of themselves the weeklies have had a good run and
we have been generally scaping off profits at minor and medium levels, the newish long weekly
trades are a concern, so a small quick loss is a good healthy loss, so protect those positions
with each a daily a daily Robo hedge with another stock or set a tight stop on the position. The
Monthly Robo trades may survive ok, however make sure you understand the risk and if it’s
not acceptable cut half of the position so you can think clearly.
Proactive - If you're normally a weekly or monthly trader, you may need to make the effort to
insure by hedging a few daily short trades. Sure they can lose but its insurance for your
bigger picture.
Today's Trading Quote
Charts not only tell what was, they tell what is; and a trend from was to is (projected linearly
nto the will be) contains better percentages than clumsy guessing. — RA Levy
Today's Financial Events
Time Currency Detail Forecast Previous
12th-13th NZD REINZ HPI m/m 2.3%
10:01am GBP BRC Retail Sales Monitor y/y -0.4%
10:01am GBP RICS House Price Balance -23% -26%
10:50am JPY Monetary Policy Meeting Minutes
10:50am JPY Bank Lending y/y -1.8%
10:50am JPY M2 Money Stock y/y 2.6% 2.4%
12:30pm AUD NAB Business Confidence 14
12th-15th CNY New Loans 603B 536B
12th-15th CNY M2 Money Supply y/y 15.4% 15.7%
5:00pm EUR German Final CPI m/m 0.5% 0.5%
5:00pm JPY Prelim Machine Tool Orders y/y 73.9%
7:30pm GBP CPI y/y 4.4% 4.4%
7:30pm GBP RPI y/y 5.4% 5.5%
7:30pm GBP Trade Balance -8.1B -7.1B
7:30pm GBP Core CPI y/y 3.4% 3.4%
7:30pm GBP DCLG HPI y/y 1.3% 0.5%
8:00pm EUR German ZEW Economic Sentiment 12.2 14.1 \
8:00pm EUR ZEW Economic Sentiment 29.8 31.0
9:15pm USD FOMC Member Dudley Speaks
11:30pm CAD Trade Balance 0.7B 0.1B \
11:30pm CAD NHPI m/m 0.4% 0.2%
11:30pm USD Trade Balance -44.1B -46.3B
11:30pm USD Import Prices m/m 2.1% 1.4%
12:00am CAD BOC Rate Statement
12:00am CAD Overnight Rate 1.00% 1.00%
1:00am USD IBD/TIPP Economic Optimism 45.7 43.0
5:00am USD Federal Budget Balance -157.5B -222.5B
5:45am USD FOMC Member Tarullo Speaks
5:50am USD FOMC Member Fisher Speaks
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 – EURO looking stong
EURUSD Intraday
Monday, 11 April 2011 at 10:15:00PM AEST
US dollar recovered a little bit more against the Euro in the past few hours, but a decline from the
highs is still in three waves, now with a triangle in wave b). As such, uptrend still possible, but trend
line and Fibo supports around 1.4390 must hold as already mentioned earlier.
EURUSD 4 Hour Chart
Monday, 11 April 2011 at 4:20:00PM AEST
EURUSD reached fresh weekly high on Friday, and finished the week very supported with more
gains likely to come in days ahead. However, besides higher highs and higher lows, the pair is still
not showing any clear larger impulsive advance from 1.4 region. We could be in wave three of three
situation, but in this case we need to see break above through the trading channel and then towards
1.4550 region, where 161.8% Fibonacci extension level is placed. Only in this case we would focus
on more gains from wave 4 towards wave 5.
Critical/invalidation region is at 1.4347.
EURUSD Daily 10 April 2011 - Uptrend in progress, support channel line must hold!
Euro extended its gains in the past week against the US dollar after the ECB increased the interest rates.
Pair broke through highs from Nov 2010, but even more importantly, it also moved above the falling trend
line connected from 2008 highs. As such, the bullish uptrend remains fully in progress within wave III
targeting potentially even 1.5 psychological region in coming moths; where you will also notice 161.8%
Fibo extension, which is typical third wave target. Meanwhile the lowest support line of a trading channel
must hold otherwise bias will likely change, with alternate count in view, which shows that leg from start
of 2011 is just a wave B, part of incomplete flat correction in wave II.
Want to follow more of our Forex? We have Intraday, 4Hourly, Daily and Weekly charts posted
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Recently we spoke to one of our Members, Vincent Parletta BDS MBA
What's your trading background?
"From 2003 to 2006 I bought and sold shares with no real plan and no education.
I had a full time job and devoted little time to learning about the markets operation.
The market was in a bull run and at the time you could just throw money at the market
and make a profit. I met Peter Mathers in 2006. Talking to Peter opened my eyes to trading.
I remember in 2006 that for the first time, I started to consider and understand about
when, why and how much I should buy (or sell), and most importantly, when to exit.
From 2006 onwards, I have been more mechanical, less emotional, and very strict in
terms in exits. Recently my trading has taken a new direction with Peter's help, and I
have reduced my fulltime work to part time. I have as my goal to trade fulltime in the
near future.
What do you trade now mostly?
Mostly shares long and shares and CFDs short. Generally I limit myself to ASX top
50 companies.
What does your day-to-day or regular trading regime comprise?
Over the years I have developed an Excel program using MSN Stock Quotes. I download
end of day data each night which uploads into my excel program. I then review my
positions and determined whether I am adding or exiting the following day. I review
Peters commentary in the tradinglounge.com.au Members area as well as ASX top
50 charts. I email my broker orders to buy or sell. I communicate with my broker at
lunch time each day .
How do you utilise the TradingLounge?
In my opinion, Trading Lounge is by far the best resource available to anyone trading
and investing in the shares or other derivatives. I use the TradingLounge Analysis Service
to gain an overall picture of the market in general, as well as honing in on Peters’ view on
individual stocks. I use Peters TradingLevels as price points for entry and exit. I believe
being a subscriber to the TradingLounge Analysis with the wealth of information it
contains, gives me an edge over others who are not aware of the TradingLevels
philosophy.
Please share your golden CFD/Forex/Share trading rules?
As difficult as it is sometimes, you must teach yourself to exit a losing position as early as
possible. I learned this the hard way as you may read below.
What about past trading experiences?
WORST: I was killed in 2006 when I left a CFD index position open and went on holidays
and did not review my position for about two weeks. When I came back to the position a
fortnight later, my position was a losing position and I was unsure at the time what to do.
I exited at a loss of many thousands of dollars. At the time was upset, but now, four years
later, I look at it as a building block in my education. At the time I was very upset.
But, in the bigger scheme of things now the financial loss is irrelevant.
The educational gain I received though was very important – cut my losses short!
I have not let a trade slip away from me like that since.
BEST: One of the best and funniest experiences for me was when I shorted the ASX200
CFD one night, went to bed late and I was picking Peter up from the airport the next
morning in Adelaide. In the morning I hopped into the car, drove to the airport and
met Peter (he was giving a lecture series in Adelaide). I hadn’t had much sleep and
we drove back to my place for a quick chat. On the way home Peter mentioned that
the Dow have dropped 300+ points overnight and our market was likely to do the
same when it opened. When we arrived I told him about my short position from the
night before – we opened my CFD platform and the ASX200 CFD had dropped
about 120 points per contract overnight. Peter and I had a nice laugh together
and went out for breakfast – my shout!
Any parting words of advice? TradingLounge Analysis Service is a fantastic resource
– utilise it. Develop your own trading ‘edge’ but most importantly, cut your losses
short. Thank you for this opportunity and on behalf of myself (and many other
members of TradingLounge Analysis Service I'm sure), please thank Peter for
his generosity in sharing his knowledge and wisdom with us.."
Technical Analysis Report - TradingLounge.com.au
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