28 June
Technical Analysis Report Weekly
SILVER LINING
Both Silver and Gold are moving down quickly and after a Elliott Wave ABC bounce they will be moving down again. Position yourself correctly for the next short trade!
International Forex focus this week is on GBPUSD Elliott Wave and like Silver making moves to the downside.
Thanks for your time and consideration! Rgds, Pete.
PS. Call anytime: 0434 288 367 or 02 4448 6020.
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01 Today's EarlyBird Technical Anlysis Report – 28 June
Technical Market Drivers
Dow Jones Index +0.91% 12,043
US Dollar Index -0.32% 75.34
US August Gold (Globex) 1502
WTI Oil (Globex) 91
Copper (Globex) 409
US BHP +0.76% 89.28
Base Metals: Steady / Positive
AUDUSD 1.0440
EURUSD 1.4280
SPI 4471
US News Wire
U.S. stocks traded near session highs on Monday, rebounding from three days of losses, as the technology sector surged and less onerous-than-expected banking capital requirements prompted big gains in financial stocks.
The Dow Jones Industrial Average rose 154 points, or 1.3%, to 12089 in afternoon trading, led by Microsoft and Bank of America. The Standard & Poor's 500-stock index rose 14 points, or 1.1%, to 1283, led by strong gains in technology, consumer discretionary and financial stocks. All 10 of its sectors traded in positive territory.
The technology-heavy Nasdaq Composite rose 38 points, or 1.4%, to 2691. Microsoft jumped 4.3%, one of the biggest gainers in a broad rally for technology stocks on the heels of Friday's big drop.
International regulators agreed to require the world's largest banks to hold an extra layer of financial padding. The agreement, hammered out over the weekend in the Swiss city of Basel, will force global banks that are considered too-big-to-fail to maintain capital cushions that are significantly thicker than other institutions.
US August Gold Futures 1498
Gold and silver have both had or rather having their five waves down (impulse wave) that are complete or nearly completed. Once they are they will have their counter trend rallies, abc corrections, but don’t expect too much of a rally if Stocks don’t rally, any way once the rally is completed abc 5-3-5 structure they will continue down.
When looking at say gold’s trend down on the 30 minute chart, you can notice its expanding, that is, in the structure down each trend is increasing and each correction is expanding, so it’s growing, this is important to notice because it give us a sense of what its doing and you become connected to it, or rather it starts to develop meaning. Gold has not let go of the MediumLevel 1500, allow it to flicker around this price point to see if it develops support or resistance, your far better off being patient at a level until your clear were the weight of the market is sitting and that the retest are confirming the strength of direction, large levels are where the corrections are and that’s where you can lose money. The price may drop from under the 1500 or it may get to 1510 first. Silver will retest 34 this is a Fibo number so expect a few retests and therefor corrective patterns
Oil WTI (Globex Futures) 90 Elliott Wave & TradingLevels Analysis
Still expecting a little more effort from Oil to bounce off 90, but its slow, any way while its above 90 the MediumLevel (ML9) its supported, only as resistance can you short it or at least a break through, otherwise you can get trapped.
Base Metals
US Spot Prices (24HR in l/b)
US Copper: Last: 4.07-
US Nickel: Last: 10.09+
US Zinc: Last: 1.01+
US Aluminium Last: 1.11+
Copper (Globex Futures) 407
Same old story here while the price is above 400 MediumLevel, much the same for the LME Copper at 9000 also a MediumLevel which is really just trying to find support after reacting to 10,000 (TL1) Major TradingLevel, as the process is the Arrival, Reaction, Support, then a move up through the TL1 level, the flipside is total failure at the TL1, this is why the price grappling for support at 9000 ML9 is very important any failure here would see the price at the next largest number 8000
Comex copper – short term, if the price can find support above 410 then that is the first step on the positive side, this should be observed as the price on our local ASX200 at 4500 has not rejected the 4500 (mTL5) for a move further down just yet. The XMJ at TL13 / 13,000 as support or resistance is another way to view it, as is US BHP at MediumLevel 90 (ML9)
We are seeing corrective price actions at all of this levels but we have not seen the price let go of this level, this is an important trading element and patience is require, you need a god solid retest of resistance and volume confirming the resistance.
Nickel is a different story its more bearish…
Forex
US Dollar Futures (c) DXY 76.10
The SP500 and the Euro are in sync with their current corrections and the DXY is the mirror opposite, once you understand the corrective patterns on the SP and Euro you can see the larger correction at 76. The DXY, from the current high around the 7650 we can look for and work out five waves down to SG2 or the Midpoint 75.50
EURUSD
TradingLevels: It should be pointed out that in the bigger picture there are two counts (three actually) see daily chart. While the price is above 140 (May low 13965) there is opportunity that a bullish count is possible, If and once this is taken out then it leave two bearish counts. We just need to make you aware of this price point and what it means. We will talk more of this later
Trade Strategy: Short term (2 minute chart), the price is inside SG2 14265 I 14272 I 14280 with the 72 being the pivot that is require as support or resistance. if support is found on 72 then expect a larger correction at 143, a bit like what happened at 142 the price should get trapped with SG1 of 143 and look for five waves up from 14255 low to above 143 SG1
AUDUSD
TradingLevels: If you scalping the sublevels then the direction doesn’t really matter that much, but for the position trend trader, there is opportunity approaching, the moves predicated in last time have come to pass and the price is tinkering under the support 105, want we need to do now is understand the wave count in more detail with the main point of seeing the 105 develop as the resistance, these aspects we can talk about in the video as the next move down is worth catching
Elliott Wave: The wave structure extended, from 106 to 104 five waves. Expect a ABC counter trend off 104, this has already begun and could be seen as the retest of the 105 which is the 50% retracement level the 62% is 10520 The more important level is the 10472 as this is the 38% retracement level
Trade Strategy: Trade the sublevels, support on SG1 10430 is the stepping stone up. The 10430, 10450, 10472, 10450, 10472 and 105 are the important price points to work with. Understand the count on the Euro SP500 and the DXY so you can get the turn point right, meaning the top of the corrective rally
Indices
Dow Jones Futures CFD 12,100
TradingLevels:
When you look at the price working within a range and that range getting narrower we can get to see the weight and strength of the market which in turn offers the next direction. Just to refresh, the 12000 is the pivot the market has been vibrating to, with the 11900 as support and the 12200 high should now drop to the 12100 high, so it will be interesting to see if the 12100 area fails in the next session, but it would be the one after that , that would help confirm that the 11900 would be tested next. The patterns, structure and resistance of 1300 for the SP500 is important, while the price is under 1300 we can expect a new low below 1250, we are also looking at lining up the Euro and dollar with this
Elliott Wave: We have to consider the current move up overnight a counter trend rally that would end next session.
Trade Strategy: If the price fails at 12100 then use SG2 12072 sublevel to build a short position in, do not do this above 12100, essentially 12072 as a retested resistance is required adding through 12065 then the midpoint as resistance
S&P500 CFDs 1,280
TradingLevels: The price is in SG2 1265 I 1272 I 1280 with the 1272 being the pivot.
Elliott Wave: Considering the whole corrective pattern under 1300 a wave four, that maybe ending now with this push up over night? A move under 1272 would help confirm this
Trade Strategy: If the price moves below 1272 next time then look to short
FTSE 100 Futures 5750
TradingLevels: The current price at the Midpoint 7550 is at trend line resistance from the 22nd the 9 June and late May high at 6000, we expect the SP500 etc to finish their current rallies and move down, so the FSTE should follow the DAX down lower, if the Dax can move through 7000 then the support has gone
Elliott Wave: I’m unsure, as the larger structure appears bearish and the short term structure seems positive, so the sublevel will become handy, a move above 5772 and 5800 certainly flips the market into strength. A move under the 5730 creates a bearish pic
Trade Strategy: Resistance 5772 SG2
SPI Futures 4471
TradingLevels: The SPI and the ASX200 have different pattern structures at their lows, the SPI has held its previous lows where the ASX200 has not. The SPI as a positive intraday structure in place and in play. The price for the SPI is retesting 4500 but any support on this level creates a larger rally, if this was the case the strength would be seeing the ASX200 move up behind the SPI and find support on the 4500, this is fine in theory and is only based on one small structure from the SPI. We have to be mindful of the SP500 Euro wave count which I will point out that is expected to roll over down, so the 4500 for the SPI can stay in place and produce lower price levels, as most times its about support and resistance and in this case the retest of 4500 as resistance, all I’m saying is, if the SPI finds 4500 as support during the next night session, expect a rally, other wise use the SG2 sublevels then the midpoint to short
Trade Strategy: Allow and observe the ASX200 to retest 4500 to see if it’s accepted or rejected.
Techncial Analysis Summary
Our short term thinking is that the current rally overnight in the SP500 and the Euro are just that rallies, once completed will continue down. The US Dollar and US 10 year bonds fit this picture, however analysis is one aspect and trading is another, so always work the support and resistance with money management stirred in the risk mix.
The ASX200 is clearly under the 4500 (mTL5) we will see a retest of this level today, if the rally on the SP500 (e wave in triangle) is correct and it rolls over next session then the 4500 will hold as resistance and if this is the case then we can start to look at the lower MinorLevel. This 4500 is a 5 level second strongest number and it won’t let go easily, the AUD is in the same boat at 105 and of course there is a relationship between these markets.
ASX Stocks, many markets have been trending down strongly, some have too much selling pressure to bounce, but the stocks that have less sellers will rise, the trick to the next setups to trade short is simply and the answer sits in the volume, any stocks the rise on less volume that the previous bar can be shorted as this is weak buying, if you can line this up with the level, price and even better the market depth orders then you can pin point the price to work the set up.
Trading Quote
"Most successful traders at some stage have a breakthrough, an Aha! experience. Often this is not new information, or a new approach, but the time was just right, they had matured and were ready to ‘see’ in a new way, to apprehend things clearly on a conceptual level, rather than a technical level." Dirk Du Toit
Today's Financial Events
Time Currency Detail .................... Forecast Previous
11:00am AUD RBA Assist Gov Debelle Speaks
4:00pm CHF UBS Consumption Indicator 1.59
4:00pm EUR GfK German Consumer Climate 5.4 5.5
4:00pm EUR German Import Prices m/m -0.4% 0.3%
All Day EUR German Prelim CPI m/m 0.1% 0.0%
6:30pm GBP Current Account -5.0B -10.5B
6:30pm GBP Final GDP q/q 0.5% 0.5%
6:30pm GBP Revised Business Investment q/q -7.1% -7.1%
7:00pm GBP Inflation Report Hearings
11:00pm USD S&P/CS Composite-20 HPI y/y -3.9% -3.6%
12:00am USD CB Consumer Confidence 61.1 60.8
12:00am USD Richmond Manufacturing Index 2 -6
2:00am USD FOMC Member Fisher Speaks
2:45am CAD Gov Council Member Cote 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 here to bounce ideas around.
4. 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 15th July.
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02 International: 01 Silver – fast downtrend
Silver Intraday Chart
27 June 12:45 EDT
Silver still trades nicely lower since prices broke 35.80 support, highlighted in the past week. Notice that prices are testing lower support line of a trading channel, where another breakout should put further losses into action. However, be aware of a corrective wave 2 bounce as move from 36.76 can be counted in five waves.
02 GBPUSD – catch the pound down
GBPUSD 30 Minute Chart
Monday, 27 June 2011 at 9:23:00PM AEST
Cable is in a "short Covering" mode, now testing levels around 1.6 psychological level. Notice that prices now moved well above red falling trend line, so it seems that corrective wave ii is actually still unfolding, and likely forming a flat correction. If that's the case then wave (c) should find resistance in the near future, and send pair back towards the lows. Our larger trend remains down!
GBPUSD 4 Hour Chart
Monday, 27 June 2011 at 3:55:00PM AEST - downtrend in progress
Cable fell already more than 200 pips since price broke through the neckline of a huge head and shoulders pattern, which however appears to be only start of a deeper waves. We are monitoring impulsive but incomplete decline with wave iii) in progress, which may form an extended structure. We anticipate even lower levels, while pair trades below recent 1.6045 swing area; new critical region!
GBPUSD Daily Chart
26 June 2011 - neckline broken, downtrend underway
Finally, cable broke through the neckline of a huge head and shoulders pattern that we were anticipating over the past two weeks. As such, bears are now fully in progress as pair closed on a weekly basis well below the red trend line. Pair is now targeting levels around 1.5740; projected targets measured from R. Shoulder, as shown on the chart.
We are bearish on this pair as long as the market trades below 1.6261 critical region!
GBPUSD Weekly Chart
28 May 2011 - sideways within wave (B)
A huge decline from 2.1160 is unfinished as we can count only one impulse move down that bottomed at 1.3500, labelled as a blue wave (A). With this being said, dollar has still a lot of room to move higher against the sterling in the future, before a Gbp weakness can be completely reversed. As such move below 1.3500 is expected, the only question when a corrective blue wave (B) will finish!?
Well, a powerful reversal from 1.4200 region seen in May 2010 suggests that a decline from 1.7014 was just another corrective leg, a possible wave X), or leg that is part of a contracting triangle. Currently we are monitoring a double zig-gaz possibility with 1.7700-1.800 test yet to come.
If pair will reverse sharply from any reason down below blue support line while 1.7040 resistance holds, then we will likely look for an alternate count; incomplete triangle.
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