Technical Analysis Report
 

Market Drivers

Dow Jones – 12,041 -92%
Base Metals softer
US Gold CFD: 1776
Oil WTI CFD: 97.70
Copper CFD: 347
US Dollar CFD: 77.10
EURUSD 1.3750
AUDUSD 1.0180
Dow Jones CFD 12,066
S&P500 CFD: 1252
FTSE 100 CFD: 5500
SPI CFD 4262

News
NEW YORK -(Dow Jones)- U.S. stocks fell in Monday afternoon trading as investors grew cautious over Italy's ability to implement austerity measures.

CFD Commodities

US Gold CFD: 1776
We still expect gold to move down from here, even though the last internal rally was quite high, the price is moving into SG2 so the 1772 as retested resistance is the set up for the short adding through 1765, expect a bounce off 1750 but each high should ge lower, once you recognise that then short again.
Silver short set up is the failed retest of 34.00.

Oil WTI CFD: 97.70
It’s natural to see prices turn at 100 (TL1) and this time Oil has move equally with Indices, so Oil is back following stock and out main can for Indices is down and this is partly because of the corrective pattern in the Bonds, however this is still not confirmed on Indices yet as pointed out on Monday there is a possible triangle pattern in play for the Indices which can take the prices higher, so we need to see more of the internal structures

Base Metals

US Spot Prices (in l/b)
US Copper:           Last: 3.50+
US Nickel:             Last: 8.62+
US Zinc:                Last: 0.87+
US Aluminium       Last: 0.95+

Copper CFD: 347
Because of the possible pattern out comes, it would be safer to say while copper is above 340 the market is positive under this price expect further downside.
The current price has just arrived at 350 and should expect it to have some time here to develop as support or resistance, for support expect at least five swings across this level, this is why a move back under 340 would create the move up from 330 to 350 as a rally, if it’s a rally then one retest of 350 and then move down. Just be careful here while the pattern is emerging.
The pattern down from 375 to 330 appears to be corrective, so the current move up from 330 to 350 should be part of a larger positive picture and developing support on the 350 in due course would support this, if just that we would want to see five wave up from the 330 and currently there is only three waves, the current move up is very much like the Indices and the Euro and the Euro has developed the most and is bearish because it has pulled back the most, we are waiting to see if the Indices follow.
The other markets such as US BHP is still under the TradingLevel 80 (TL8)* and some of the Asian markets like the Japan and HK have bearish patterns, any way a few more sessions and it will becomes clearer 
*See » TradingLevels Fast Track Intro

Forex

US Dollar CFD: 77.10
Italian bonds continue to rise, you can monitor them here; http://www.bloomberg.com/quote/GBTPGR10:IND
This will place pressure on the Euro and lift the dollar.> One of the main reasons why "for now" higher dollar possibility exists is a bond market, which still shows bullish set-up on the long term treasuries chart. In such cases US yields will weaken which will send the US stocks lower and dollar higher. What we also want to point out here, is that moves higher on stocks and majors, seen on Friday are not confirmed by a bond market.
The support for the Dollar is 7650, then the 77/7720 and while these levels are in place then consider the market positive.The price is likely to retrace from the SubGroup 2* (SG2) 77.72 but the 77.20 must hold. Expect a lot of resistance over the next sessions at the 77.20 and the 78 – 7 is a timing number, 8 is a profit taking number!
*See » TradingLevels Fast Track Intro

EURUSD 1.3750
TradingLevels: the 138 profit taking and supply level held nicely, but what is more important is the move up from 135 to 138 because is corrective rather than impulsive, so this corrective move to the upside points to further downside. As you can see the current low around the 136 to 13550 is the support and would expect to see this support to play out with a bounce or at least a corrective pattern, if the 13550 and the 136 became resistance then the price would drop to the level
Elliott Wave: While the price is in the 135 to 138 range expect more swings but with the bias of further downside, there are only two markets that I can see that would have prices higher, that is copper and the alternative count on the SP500 to the upside, so we need to clear this counts fro a strong bias down to short
Trading Strategy: While the alternative count on the SP500 is in play trade short time frames on the Euro. The move down from 138 to 136 should create a corrective pattern, it may first move through the 136 to 13572 SG2 zone and then bounce from there in three waves 5-3-5 pattern back to 137 roughly. A long trade up would be support on SubGroup1* 13630.
*See » TradingLevels Fast Track Intro

AUDUSD 1.0180
TradingLevels: What has been said for the Dollar and the Euro applies here the move up from the last low 1.0050 to 1.0340 is corrective. Expect to see more swings between 1.01 and 1.03 the price is in Group1*
Elliott Wave: The move down from 1.0340 to current lows 1.0180 is closing in on support levels, give it time at the 1.02 (centre of Group1) to develop as support or resistance
Trading Strategy: just allow the price to retest 1.02 and give it time to develop a pattern you recognise at 1.02

Indices

Dow Jones CFD 12,066
TradingLevels: Since the 25th Oct the price has basically been working with 12,000 and still is, there are two wave counts, one that has a top here and the other is that we have a corrective pattern here and once completed will push higher. The good news is that by Thursday we should have a clearer idea of what we are looking at.
Elliott Wave: The rise of Italian bonds places the bias to the down side for the SP500, however as you know we are tracking two wave counts and we simply need to see more of the unfolding pattern to confirm the trend in the US indices
Trading Strategy:  No direction in trend as yet, perhaps two more sessions.

S&P500 CFD: 1252
TradingLevels: There are two pattern as we have been discussing and these two patterns simply need time to play out and it can take two sessions to do this, I will explain in the video, but you know that we have been taking about the triangle pattern at this high if this is correct then the market will push higher once complete and we will tale about the completion of this pattern in the video, the other pattern is a top is in place and the market will now work lower and quicker, still this pattern need to work to a certain point in that pattern so we can confirm this direction and this is our bias pattern mainly because of the Italian bond market and the US Notes is a current corrective pattern
Wave count: Tracking two patterns and will talk about the details in the video
Trading Strategy: Essentially the market is creating lower tops and higher bottoms, the price is working itself into a corner and will come out in the direction and that is what we are sitting like and Owl waiting for. 

FTSE 100 CFD: 5500
TradingLevels: What was said in the Dow and SP500 applies here to, we just have to wait, but the bias is down
Elliott Wave: Bearish bias of one’s and two’s unfolding downwards
Trading Strategy: Over the next few session s you need to work out where the  resistance is going to come from the 5572 SG2 was the last, so it could come from the 5500, a very strong and clear retest that fails is where the longer term short will come from

SPI CFD 4262
TradingLevels: The SPI or ASX200 does not have support on 4300 yet so we cannot be bullish, it may but it’s not yet.
Elliott Wave: Unclear
Trading Strategy: Work the SG2 with 4272 as support or resistance; simply be on the right side of this price point.

Summary

With regard to the US Indices, there are two patterns we are watching. One is the Triangle pattern pointed out on the SP500 and secondly the pattern of a top in place. **see ElliottWave info
Our bias is towards the top being in place, this is simply because of the pattern on the long term treasuries and the rising Italian bond yields.
But it will be perhaps two days before we have the evidence of this in terms of patterns and price, but be prepared.
Trading Strategies: just stay light and flexible and be preparing to trade any direction. If the break is down then we are looking to build long term short positions into the US indices and Euro. If the break is to the upside then we expect this to be short lived, within a month to complete the 44 day rally from Oct 4. 

Trading Quote

To whatever degree you haven't accepted the risk, is the same degree to which you will avoid the risk. Trying to avoid something that is unavoidable will have disastrous effects on your ability to trade successfully.

Today's Financial Events

Time     Currency   Detail     Forecast  /  Previous 
11:30am  AUD        Monetary Policy Meeting Minutes     
11:30am  AUD        New Motor Vehicle Sales m/m     -1.5% / - 
5:30pm  EUR        French Prelim GDP q/q    0.3% / 0.0% 
6:00pm  EUR        German Prelim GDP q/q    0.5% / 0.1% 
6:45pm  EUR        French Prelim Non-Farm Payrolls q/q    0.3% / 0.2% 
Tentative  EUR      Italian Prelim GDP q/q     0.3% 
8:00pm  EUR        Italian Trade Balance    -2.23B  / -3.15B 
8:30pm  GBP        CPI y/y    5.1%  / 5.2% 
8:30pm  GBP        RPI y/y    5.5%  / 5.6% 
8:30pm  GBP        Core CPI y/y    3.3% / 3.3% 
8:30pm  GBP        DCLG HPI y/y    -1.4%  / -1.3% 
9:00pm  EUR        German ZEW Economic Sentiment    -51.8  / -48.3 
9:00pm  EUR        Flash GDP q/q    0.2%   /  0.2% 
9:00pm  EUR        ZEW Economic Sentiment    -52.7 -51.2 
9:00pm  EUR        Trade Balance    -0.8B -1.0B 
Tentative  GBP        BOE Inflation Letter     
12:00am  USD        FOMC Member Evans Speaks     
12:30am  CAD        Manufacturing Sales m/m    1.1%  / /1.4% 
12:30am  CAD        New Motor Vehicle Sales m/m    1.9%  / -0.4% 
12:30am  USD        Core Retail Sales m/m    0.2% /  0.6% 
12:30am  USD        PPI m/m    -0.1%   /  0.8% 
12:30am  USD        Retail Sales m/m    0.3%   /   1.1% 
12:30am  USD        Core PPI m/m    0.1%   /   0.2% 
12:30am  USD        Empire State Manufacturing Index    -2.0  /   -8.5 
2:00am  USD        Business Inventories m/m    0.2%  /   0.5% 
4:30am  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 Technical Analysis report is written from 3.30 – 6.30AM AEDT
3. Always think things out for yourself, we are only here to bounce ideas around!

Good Morning & Good Luck!