Technical Analysis Report Weekly
 

01    TECHNICAL ANALYSIS – Today's DayAhead Report – 8 May 2012» 
02   INTERNATIONAL COMMODITY – GOLD Latest 3 Charts»
 

Hi Traders 

TECHNICAL ANALYSIS SUMMARY:

With markets being servilely oversold, they can snap back on any positive news like China supporting the economy and Greece staying in the Euro and the current move up in most markets will see at minimum another move up, simply because the Elliott structure up is five small waves, so we can be assured of at least getting another set of five waves.

This is a 5-3-5 structure which is an ABC counter trend, however the ABC can develop into a larger, five waves 5-3-5-3-5 Impulse wave and if this is the case and we get this larger five waves, then we will get another five waves of the same degree. This too would be a 5-3-5 structure of the next degree higher.

This is the tricky bit, what to do with our short trades? 

Well there are two basic choices and then variations on these. First, exit at the open and protect or second choice, keep wider stops to accommodate the possible ABC corrective rally over the next session or two.

In the Robo section (Members Only... why not join 1 Month $19.95!) I have just brought the stops down above yesterday’s high, but you can make your own choices. But don’t let a profit turn into a loss.

The current rally is likely to be a Wave 4, but I cannot confirm that as the structures aren’t clear enough yet.

QUOTES: "Efforts and courage are not enough without purpose and direction" – John F. Kennedy"Any trader can take risk, a great trader can do it with purpose"
"Any trader can take risk, a great trader can do it with purpose"
 

Best Rgds, Pete
PS. Call or email me about any trading query you have!
PPS. Why not see what our Members say?

01  The Detail From Today's DayAhead Technical Analysis Report – 15 May

Market Drivers

Dow Jones 12,504 +1.09% (6AM.AEST)
Base Metals Positive
US Spot Gold: 1590
US Silver: 28.25
Oil WTI: 92.50
US Copper CFD: 350
US Dollar: 81.25
EURUSD 1.2775
AUDUSD 0.9880
Dow Jones CFD 12,480
S&P500 CFD: 1292
FTSE 100 CFD: 5340
DAX CFD: 6363
Shanghai 2459
SPI CFD 4100

News  China signalled it would support the economy and German and French officials said they would work to keep Greece in the euro.

Commodities Trading

US Spot Gold: 1590
TradingLevels: Support SG2 1580|1572|1565 once the price retests the trend into SG2 is should test supply again at 1600 – 1610 we should then see a larger abc corrective pattern across 1600 and then another five waves up, we should look at trading up after the abc corrective pattern across 1600
Elliott Wave: Wave 4 is unfolding, we should expect it back to SG2 1580 or 1572 before seeing a move up above 1600 for wave five. The important point here, is that there are five waves developing to upwards, so if we get five waves up, then after a corrective pattern we will see another five waves up. As Elliott stated, five waves in the opposite direction will deliver another five waves, this may only be an ABC correction up or it can be the start of a larger impulse wave, but from a trading point of view, because we get one set of five waves we will get another this is one of the safest places for using Elliott for trading.
NOTE: Do not trade long now, as the move up to 1600 also has the abc 5-3-5 structure, we need to identify the current move down to SG2 as corrective i.e. wave (iv).

US Silver: 28.25
TradingLevels: If the Gold count is correct then Silver should follow, the current move up simply need to settle in at 28, it will probably prove lower into SG2 2772, but just allow it to unfold its pattern at 28 and then wait for support to develop or not, either way you simply need to know if the 28 will be support or resistance and this take time to get it right
Elliott Wave: The move up is the same as gold’s wave count, the current move down is Wave (iv) then it can’t move into the price territory of one at 2772

Oil WTI: 92.50
TradingLevels: The price is displaying a good example of what normally occurs when the price is move down into group1, that bouncing around each level simply because people think in those numbers, this is why the trading plan needs to be adjusted when in group1, you either trade the bounces at each level or you stay further back and allow the price room to move and edge lower to the 90 the MediumLevel
Elliott Wave: Expecting a corrective bounce of 90

Base Metals 

US Spot Prices (in l/b)
US Copper:           Last: 3.53+
US Nickel:             Last: 7.78+
US Zinc:                Last: 0.86+
US Aluminium       Last: 0.90-

US Copper CFD: 350
There are five small waves off the low 343 to 351 and now the price is moving through the abc, once completed expect another five waves up at minimum to 356. This move up is either and ABC for Wave 4 or the start of a larger impulse wave.
This is going to affect our short trades in the materials sectors, so the choices are lock in all our profits on the open or widen our stops and hope it’s just and ABC correction that will last two more days. I’m not a buyer of hope, so covering my shorts on the open is for me, I will let the daily Robo stops play out in the Robo section, but you must choose and be happy with your choice.
Once 350 becomes support trade long in copper locking in part profit at 355 to get the trade to break even.

Forex Trading 

US Dollar: 81.25
TradingLevels:  The 38.2% retracement level is around 81.00 with support at SG2 zone 80.72
Elliott Wave: Same - Wave (iv) is unfolding back to 81.00 and SG2 8065|8072|8080 As you know wave fours can get a little complicated, so allow plenty of time for the pattern to unwind, it can go as low as wave four of one lesser degree which is the lower end of SG2 8065

EURUSD 1.2775
TradingLevels*: Look for 12772 and 128 as supports for long trades – for the short term
Elliott Wave: The abc is completed across 128 and now expect the price to move higher
Trading Strategies: Scale in long off 12772 support adding off 128 support and scaling in through group1 – 12810|12820|12830 if support is found on top of group1 12830 then the price will move to the Midpoint 12850
*Learn the details behind TradingLevels. Click to »article & videos

AUDUSD 0.9880
TradingLevels: 98 was the target and it’s the first MinorLevel, it is very normal for the price to bounce off mTL8|98 and retest supply at 1.00 TL1
Elliott Wave: The bounce off 98 is not developed enough to make a call on it, meaning the info that we have so far we can call it to 99 as and abc corrective pattern, but we are not seeing an impulse wave as yet (five waves)
Trading Strategies: support on 99, then scale in through Group1 9910|9920|9930 taking part profit at the Midpoint 9950 and the rest at 9972 SG2 and then wait. We need to see if we are going to get a corrective or impulse pattern up as that will dictate what’s next

Index Trading 

Dow Jones CFD 12,480
TradingLevels:  The bounce off the low is not developed as an impulse wave or corrective wave, however the SP500 small bounce is in five waves, so we should get to see another five waves, that’s 5-3-5 structure, this can be an abc corrective pattern or it can develop in a larger impulse wave?  The 12,500 is the first resistance if this becomes support then that’s a stepping stone higher and holding as resistance keeps the bear market is tack 
Elliott Wave: The bounce off the low is not developed as an impulse wave or corrective wave, however the SP500 small bounce is in five waves, so we should get to see another five waves, that’s 5-3-5 structure, this can be an abc corrective pattern or it can develop in a larger impulse wave?
If this is a rally the 38.2% is 12572 SG2 zone
Trading Strategies: Support on 12,500 creates long trades, make sure the price tests 12500, because 12500 as support or resistance creates the next move

S&P500 CFD: 1292
TradingLevels: The 1300 is the MinorLevel, however the historical support is a little further down into the 1250 the midpoint.
Elliott Wave: If it is a wave four rally then the 38.2% is around 1320 
Trading Strategies: The main point to watch is the cash market when it opens and see if it’s going to stick to 1300 or retest 1300 and drop lower which would be in line with the wave count

FTSE 100 CFD: 5340
TradingLevels: The price above 5300 (top of Minor Group1) creates a positive bias, the trade long is off 5300 as support
Elliott Wave: The structure off the low 5220 is developing as an impulse wave, this means after an abc corrective pattern, perhaps into the Midpoint or SG 5372 once the abc is completed there should be another impulse wave higher
Trading Strategies: Long

DAX CFD: 6363
TradingLevels: Positive above 6300. We could have a low in place now and we are seeing an impulse wave up off the low 
Day Trading: The resistance is at 6400 because of the triangle trendline that created wave (iv), if support is found on 6400 trade to 6500 and exit then wait to see if 6500 (ML65) becomes support

Shanghai 2459
TradingLevels: The move down over the last two weeks is in five waves so we can expect a retest rally in three waves, a retest of 2500 then another five waves down

SPI CFD 4100
TradingLevels: It’s only natural to see support come in between 4100 and 4000, this would be wave four, the 38.2% on the cash is 4130, but the futures can move higher the fourth wave of once lesser degree 4172 area
Day Trading:  Long on 4100 as support. The current move up is only in three waves abc 5-3-5 if it develops into five waves then you know there will be another five waves.

Technical Analysis Summary

See Summary above 

Today's Financial Events 

Time         Currency   Detail                                              Forecast    Previous
1:00pm     NZD            Inflation Expectations q/q                2.5%   
6:30pm     GBP            CPI y/y                                            3.1%            3.5%   
6:30pm     GBP            Public Sector Net Borrowing           -5.4B           15.9B   
6:30pm     GBP            RPI y/y                                            3.5%            3.6%   
6:30pm     GBP            Core CPI y/y                                   2.2%            2.5%   
6:30pm     GBP            HPI y/y                                            0.5%            0.3%   
Tentative  GBP            BOE Inflation Letter       
8:15pm     USD            FOMC Member Lockhart Speaks       
12:00am   EUR            Consumer Confidence                   -20 -20   
12:00am   USD            Existing Home Sales                       4.64M         4.48M   
12:00am   USD            Richmond Manufacturing Index     12 14

NOTES: Prices may change as this Technical Analysis report is written from 3.30 - 6.30AM
Always think things out for yourself, we are only here to bounce ideas around.

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02  INTERNATIONAL COMMODITY: GOLD – Latest Elliott Wave Analysis

GOLD 1 Hour Chart
Friday, 18 May 2012 at 7:05:00PM AEST

Gold reached levels around 1580 that we highlighted yesterday, and now even extending higher. Rise is clearly impulsive after base channel break seen yesterday. Well, based on the latest sub-structure we suspect that market is now in final stages of wave (iii) with wave (iv) pull-back to come in the near-future. High for third is expected in 1590-1600 zone.



Gold 4 Hour Chart
Friday, 18 May 2012 at 6:00:00PM AEST – temporary recovery

Gold is recovering quite nicely from our fifth wave low, which in fact could be an impulse. Market did not move below 1522 mark, so wave E bounce is expected on a daily. 



GOLD Daily Chart
Sunday, 13 May 2012 – support is near

Gold extended lower in the past few weeks, which were our expectations after we recognized a nice clear running triangle placed in wave B). we know that triangles occur prior to the final leg of the larger patter. So if thats true, then wave C) will find the low in coming days, and definitely somewhere above 1522. We expect a bounce, minimum in three waves if we also consider an alternate count!

 

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