Technical Analysis Report Weekly
 

01  Today's EarlyBird Technical Analysis Report 20 December 2011» 
02  International Commodities: OIL – Latest Elliott Wave »
03  Thankyou!»

Hi Traders 

THE ROBO DAY TRADING STRATEGY IS A SIMPLE MECHCANICAL TRADING METHOD

We have to continue to trade small ranges with small position sizes until the market develops a clear direction. As you know there are two possible wave counts for the US markets and their pivots are 11772 for the Dow, and 1200 for the SP500. The Asian region appears weaker in line with commodities; we should see support on the 4000 for the ASX200 and a possible bounce. The only lead I can see is from US Treasuries yields to the downside and stocks should fall in line with this and this makes sense as the primary focus is the bond market. But we cannot simply forget about the wave count we have on the SP500. 

There is nothing we can do at the moment that I can see to cement a direction in the medium term, it is safer to use the daily Robo. Its a reasonable way to manage risk and let the market trade for you. There are stocks going up and stocks going down, but it doesn’t really matter as long as you set the orders up in front of the market and let the market trade for you.

Break
We are having a break until January 9 so our next free newsletter will be up on 10 January. If you feel like some "me" time over the break to catch up on your trading knowledge, check out our education, watch some videos then wait for the new year to put it all into practice! 

We look forward to seeing you again then!  Rgds, Pete.
PS. Call anytime: 0434 288 367 or 02 4448 6020.
or email me

01  Today's EarlyBird Technical Analysis Report – 20 December

Market Drivers

Dow Jones 11,768 -0.88% 
Base Metals Negative
US Gold CFD: 1598
Oil WTI CFD: 93.80
Copper CFD: 330
US Dollar CFD: 80.66
EURUSD 1.3010
AUDUSD 0.9910
Dow Jones CFD 11880
S&P500 CFD: 1212
FTSE 100 CFD: 5358
SPI CFD 4080

News
NEW YORK - (Dow Jones) - US stocks fell Monday after European Central Bank President Mario Draghi made cautious comments on the state of Europe's economy and as bank stocks sagged in expectation of tighter capital standards.

CFD Commodities 

US Gold CFD: 1598
The current move up is still considered a Wave (iv) rally while the Fibo 38.2% retracement level is around the 1630.
became the resistance then the Wave (iv) is likely completed and Wave (v) down is under way.
I will go over the possible smaller wave counts in the video, such as the 1600 holding as resistance.

Silver  The retest from 28.00 up, close to 30.00, can just be the Wave a of an abc correction or, that this retest can be completed. Wave four corrections can be complicated sideways patterns. From a trading point of view, there is the safe way and the more proactive way and that would be layering in short positions close to 30.00 and then adding as 29.00 becomes the resistance, then 28.00.However you would need to be clear on the management by either keeping the stops above 30.00 (31.37) or working much closer to the corrective pattern. So, tthere is no correct way, only your way and the risk you accept.

Oil WTI CFD: 93.80
Oil, copper and gold have much the same wave count, a Wave four correctional rally that should be short lived. 38.2% is around 96.00.
The other aspect is that oil is working the Midpoint 95.00. It’s starting the series of retests from the support of Minor Group1 93.00, while the battle at 95.00 should eventually fail and the price test lower into 90.00 or at least deeper into MG1. If over the sessions ahead the 95.00 finds support then the short term's bias is bullish, however we monitor the 95/96 as the resistance delivered by wave four.

Base Metals 

US Spot Prices (in l/b)
US Copper:           Last: 3.27-
US Nickel:             Last: 8.24-
US Zinc:                Last: 0.83-
US Aluminium       Last: 0.87-

Copper CFD: 330
The wave four rally in copper started before gold and oil, so we can use this as a lead.
The current high around 337 can be the high of the rally or it can be just the first leg that’s the problem with wave fours, things like triangles occur in wave fours, the main point is that its corrective and should at most move sideways.
The TradingLevels, the price has found support on Group1 {330|320|310}, only when the price is locked under the pivot 320 can the price be pulled down under 300 TL3.  We did understand that the price would struggle and bounce around Group1, so we know what is happening here, the pattern is corrective wave four in Group1, so we aren’t going to see a trend, we are seeing and continue to see supports and choppy price action. The advantage here is the pattern lead over other commodities.
Support on 330 the top of Group1 is support.

Forex 

There’s not much movement in currencies or Indices. 

US Dollar CFD: 80.66
The Dollar is basically going to stick to 80 TL8 and for a solid trend up would come from a support off the 80, it is very early days yet, the price is still working through the first high above the level TL8. Drilling down into the first high above the level, the price should make another high above the last high then fold down to 80. If you are going to trade it long then you would have to wait for 81.00 to develop as support with stops under the SG2 {80.65|80.72|80.80} without this support the price has bias to fold back to 80 from under the 81.00. You should also consider working longs through SG1 in the right way, that is scaling in through SG1, this way the market is proving itself, sure it’s less profitable but its more profitable over the long run because you have control the exposure 

EURUSD 1.3010
TradingLevels: The corrective pattern on 130 is still going and it’s not tradable while its in SG1 of 130, if it finds support on 1330 then trade long  to 131 area or if the 130 becomes resistance then the corrective pattern is completed and the next move down is under way and the 1.280 and 1.2772 is the important price point 
Elliott Wave: The Same - Wave (iv) is unfolding at 130 and potentially can move higher to 131, but it is corrective and once completed move down for wave five (v) of 3
Trading Strategies: Support on 1330 trade long. 1.30 as retested resistance trade short

AUDUSD 0.9910
TradingLevels: Resistance 1.00 Support 98.00 The retesting pattern is much the same as the Euro and Commodities basically a small wave four, the question is, is it completed. It can be but it can also only be the first leg of three legs/ swings, if it is three swings its not going very far from the 1.00 and if it is completed then expect a move to 98 and to trade that would need to see 99 as resistance…
Elliott Wave: short term, expect a bounce off 99 in three waves then down through 99 
Trading Strategy:  Continue to scalp through the sublevels while around 1.00 
Announcement: 11:30am AUD Monetary Policy Meeting Minutes      

Indices 

Dow Jones CFD 11880
Technical Analysis
TradingLevels: The trend is down until proven otherwise, yes there is support on 11,800/11,772 SG2 for the Dow and 1,200 for the SP500 and 4000 for the ASX and the Dollar will stick to 80, so it is a juncture to be careful of a reversal to the upside as we have a wave count to match, as you can see on our SP500 charts. 
However there is the case for a large move down from here as I have been talking about in the EarlyBird section and the US Treasuries support this downside in fact they are leading the way down the yields are very weak (when Stocks are Down Yields are Down and Dollar is Up and vice versa) or you can use the TLT; When stocks are up, yields are up, TLT is down and dollar is down; and vice-versa! iShares Barclays 20+ Year Treasury Bond Fund (the Fund) seeks investment results that correspond generally to the price and yield performance of the Barclays Capital U.S. 20+ Year Treasury Bond Index (the Index). The Index measures the performance of public obligations of the United States Treasury that have a remaining maturity of 20 or more years. 
Elliott Wave: The bearish count requires 11,800 as the resistance after it finishes bouncing, the SP500 needs 1,200 as resistance, this will take time 
Trading Strategy:  Long above 11,772 and short below, wait for these price point to be tested before committing

S&P500 CFD: 1212
TradingLevels: 1,200 support, also the 61.8% retracement support and we are seeing support above 1,200 within SG1 {1230|1220|1210} As you know we have a wave count for the upside off the 61.8% 1,200 so while the price is above 1,200 we have to seriously consider the prospect of a rally.  If and when the 1,200 becomes resistance then we can look at a larger bearish picture. It’s not that we are going to miss anything, our main job is not to lose money while the structure develops a direction
Wave count: Working two structures one bullish and one bearish, one of them will become clear for the main trend, but in the meantime the smaller trend is down so short term bias is down.
Trading Strategies: bring stops down to 1227

FTSE 100 CFD: 5358
TradingLevels: As the 1,200 is the support for the SP500 the 5300 top of Minor Group1 is the support for the FSTE.
Elliott Wave: The pattern is the same as the Sp500 and Dow etc. the bias is down. 
Day Trading Strategies: Just trade between the sublevels as the price is moving closer to support at 5300.

SPI CFD 4080
Technical Analysis
TradingLevels: If 4100 becomes the resistance then the price would work lower to 4000 where it would likely bounce up in three waves.
Elliott Wave: The pattern on 4000 over the Oct Nov period is open for interpretation, however it is forming a triangle pattern and that means when its completed a move down will occur. So what does completed look like, well a triangle in Elliott theory is five swings abcde and so far we have the abcd the current low can be the wave d, so eventually we would see a wave e up, how far would the wave e go, the 4200 is the pivot within Minor Group1 so I could see it finding support on 4200 based off the current low the 61.8% would be the 4200.
Day Trading Strategies: Move stops down to last high above 4100 after the second retest of 4100. New trades need to work SG2 (4080|4072|4065) then the Midpoint, there is a daily trend line cutting through the 4030 – 4050 are double check this. Essentially one the market opens and settle being on the right side of 4072 is the starting line.

Summary

We have to continue to trade small ranges with small position sizes until the market develops a clear direction. As you know there are two possible wave counts for the US markets and their pivots are 11772 for the Dow, and 1200 for the SP500. The Asian region appears weaker in line with commodities; we should see support on the 4000 for the ASX200 and a possible bounce. The only lead I can see is from US Treasuries yields to the downside and stocks should fall in line with this and this makes sense as the primary focus is the bond market. But we cannot simply forget about the wave count we have on the SP500. 

There is nothing we can do at the moment that I can see to cement a direction in the medium term, it is safer to use the daily Robo. Its a reasonable way to manage risk and let the market trade for you. There are stocks going up and stocks going down, but it doesn’t really matter as long as you set the orders up in front of the market and let the market trade for you. The Robo has a high probability to get you into profit from the entry, so if you take 30% profit by 11.00AM then you have a free trade, then continue as normal with the trade using the Robo, levels and volume.

Trading Quote

"I'm always thinking about losing money as opposed to making money. Don't focus on making money, focus on protecting what you have"

Today's Financial Events 

Time       Currency   Detail                                   Forecast     Previous

10:00am    AUD        CB Leading Index m/m                     0.1%   
11:01am    GBP        GfK Consumer Confidence                  -30 -31   
Tentative  GBP        Nationwide Consumer Confidence           34           36   
11:30am    AUD        Monetary Policy Meeting Minutes       
3:30pm     JPY        All Industries Activity m/m              1.2%         -0.9%   
6:00pm     CHF        Trade Balance                            2.47B        2.15B   
6:00pm     EUR        German PPI m/m    0.1% 0.2%   
6:00pm     EUR        GfK German Consumer Climate              5.5          5.6   
8:00pm     EUR        German Ifo Business Climate              106.2        106.6   
10:00pm    GBP        CBI Realized Sales                       -15           -19   
11:00pm    CAD        Core CPI m/m                             0.2%         0.3%   
11:00pm    CAD        CPI m/m                                  0.3%         0.2%   
12:30am    USD        Building Permits                         0.63M        0.64M   
12:30am    USD        Housing Starts                           0.64M        0.63M

Want to follow our EarlyBird plus our Trades, trading Strategies and Education?  
»BUY A 1MONTH TRIAL HERE

»TOP
...........................................................................................................................................................

02 International Commodities: OIL – Latest Elliott Wave

OIL Intraday Chart
Monday, 19 December 2011 at 6:40:00PM EDT

Despite a new lows on oil in recent sessions, we still thnik that an impulsive fall from above $101 is near completion. The reason is five waves down, which suggests an impulsive reversal. Then we have a decreasing momentum in wave (v), plus an ending diagonal which is a reversal pattern. But its only the price which can confirm our outlook, so keep an eye on potential 94.20 break for confirmation!



OIL 4 Hour Chart
Monday, 19 December 2011 at 6:55:00PM EDT - impulse lower

Oil fell lower in the past few trading days and as we look on the 4h price action, we see signs of an impulsive bearish structure from 102.45 top. Notice that prices extended lower after breaking through the lower support line of a base channel (circled area), which we know that usually occurs in wave three situation of an impulsive count. As such, we suspect that near-term bounce higher will be corrective wave 4, which will look for resistance around 95 area.

OIL Daily Chart
19 December 2011 - wave (2) near completion

Finally, oil prices are showing some signs of a resistance from above $100 per barrel, after a fall below $95 area in the past week. This now could be an early stage of a coming weakness back to 2011 lows. But we however still need more aggressive sell, and type of a price action that will fit into the impulsive structure. For now, still only three waves from a peak with price trapped between parallel lines.

OIL Weekly Chart
11 December 2011 - downtrend in progress

Oil reversed perfectly lower in the past few months from 115 resistance region, where we believe that wave B) found a top since prices collapsed through the lower support line of a corrective channel. As such, wave C) is underway, with prices headed towards the levels seen at the start of 2009. Currently, we are monitoring a corrective rally which should stop at the channel trend-line; support becomes resistance at current levels!

Want to follow more of our Forex PLUS Gold/Oil/S&P500? 
We have Intraday, 4Hourly, Daily and Weekly charts posted for Forex 6prs, Gold, Oil & S&P500
»LOGIN   »REGISTER   »BUY A 1MONTH TRIAL HERE

»TOP
...........................................................................................................................................................

03 We say thanks for your interest this year! 

We'll happily add 2 weeks to our normal 1 Month if you want to do some extra trading education over the break!

We'll do the coaching after 9 January 2012!

BUY 30 days Membership, $19.95 and GET:

– Trades: ASX CFD trades with Entry & Stop, online every day
– Technical Analysis : understand how we get to our decisions and learn more for your own analysis
– Lots of education (includes online CFD Trading courses),
– CFD accounting software, ProfitKeeper® Pro
– TradingLevels Charting Software (has TradingLevels on every chart)
»LOGIN   »REGISTER   »BUY A 1MONTH TRIAL HERE

»TOP
...........................................................................................................................................................