29 November
Technical Analysis Report Weekly
WE CAN STILL DAY TRADE AND SCALP ON THE LONG SIDE!
While the Dow Jones is above the MediumLevel 11,500 (ML15) then the market is considered positive. The SP500 hasn’t developed support on its closest largest number 1200, so we can expect the Dow and the SP500 to be flickering around these prices for the time being. The internal wave structures for the Indices are shortening, indicating a slowing down process but they are still moving higher. They may cover their gaps from the 21 November, but either way we should just observe to see: is there is going to be another surge in price and volume in this uptrend or will it run out of stream and roll over back into the main trend down? I certainly don’t mind trading long if need be but I would require evidence of a bullish trend and a price point to work from and the closest thing we have to that is the Dow above 11500, but it hasn’t developed enough real support to work a trade, so it’s better to stand aside.
That said we can still day trade and scalp on the long side, but don’t get greedy, just trade to the next largest number and exit, don’t get stopped out.
See our results down the page, Pete.
PS. Call anytime: 0434 288 367 or 02 4448 6020.
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01 Today's EarlyBird Techncial Analysis Report – 29 November
Technical Market Drivers
Dow Jones Index -11,525 +2.62%%
Base Metals: Positive
US Gold CFD: 1714
Oil WTI CFD: 98.00
Copper CFD: 336
US Dollar CFD: 79.00
EURUSD 1.3330
AUDUSD 97.10
Dow Jones CFD 11,540
S&P500 CFD: 1190
FTSE 100 CFD: 5300
SPI CFD 4100
US News Wire
NEW YORK – (Dow Jones) – U.S. stocks rose amid investor optimism that euro-zone leaders were nearing a deeper pact to stem Europe's sovereign-debt crisis. A strong start to the holiday shopping season also helped boost the retail sector.
The Dow Jones Industrial Average jumped 282 points, or 2.5%, to 11514 in mid-afternoon trade and was poised to snap a four-day losing streak. All 30 blue-chip components were in the black. The rally followed a 26-point loss on Friday and a swoon of 4.8% for the week, marking the worst Thanksgiving-week performance since markets began closing in observance of the holiday in 1942.
The Standard & Poor's 500-stock index climbed 36 points, or 3.1%, to 1195, as all but five of the broad index's components rose. Materials and energy stocks posted the largest rise, leaping more than 3.5%. The technology-oriented Nasdaq Composite rallied 87 points, or 3.6%, to 2528.
European markets finished with a broad rally. The Stoxx Europe 600 soared 3.8%, after news that euro-zone leaders were negotiating a new pact to contain the sovereign-debt crisis. A new agreement, including measures to curb excessive debt by making budget discipline legally binding, could persuade the European Central Bank to take more action to halt the selloff in debt markets.
Investor sentiment was also boosted after a report indicated the International Monetary Fund could provide between EUR400 billion ($529.6 billion) and EUR600 billion in financial assistance to Italy, though the IMF denied that it is in bailout talks with the heavily indebted country.
US Gold CFD 1714
The The 1720 target for Wave c of iv rally is falling into place, there is still more upside for the US Indices so we could see a move to 1733 which is wave iv of once lesser degree.
Also Wave c will be made up of five smaller waves and I reckon the 1720 is the top of the wave three, so there is wave four and five to go, either way let’s just let this play out.
Oil WTI CFD: 98.00
The resistance at the 61.8% which is also the 100 (TL1) has held nicely, the move from 95 to 100 is in a nice clear five waves as the Wave c of (ii).
The 98 is the first MinorLevel down as support which we should see a bounce from, after the bounce we should see the price move down through 98 in due course, apart from the wave count the price would have to be under 95 as resistance for a bearish signal from a tradinglevels point of view, above 95 and the price is still part of the 100 storey
Base Metals
US Spot Prices (24HR in l/b)
US Copper: Last: 3.38+
US Nickel: Last: 7.82+
US Zinc: Last: 0.88+
US Aluminium Last: 0.89+
Copper CFD 336
The 320 and 330 as Minor Group1 (MG1) offer support for copper, if and when the 320 is taken out, then the larger degree of pattern becomes bearish, but we wouldn’t turn bullish unless 350 became support, so like the moves up across the general market we should just be patient and wait for the market to tell us what to do and not get trapped in the unknown space. The move up off the 320 does appear to be an abc corrective rally to 340 that is complete and should therefore work lower, but let’s see in case it develops into an impulse wave (five waves).
Forex
US Dollar CFD: 79.006
The first reaction at 80 (TL8) MajorLevel as expected with the Euro and global Indices moving up, we expect this reaction to be short lived and expect the dollar above 80 in due course. I know the trend is up for the dollar, but what I don’t know is the pattern that will occur at 80, there two basic patterns the Overshoot and the Classic these two pattern are explained in the tradinglevels fast track course on the website. We will of course be monitoring all markets for any unusual moves and the only unusual or rather tad extreme move has been in the US Bond/Yields TLT with a sharp drop, so we will keep an eye on this, but the rally in the US Indices is fine and expected, most indices will try and cover their gaps left by the futures markets the SP500 around the 1212 but I think they will fail, we just have to monitor all markets while they go through this, but the Euro is showing the first weakness as the leader.
EURUSD 1.3330
TradingLevels: 133 is the top of Group1 support here offers further upside, this however is not in line with the wave count, however it cannot be forgotten, having the wave count and the levels on side is helpful. It is the 132 as resistance that will pull the price to 130, so even if the price bounces off 133 to SG2 or the midpoint then moves down under 133 the larger bearish picture is not until the 132 is resistance.
Elliott Wave: From the last Euro chart the 134 target as wave (ii) is now in place, we would like to see the price work below 133, but expect a bounce off the 133 first, look for weakness into the 13350 Midpoint. The move down from the 134 appears to be in five waves so a abc counter trend from the 133, the 61.8% is close to the SG2, best try and work out the abc zigzag 5-3-5 rally to work out the price point target as it can be any retracement level, it better to follow the wave count as it unfolds
Trading Strategy: While the Euro is in a rally, it’s wise to also consider the Dollar and the SP500/Dow, the Dollar is not much use really while it’s about to vibrate around the 80, but the Dow could be handy, while the Dow is above 11,500 you don’t want to be shorting the Euro. At this stage, If the Euro finds 13272 as the resistance then short. If the 13372 finds support then the Euro is going higher, I know these are wide numbers, but it boils down to the rally of 133 being corrective or impulsive
AUDUSD 97.10
TradingLevels: If 1.00 develops support then this is a bullish picture, the wave counts suggests a rally to 1.00 then down again, but we have to trade off support and resistance.
Elliott Wave: Despite a quite strong recovery in the past sessions, we still believe that larger trend is down on Aud/Usd, and that downtrend will resume in the coming sessions. In fact, we have only 3-waves up and also gap that needs to be filled. As such, we expect that current wave 4 will find resistance in the near-future, which must not rise above 1.0055 critical/invalidation region
Trading Strategy: A little like the Euro’s move down, the move down here from the SG2 9972 to 99 is in five waves, so a abc counter trend bounce off 99 then down again through the 99, how far will the bounce be is tricky to say, however there is resistance at 9920 and 9950 Midpoint, you know if the price finds support on top of group1 9930 then the price will end up at the Midpoint
Indices Technical Analysis
Dow Jones CFD 11,540
TradingLevels: Okay, the rally is here, corrections are the trickiest part of Elliott Wave they are the weak spot, Elliott unfortunately only developed three rules when using his method, the Impulse wave is straight forwards, corrections, can be simple or complicated, we can also use the tradinglevels to sort out the basic of being long or short, so while the price is above 11500 the MediumLevel the market has to be treated as bullish, if the price finds 11500 as resistance we are bearish, it’s that simple.
Elliott Wave: Wave counts and targets, most futures markets created a Gap on the 21 Nov and these Gaps would be target points, they are however quite high, we can’t say if they will be covered or not, all we knew is that there would be a rally and this current move up could also be the first leg of three swings, we just don’t know yet. The move up was swift and is now running out of steam
Trading Strategy: Let’s just keep it simple, let’s just give the price time at 11,500 to develop either a stronger support or find itself as the resistance. there is the case for the current high to be the top now, this is from one internal wave count, but I don’t want to call a top without evidence of downside structure, the levels and volume, it better to see the current price searching for support on 11500, the internal volume supports this view, the next level up is the 11650
S&P500 CFD: 1190
TradingLevels: Gap target 1212, current resistance mTL2 | 1200 support SG2 1172 zone
Wave count: abc rally wave four, the 38.2% retracement level is close to 1200
Trading Strategy: Apart from scalping, when the 1172 becomes the resistance then short. If the price finds support on 1200 trade to 1215
FTSE 100 CFD: 5300
TradingLevels: Target Gap 5343
Elliott Wave: The move up has created a Gap lower down at 5172 area, so we can assume the price will move back down in due course to cover this, the current move up look at 5372 as a probable target, but I’m just guessing, it’s more important to observe the Dow at the 11500 and this may take time.
Trading Strategy: The move up is running out of stream, the ranges are getting shorter
SPI CFD 4100
TradingLevels: The 4100 as support or resistance is the play, expect a small corrective pattern here, If and when the top of subgroup1 4130 develops as support then you can add to longs, with the target at 4150
Elliott Wave: The 38.2% at 4100 is the wave four retracement level, on the cash it’s around the 4120
Trading Strategy: While the Dow is supported on 11500 the bias is long, but don’t over trade as the larger wave count is corrective, its best to have the levels and the wave count saying the same thing
Summary
The expected corrective rallies are underway and we simply have to observe to see what strength they have and at what Levels they can develop their supports to work from.
While the Dow Jones is above the MediumLevel 11,500 (ML15) then the market is considered positive. The SP500 hasn’t developed support on its closest largest number 1200, so we can expect the Dow and the SP500 to be flickering around these prices for the time being. The internal wave structures for the Indices are shortening, indicating a slowing down process but they are still moving higher. They may cover their gaps from the 21 November, but either way we should just observe to see: is there is going to be another surge in price and volume in this uptrend or will it run out of stream and roll over back into the main trend down? I certainly don’t mind trading long if need be but I would require evidence of a bullish trend and a price point to work from and the closest thing we have to that is the Dow above 11500, but it hasn’t developed enough real support to work a trade, so it’s better to stand aside.
That said we can still day trade and scalp on the long side, but don’t get greedy, just trade to the next largest number and exit, don’t get stopped out.
Quotes for Traders
“History repeats itself, first as tragedy, second as farce". Karl Marx
Today's Financial Events
Time Currency Detail Forecast Previous
10:30am JPY Household Spending y/y -1.4% -1.9%
10:30am JPY Unemployment Rate 4.2% 4.1%
10:50am JPY Retail Sales y/y 0.8% -1.1%
Tentative AUD HIA New Home Sales m/m -3.5%
6:00pm CHF UBS Consumption Indicator 0.84
6:00pm GBP Nationwide HPI m/m -0.1% 0.4%
8:30pm GBP Net Lending to Individuals m/m 1.0B 1.0B
8:30pm GBP M4 Money Supply m/m -0.2% -0.4%
8:30pm GBP Mortgage Approvals 52K 51K
11:00pm GBP Autumn Forecast Statement
12:30am CAD Current Account -11.3B -15.3B
1:00am USD S&P/CS Composite-20 HPI y/y -3.0% -3.8%
2:00am USD CB Consumer Confidence 43.8 39.8
2:00am USD OFHEO HPI m/m 0.1% -0.1%
3:30am USD FOMC Member Yellen Speaks
4:15am USD FOMC Member Raskin Speaks
Tentative USD Treasury Currency Report
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.
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02 Forex: AUDUSD – latest directional research
AUDUSD 1 Hour Chart
Monday, 28 November 2011 at 7:20:00PM AEST
Despite a quite strong recovery in the past sessions, we still believe that larger trend is down on Aud/Usd, and that downtrend will resume in the coming sessions. In fact, we have only 3-waves up and also gap that needs to be filled. As such, we expect that current wave 4 will find resistance in the near-future, which must not rise above 1.0055 critical/invalidation region!
AUDUSD 4 Hour Chart
Monday, 28 November 2011 at 5:55:00PM AEST - wave 3) underway
After a sharp fall in the past week, we see possibilities for even lower levels in the week ahead. As such, we are now looking at the bearish but still incomplete impulsive fall in wave 3), which may extend losses in this week towards 0.95, while 1.0055 critical region holds. Currently we are monitoring base channel support line that will now tend to react as a resistance in wave 4!
If we get an overlap with this level (wave 1 low on the chart), only then alternate count may become the primary one!
AUDUSD Daily Chart
27 November 2011 - more downside in wave (C) of IV
Australian dollar was one of the weakest in the past week, when stock and commodity markets were falling. Well, we still do not see any signs of a wave (C) low, so we expect further weakness in the coming week, ideally towards and below 0.9390 swing low, while market trades below 1.0050 area. Only break of that resistance may signal for a change in trend!
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