Technical Analysis Report Weekly
 

01  Today's DayAhead Technical Analysis Report 7 February 2012» 
02  FOREX: AUDUSD – Latest Elliott Wave»
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01  Today's DayAhead/EarlyBird Technical Analysis Report – 7 February

Market Drivers

Dow Jones 12,819 -0.33%
Base Metals Mixed
US Gold CFD: 1721
Oil WTI: 97.00
Copper CFD: 386
US Dollar: 79.13
EURUSD 1.3130
AUDUSD 1.0720
Dow Jones CFD 12,810
S&P500 CFD: 1340
FTSE 100 CFD: 5888
SPI CFD 4300

News
NEW YORK (Dow Jones) – US stocks drifted lower midday Monday, giving pause to the recent rally, as investors shifted their focus to wrangling in Greece over fiscal austerity.

CFD Commodities 

US Gold CFD: 1721
Technical Analysis: The 1720 (72) is playing out as support, however the little move up from 1710 to 1720 appears more corrective than impulsive, so only use the 1730 the top of Subgroup1 for longs otherwise you can get trapped, as in reality the price action is displaying downside not upside in the structure. Long trades would need to see fives sub waves up and it’s not there. 
Elliott Wave: Last time we were talking about either three waves down or five waves down, well now we have three completed waves down a 5-3-5 structure, meaning fives waves, then three waves then another fives, this structure can be and Elliott Zigzag abc bullish correction, if it’s a abc correction then it now must move up from here 1710+.
The three wave down can turn into five waves down (impulse) if this is the case then, if we do get these larger five waves, then we will see a three wave counter trend abc then another five waves down taking the price back into the MediumLevel 1650 support.
Catalyst, we have the Greek situation reconciling the 130 Billion that can support gold on this current 1700 low.

Silver: Support 32.72 / 33.00 is playing out now.
Elliott Wave: The first swing down has occurred, it’s appears to be in three waves (abc) but let’s just observe the structure that comes from the 33.00 bounce over the next session, this will also give us time to observe gold, the Copper/ base metals appear positive. *See Elliott Wave education

Oil WTI: 97.00
Technical Analysis
TradingLevels: 98.00 is the MinorLevel resistance and you can’t scale in long or exit shorts until this becomes support.
Elliott Wave: The retest of (mTL8)* 98.00 is in three wave i.e. corrective so more down side would be the bet, a  testing deeper into 95.00 the next MinorLevel. The corrective pattern under 98 can move sideways, Triangle (five internal waves of three waves each). *See TradingLevels article

Base Metals 

US Spot Prices (in l/b)
US Copper:           Last: 3.86-
US Nickel:             Last: 9.71+
US Zinc:                Last: 0.96-
US Aluminium       Last: 0.98-

Copper CFD: 378
Technical Analysis
The price is still working through Subgroup2 (SG2) 365|372|380 it is trying to develop the 380 as support and the resistance pressure is coming from the larger MediumLevel 400, so we are looking at a wave four being squashed between 400 and 372, wave fours are normally complicated structures such as triangles double and triple zigzags, we should expect something like these simply because the last move up (wave three) also requires re balancing.
As mentioned copper is in a corrective phase when it first arrive in SG2 and we understood it would slowly edge higher within its corrective pattern and even when it does meet 400 we can expect a larger correction at the larger number 400, yes we will see a high above the ML4 but also a larger correction and this will affect other base metals and Material sectors around the world, but this is enough to act as support and some lift for resources rather than a negative affect

Forex 

USD is trading higher after a gap lower on Euro and S&P Futures seen at the open. Commodity currencies are also looking weak after lower metals, with gold down more $40 from Friday highs. Looks like we could see more USD strength in this week, but only within larger corrective pull-backs, which are part of a bullish trend on majors.

Forex US Dollar   79.13
Technical Analysis
Time is running out for Greek to meet bailout conditions and this is supporting the Dollar above 79, the moves above 79 are seen as part of a larger corrective pattern

Forex EURUSD  1.3130
TradingLevels: Resistance 13172 SG2 and 13150, support 13072 SG2
Elliott Wave: We are expecting the SP500 to correct down further, so this can influence the Euro to at least retest the 13072 support level if not lower, yes there is psychological support at 131
Trading Strategies: Trade support and resistance using the sublevels, the price is now moving into supply area starting at the 13150 to 13172.
If support is found on top of subgroup1 13130 then trade to 13150 and exit. Try and count the five waves up from the last low 13018 on a 2 minute chart 

AUDUSD 1.0720
TradingLevels: The old highs and the 10772 and 108 are the expected resistances that will see an abc correction
Elliott Wave: The abc correction is starting under the 108 The Wave A is completed down and the Wave b is under way to the upside once completed a Wave C down perhaps to the 10650 - 10630? Look for a long trade set up around these levels
Trading Strategies: It’s the RBA rate day today, its normally a buy the rumour sell the fact, whatever you do you have to be fast and you should use stops and set entries, know your risk and set the orders up in front the market. If you unsure don’t trade, giving control away is not the done thing in trading.

Indices

Dow Jones CFD  12,810
Technical Analysis
TradingLevels: The number 8 is a profit taking number and 12,800 should see a correction
Elliott Wave: Expect an ABC correction across 12,800
Trading Strategies: If you can trade an abc correction down then fine, stops would be above 12837 last high.

S&P500 CFD: 1340
TradingLevels*: Three swings across 1340
Elliott Wave: ABC correction at 1340 the A and B seem competed so a Wave C down to 1333?
Trading Strategies: Wait for trade Wave C (five waves) down to around the 1330

FTSE 100 CFD  5888
TradingLevels: The ABC correction across 5900 is now entering Wave c down in five small waves to 5850?
Elliott Wave: ABC at 5900
Trading Strategies: Stops above 5900 is your trading the counter trend (a bit dangerous)

DAX CFD: 6760
Technical Levels: Support on 6772 would see the price at 6800
Elliott Wave:  Wave four
Day Trading: The wave corrective pattern is still unfolding 

SPI CFD 4300
Technical Analysis
TradingLevels: The 4300 has been a strong resistance and it still is, the price is doing its best to edge higher but it’s a struggle as you can see. The SG2 is become more significant as support mainly the 4272 while this is in place the sublevel degree of the structure up is supported and as long as the Shanghai edges higher then that will show up here
Elliott Wave:  There are a few counts, but its best just to focus on 4272 and 4300 as supports
Day Trading: RBA Rate Day. Tues is a profit taking day at least in the morning session. Expect the price to flicker above and below 4300.

Summary

US Indices Dow is correcting into 12,800

Europe Looking at a Short term top

China  Shanghai edges higher in its trend, not a good looking structure, the impulsive moves up are getting shorter in length this is a sign of weakness, but as mentioned earlier it’s all about the 2300 developing support and this aspect is still in progress we cannot call it support as yet. The base metals are also a supporting factor for the ASX

Australia The ASX is still struggling to develop support on the 4300, this may not come until Friday and Monday as Tuesday is profit taking and Wed is the V shape day and Thursday the bear day if we are indeed in a bullish trend, but I see the Dow Correcting at 12800 and the ASX Driver the Shanghai not really displaying solid impulse waves up it is struggling to at 2300 if not it will. So do not over trade on the long side onf the market, sure be long generally but don’t overdo it until the Shanghai has support on 2300 (mTL3) and the ASX200 on 4300 (mTL3) both tops of Minor Group1, if the market doesn’t deliver this then the retests are failing here. It is the Greek politicians 130 Billion that have to agree on the conditions of the bailout loan and time is running out.

The RBA Rate day today.

Trading Quote

"Don’t let profits turn into losses, this much you can control."

Today's Financial Events

Time          Currency   Detail                                                  Forecast    Previous
8:00am       NZD           Labor Cost Index q/q                          0.5%           0.5% 
9:30am       AUD           AIG Construction Index                       41.0 
11:01am     GBP           BRC Retail Sales Monitor y/y             2.2% 
2:30pm       AUD           Cash Rate                                          4.00%         4.25% 
2:30pm      AUD            RBA Rate Statement     
4:00pm      JPY             Leading Indicators                              93.9%        93.2% 
7th-10th     EUR            German WPI m/m                              0.0% 
6:45pm      EUR            French Trade Balance                        -5.2B         -4.4B 
10:00pm    EUR           German Industrial Production m/m    -0.1%          -0.6% 
12:05am    CAD           Gov Council Member Macklem Speaks     
12:30am    CAD           Building Permits m/m                          0.8%          -3.6% 
2:00am      USD           Fed Chairman Bernanke Testifies     
2:00am      USD           IBD/TIPP Economic Optimism            48.3            47.5 
7:00am      USD            Consumer Credit m/m                        7.7B           20.4B

Australian Corporate Calendar
 
National Australia Bank                   Q1 2012 Trading statement (NAB.AU)
Cochlear Ltd (COH.AU)                   Interim 2012 Analyst meeting
Navitas Ltd (NVT.AU)*                      Interim 2012 Ex-dividend date
Bradken (BKN.AU)                           Interim 2012 Results
Cochlear Ltd (COH.AU)                    Interim 2012 Results
Mount Gibson Iron (MGX.AU)           Interim 2012 Results
Transurban Group Ltd (TCL.AU)      Interim 2012 Results

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 FOREX: AUDUSD – Latest Elliott Wave

AUDUSD 4 Hour Chart
Tuesday, 7 February 2012 at 3:05:00AM AEST

Aussie reversed impulsively down to 1.0680 today and so far, bounced only in three waves, which appears to be wave (b); part of a corrective downside price action. We expect weakness within wave (c) in coming sessions, but test of 1.0760 gap area still possible before going lower.

As you know, we are not contra-trend traders, so we will avoid this one for now, even if looks bearish with head and shoulders pattern as well.

AUDUSD 4 Hour Chart
Monday, 6 February 2012 at 5:35:00PM AEST– – sideways

Aussie once again moved higher, tested the upper channel line and reversed lower. As such we decided to adjust the wave count into something more simple, so we came out with an extended wave 3), which could be done now, after minor five waves up in wave 5. As such, we need to be aware of a deeper pull-back in wave 4), ideally down to lower support line of an Elliott Wave channel, before larger uptrend continues.

AUDUSD Daily Chart
05 February 2012 – sideways or acceleration!?

No change!
Aussie is back at the highs, and again testing the upper channel resistance line, where we still want to see a decisive break that will confirm a bullish view for the pair. We know that in many cases strong acceleration occurs after a broken channel line, which in our case will be wave three of three, towards 1.01. We are not really sure if wave 2 has already finished or its something more complex here, so for now invalidation level remains at 1.0390, but break below the support channel line would already threaten the bullish count.

 
AUDUSD Weekly Chart
December 11 2011 – back to bullish mode

After some significant weakness seen a month back, pair reversed sharply from 0.933 region, bounced exactly from the upper base channel support line. As such, it seems that top of a long-term bullish trend is still not in place, and that impulsive sequence from 0.6 will continue, currently with wave IV in progress and wave V yet to come towards 138.2 and 161.8% extended Fibo levels.

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