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01  Today's EarlyBird Technical Analysis Report 21 February 2012» 
02  International Commodity: OIL – Latest Elliott Wave»
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01  Today's EarlyBird Technical Analysis Report – 21 February

Market Drivers

Dow Jones 12,949 +0.35%  CLOSED
Base Metals Positive
US Gold CFD: 1734
Oil WTI: 105.43
US Copper CFD: 374
US Dollar: 79.00
EURUSD 1.3240
AUDUSD 1.0740
Dow Jones CFD 13,020  
S&P500 CFD: 1369
FTSE 100 CFD: 5946   
DAX CFD: 6950
SPI CFD 4266

News
European governments moved toward a second rescue of Greece, calculating that the 130 billion-euro ($172 billion) cost of a fresh bailout is a price worth paying to prevent a default that could shatter the euro area.

CFD Commodities 

US Gold CFD: 1734
Technical Analysis:
TradingLevels: SG1 1730 as support is the set up for the long trade, there is the overhead trendline that is the current resistance, the Elliott wave counts suggests higher prices to come
Elliott Wave: Gold reversed sharply from the 1705 support in the past, and didn't fall below 1704, which means that direct bullish wave count* is still valid.
But we are still waiting on a decisive break through two resistance lines, through 1740 and 1745. Only that break will then set-up further rise for gold prices. Until then different scenarios are possible. Please check 4h updates in the Gold section for more details.*See Elliott Wave education

Silver 
TradingLevels: To remain a positive pattern means to stay above support 33.00*.
Elliott Wave: Wave four Triangle completed and wave five up starting *See TradingLevels article

Oil WTI: 105.43
TradingLevels: The Midpoint 105 has been reached, so we can expect a small corrective pattern. The next sublevel target is 108 and then the first MinorLevel 110 (mTL1)
The next important levels between 105 and 108 are 10650, 10720, 10772
Elliott Wave: Oil prices are trading nicely higher, clearly in impulsive fashion, especially after a gap, which is a very common in third waves. Currently, we are focused on more near-term upside for black wave 3, but probably not higher than 106 area, from where we may see a corrective pull-back into a wave 4.

Base Metals 

US Spot Prices (in l/b)
US Copper:           Last: 3.73+
US Nickel:             Last: 8.92+
US Zinc:                Last: 0.88+
US Aluminium       Last: 0.96+

Copper CFD: 374
Technical Analysis: You know I would get bearish if the price locked under the 72 / 372. I cant work out if the move down from 398 to the current low is corrective of a larger impulse wave building to the downside, the internal structure has merits for both. So we use the levels and in this case the SG2 380|372|365 the 72 is the pivot in the group so it’s important as support of resistance, if the 365 becomes the resistance then SG2 is the resistance and the price will move to the Midpoint 350.
The Shanghai is struggling up, the Shenzhen offers a clearer wave structure however it will react at 1,000 and the current price is 963 so it can still have a week of upside, which in turn supports the metals.
The other guide stick is US BHP and while its supported on the Midpoint 75* the market is supported a break of this would see the price at 72 which is still ok just weaker, but under the 72 as resistance and the structure is bearish, of course the reason for mentioning this is that is impacts directly on all Materials Sectors. So in a nut shell the metals markets are support but there can be a bearish picture immerging that requires monitoring, the key is how the Shenzhen reacts to 1,000
ASX / XMJ is vibrating across the MediumLevel (ML15) 11,500 this will take a minimum of three swings but after this pattern the price as support or resistance will offer the direction. The current retest is key for short term traders. *See TradingLevels article

Forex 

Forex US Dollar   79.00
Technical Analysis: Forgetting about the wave count for a moment and looking at the bigger picture on the daily chart, the price has been working with TL8 | 80.00 since Oct, the way it has been working across this level is a bullish scenario, understanding the tradinglevels Classic pattern is helpful and of course is the Elliott pattern, in fact they are one in the same. The current price action has just seen a retest of 80, this is the normal first retest from the closest largest price 79, however the first MinorLevel is 78 (mTL8) a retest from this level is more important in the bigger picture, because if the price found support on 80 we would go long.
So the current wave is for the Euro up and the Dollar down towards 78 or lower, in the bigger picture this doesn’t matter because the real longer term trade would come from the 80 as support, this also creates the longer term short for the Euro, it’s good to hold this longer term view / trade in mind.

Forex EURUSD  1.3240
TradingLevels: SG2 13272, the 772 and 272 are stronger than just 72. The price is correcting from SG2 and the trend is up, so finding a set up on support is the tactic, the Midpoint 13250 then adding on 72 and exit at 133
Elliott Wave: We know, that if that’s the wave three of three sell-off on Usd/Chf, then rise on euro is also a third wave. In such case, pair will reach 1.3320 very soon, but must not reverse back below 1.3180. We will see if we are on the right track, but definitely need more aggressive buying to confirm wave three move.
Trading Strategies: The price is correcting in an uptrend, so look for a set up on the long side, it always safer to wait for the price to climb back up upon the closest largest number as support before working the trade, at this stage that would be the Midpoint but that can change. Once the price gets to 133 expect a larger correct pattern, so you would have to wait for that to complete before trading from 133 to 134 if that set up came about.

Forex AUDUSD  1.0740
TradingLevels: Resistance 1.0772*  Support 10720
Elliott Wave: As you know we are monitoring now a triangle idea in wave four on the 4h chart, so if that’s the case, than a coming price action will be to the downside for wave C of a triangle, which will fill the gap, and then ideally reverse from 1.0680-1.07 support zone
Trading Strategies: Support on 10772 creates a long trade set up as does 108, but you would also face the corrective action at 108 as the price goes through the process of developing 108 as support. Day Traders can work the 10750 as support for long trade set up if it occurs as it is the current resistance and supply level 0.6%  *See TradingLevels article

Indices 

Dow Jones CFD  13,020 Closed – but Futures/CFDs  Markets open
Technical Analysis
TradingLevels: As Major TradingLevel at 13,000. The Futures price is above this level at 13020 so it can move higher.
Elliott Wave: The wave intraday structure up is displaying impulse patterns, positive.
Trading Strategies: long off 13,000 for day traders  

S&P500 CFD: 1369   US Holiday Closed – but Futures/CFDs Markets open
TradingLevels: Next target SG2 365|372|380* 
Expect more correctional patterns at 372 to 380
Elliott Wave: Counting five waves up from 1330 which should complete into 1372 -1380 
Trading Strategies:  Scalp MicroLevels *See TradingLevels article

FTSE 100 CFD: 5946
TradingLevels: Support on SG1 of 5900
Elliott Wave: As long as 5930 holds as support the target would be 5980
Trading Strategies: Long on the Midpoint support 5950

DAX CFD: 6950
TradingLevels: If the price can find support on the Midpoint 6950 then 7000 is the target, if it can’t then it’s back to 6900 for a larger correction 
Elliott Wave:  We talked before about this markets reoccurring expanding patterns, meaning trends and corrections have been increasing in size, which would suggest once the corrective pattern at 6800 (abc) was completed then the next move up would be swift.
Day Trading: The 6950 as support is the key for longs

SPI CFD 4266
Technical Analysis
TradingLevels: Resistances 4272 and 4300 expect corrective price action at this levels, however the wave count suggests higher moves
Elliott Wave:  The current move up is in three waves but should turn into five waves 
Day Trading: Long is the call, however the SG2 4265|4272|4280 are deep in the supply zone (sellers) so expect corrective action the 4300 being the old high will have profit takers.
I think the better trade will come much later on, what I mean is the current three waves up need to turn into five waves (impulse) then a abc correction ( Impulse + abc = Motive wave) then trade long into a larger wave three. 

Summary

As you know US stock market was closed but US futures markets are open.

The Greek situation edges forwards and markets make new highs. I figure once all the paper work is signed off we will see a correction but the rumours sell the facts.

China allows more money to flow into its system and the resource markets respond. Base metals are positive but are still in their down trend / correction. The Shenzhen will soon run into resistance at 1,000 and the Shanghai continues to edge higher but in a corrective manner which is weakness.

The Australian market appears to have finished its corrective price action and should now push higher. That said we are looking for confirmation and that is five waves up in the SPI – so far we have three waves which is actually corrective but the personality appears impulsive so the bias is towards the five waves being created. 

This is obviously a positive for the Australian markets but we also need the base metals on side and they are currently correcting down; we need to see support and if we look at copper, the 372 as support is a good guide. The correction on the ASX XMJ at the MediumLevel appears corrective and therefore can offer the upside, so keep an eye on the current retest of the 11500. If base metals are not the driver what is?

Trading Quote

Do independent research before buying a stock. People do more research when buying a television then they do before buying a stock!

Today's Australian Corporate Calendar 

Gloucester Coal (GCL.AU)*      Q2 2012 Results
Metminco (MMCLF)*                 December Quarterly Activities Report
Alesco Corp Ltd (ALS.AU)         Interim 2012 Results
Beach Energy (BPT.AU)            Q2 2012 Activities Report

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02 International Commodity: OIL – Latest Elliott Wave

OIL 1 Hour Chart
Monday, 20 February 2012 at 7:05:00PM AEST

Oil prices are trading nicely higher, clearly in impulsive fashion, especially after a gap, which is a very common in third waves. Currently, we are focused on more near-term upside for black wave 3, but probably not higher than 106 area, from where we may see a corrective pull-back into a wave 4.

OIL 4 Hour Chart
Monday, 20 February 2012 at 7:40:00PM AEST – uptrend continuation

Oil reached levels above $105 per barel, but that doesn't mean that uptrend is now finished. In fact, recent rally was quite sharp, so we suspect that this was only wave three of three and that market will move even higher in the coming sessions; to $107. Meanwhile prices must not close below 102.45 on a daily basis.

OIL Daily Chart
19 February 2012 – wave C) of (2) targeting 78.6%

As expected, oil is trading nicely higher, now already below 103.70 that we highlighted few times in our past updates. We believe that now wave C of (2) is now in progress, targeting 106.50 area, 78.6% retracement.

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!


  

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