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Technical Analysis - The Day Ahead
Dow Jones 12,949 +0.35%
Base Metals Negative
US Gold CFD: 1722
Oil WTI: 104.24
US Copper CFD: 371
US Dollar: 79.50
EURUSD 1.3138
AUDUSD 1.0703
Dow Jones CFD 12,950
S&P500 CFD: 1362
FTSE 100 CFD: 5918
DAX CFD: 6865
SPI CFD 4206
News
Friday Close
The Dow Jones Industrial Average pushed higher for the second day after European leaders signalled progress toward an agreement on a second bailout for Greece.
Sunday 19 Feb
Greece Identifies EU325M in Budget Cuts
Prime Minister Lucas Papademos said Greece found all the extra cuts needed to lower spending by 325 million euros ($427 million) to secure a bailout aimed at averting the region’s first sovereign default.
US Commodities
US Gold CFD: 1722
TradingLevels: As long as the price holds above 1710 the current Elliott wave count up stay in place
Elliott Wave: Gold reversed sharply from the lows yesterday, and didn't fall below 1704, which means that recent price action from Feb 13 can still be a wave 2. But even under that scenario we need decisive break through the rising channel resistance lines, showing around 1740
Silver:
TradingLevels: Same - To remain a positive pattern means to stay above support 33.00.
Elliott Wave: Wave four Triangle completed?
Oil WTI: 104.24
TradingLevels: The Midpoint 105 is the next resistance, support on this levels after a small corrective process creates the next long trade or adding to 108. The 108 will see profit taking, however support on 105 creates the 110 as the target which is MinorLevel mTL1 which in turn would see a larger correction
Elliott Wave Same - Impulse wave structures to the upside, all moves down would be corrective (See Elliott Wave chart for wave the count)
Base Metals
US Spot Prices (in l/b)
US Copper: Last: 3.71-
US Nickel: Last: 8.84-
US Zinc: Last: 0.87-
US Aluminium Last: 0.95-
US Copper CFD: 371
Technical Analysis:
SubGroup2 (SG2) 380|372|365 while the price is in here the price is supported, if the 365 becomes the resistance then a larger bearish picture is unfolding and would be in line with the wave count I mentioned on Friday with US and AU BHP a more bearish scenario, the US BHP needs to stay above the 75 as support, under this creates overlapping wave structures and there for weakens.
We are likely to see a bounce from these lows back to 380 -385 from the underlying trend line from the 323 low on the 15/12/2011
Another point of weakness is showing up in the Shanghai, even though the move has been edging higher the trading ranges are getting shorter and shorter, so we can expect a pullback in the Shanghai, the Shenzhen will react at 1,000 (TL1)
Forex
US Dollar: 79.50
Technical Analysis
Expecting a retest of 80 (TL8) supply the first resistance levels are 7950 – 7980 the 9772 is the likely target for this pullback once completed another move down. The same for the Euro in the other direction and the US Indices will line with the Euro, so looking at all these wave structures will help you connect
EURUSD 1.3138
TradingLevels: Bounce off the 1.30 came in nicely and the move up is displaying clean impulse structures. The price will vibrate at 131 for a while before moving higher in line with Indices
Elliott Wave: On Euro we have the same situation like on Gbp/usd below; it’s not clear if wave (ii) is unfolding or its wave three already underway. we however would love to see something more complex in price and longer in time, before wave (iii) explodes higher. Only a sharp rise through 1.3200 zone will suggest that three of an impulse is underway.
Trading Strategies: The move up from the last low 12974 to 13197 can be considered wave one and now we are expecting wave two pull back into 131 before the next move up as wave three. The pullback should be a simply abc Zigzag
AUDUSD 1.0703
TradingLevels: The 1.0772 (72) resistance followed by 108, played out nicely, for the Elliott wave count to stay in tack the 10650 price point needs to remain in place otherwise the Wave 4) is still unfolding and the wave structure from the 10th to the last Friday high is a complex Wave (b) and the (c) would be down to the 382% just below 106 before completing wave 4) I will explain this in the video
Elliott Wave: Five waves up from 1.0645 and corrective set-back during Asian is definitely a bullish pastern for that pair. We expect further rise in the near-future towards and then well above 1.0840 area. Any near-term weakness and deeper will be only even more complex wave (ii)..
Trading Strategies: 10720 as support can create the first scale in and the 10730 top of SG1 creates the second position. Looking at the structure the price can spike down to 10672 first
Indices
Dow Jones CFD 12,950 US Holiday Monday
TradingLevels: The Major TradingLevel at 13,000 is the resistance
Elliott Wave: There is a good case for the Elliott substructures to have ended. This can be the top of the Wave (2) rally or the top of a smaller Minute degree Wave three, but either way for the short term expect a corrective pattern from the 13,000.
Trading Strategies: The are five clear waves up from 12720 the current high, so expect an abc 5-3-5 Zigzag. The US market have a holiday on Monday so we will pick up the thread on tue in line with the currencies as they are also expected to pull back as the Euro has the same five waves up over the last two trading sessions.
S&P500 CFD: 1362 US Holiday Monday
TradingLevels: Next target SG2 365|372|380
But first expect and abc correction down off the current high
Elliott Wave: The ABC for Wave 4) can be completed or the Wave 4) can develop into a triangle pattern, this is the same for the AUDUSD, it may not be the case but it needs to go on the table and not that it makes a lot of difference to the results, but short term traders should be aware of a Triangle structure for Wave four can unfold, you will need to know the pattern and the price points.
Next move -The current move up from 1330 to the current high around 1362 is in five waves, so we should now expect and abc Zigzag retracement
Trading Strategies: After the abc correction, look for a long trade set up
FTSE 100 CFD: 5918
TradingLevels: Expect a abc corrective pattern across 5900 then a move higher 6000
Elliott Wave: The current move up from 5830 to 5920 is five waves, so and abc corrective pattern is next, which can come down to 5872?
Trading Strategies: Support on 5900 creates the 6000 price target – expect and abc correction at 5900 first.
DAX CFD: 6865
TradingLevels: The new current high should now retest lower for support
Elliott Wave: The move from 6650 to the current high is five waves, so a three wave counter trend would be expected
Day Trading: Expect a move back to 6800
SPI CFD 4206
Technical Analysis
Technical Analysis
TradingLevels: Unless SG1 4230 becomes support then the main trend is down, at the end of the day the 4200 is the line in the sand and this as resistance creates the 400 as the target
Elliott Wave: The price action down in Feb is complicated and therefor counted as corrective, but the problem is the internal patterns are simply multiplying so a new low is still possible
On the chart I have the wave iv) around the 4150 - 4130, but because of the complicated structure early in Feb, I am only guessing at the Wave v) low.
Day Trading: Long trades would be 4230 as support, or you can be long above 4200 but the support on 4230 is key for further upside.
The downside, if the 4200 becomes the retested resistance then use SG2 as the trigger to short the 4172 and then adding under 4165
Technical Analysis Summary
Greece has found the cuts required to secure their funding, the outcome on this will first be seen as the indices and bond futures markets open in line with currencies, so Australian traders should check these markets before the ASX opening.
Even though the Greece funding sounds positive, just remember the last two times they were given funding the global markets traded lower for weeks…
Trading Quote
Managing risks is in many ways the foundation of the entire process. Managing risk comes down to two things. First is how you are going to place your stops. That goes back to cutting your losses short. Consider trading as a business venture. Managing risk means recognizing what the costs of trading are. Make a comprehensive plan. Winning traders always treat their trading like a game, but they also look at the whole thing as a money-making business. - GLEN RING
Today's Financial Events
Time Currency Detail Forecast Previous
Monday, February 19, 2012
8:45am NZD PPI Input q/q 0.5% 0.6%
8:45am NZD PPI Output q/q 0.5% 0.2%
10:50am JPY Trade Balance -0.83T -0.57T
11:01am GBP Rightmove HPI m/m -0.8%
All Day USD Bank Holiday
Asian Corporate Calendar
ASX dividends & Reporting: Click HERE»
NOTES:
1. Check the ASX Dividend & Reporting section in the Member area before trading.
2. Prices may change as this Technical Analysis report is written from 3.30 – 6.30AM
3. Always think things out for yourself, we are only here to bounce ideas around.
Good Morning & Good Luck!
Perth Workshop
TradingLounge.com.au is having a 1 Day Trading Workshop in Perth 24 March 10AM – 4.00PM Cost $55 Seating will be limited to first in first served, CLICK HERE
