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CFD Education
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News
NEW YORK (Dow Jones)--Stocks declined, as investors eyed a standoff in Greece's debt-reduction talks and mixed quarterly earnings from a basket of major companies.

CFD Commodities

US Gold CFD: 1677
Technical Analysis:
TradingLevels: The overhead daily trendline held the high in line with the wave count sending the price down to retest support 1650, this is also in line with many other market correcting as well. As with all markets, Indices, currencies etc. the question is, is the move down simply bullish corrective and will when ready see new highs or is a top in play. We normally wait to see if the first leg down is in three waves (corrective) or five waves (impulse equals direction) this should be clear tomorrow or we may have a lead by the time I finish writing this report as there is still nearly four hours before the close
Elliott Wave: As you know on the 4 hour charts there has been a top forming and we are seeing the price roll over, however it is always important to see the evidence of an impulse wave down. After five waves down then there is three waves up (abc counter trend) this is where you look to short and not in during the first fives waves down. Also in this case the you don’t really want to short when the price is above the MediumLevel 1650 you need the 1650 as the retested resistance, a solid resistance price point to work from.
Silver: Silver is holding up better than gold, however it’s still correcting across 32.00 and will likely test 31-SG2 (3165|3172|3180) if not the Midpoint 3150
The 38.2% is 3162 for a wave four, then push up from there?
Oil WTI: 98.76
Technical Analysis:
TradingLevels: If the last low around 97.50 is taken out that would place Oil in the bearish count, while 98 is the support the structure is positive.
Elliott Wave: On the Oil charts the wave count is bearish, however we are waiting for confirmation, from a trading point of view that can be 98.00 as the retested resistance. you can try to scale in earlier between 99 and 98 if you understand the intraday pattern and that would start by seeing the 99 retested twice as the resistance, then use the sublevels to build the trade, with the view of a long term build through 98, 95, 92 and 90 but as mentioned we still need the evidence in the structure and 98 as resistance is a start, otherwise it leaves an open door of upside risk.
Also keep an eye on the wave counts for the Dow/SP500 because of the relationship to oil.
Base Metals

US Spot Prices (in l/b)
US Copper: Last: 3.78+
US Nickel: Last: 9.39+
US Zinc: Last: 0.94+
US Aluminium: Last: 0.99+
Copper CFD: 378
Technical Analysis:
You know the main trend for base metals is up with corrections here and there at certain levels, copper is trapped in SG2 the ASX Materials Sector at the MediumLevel 11,500 US BHP resistance at 80, so we know this uptrend can support the ASX200 and edge it higher slowly until this levels of resistance become support, you also know the ASX200 is dragging its feet in relation to our Asian neighbours, but we are likely to follow up the Shanghai to 2500 the MediumLevel in due course, so the Australian market is positive, it could be the banks that are slowing the ASX200 down, as some Japanese banks with much lower lending rates are eyeing up our home mortgage market waiting to move in, this will flood the market and because our banks are heavily involved in the housing market they are now at risk, we can use CBA being above or below 50 (TL5) as a positive negative indicator for this.
Forex

US Dollar: 80.30
Technical Analysis:
As you know we have been counting five wave down from the high around 82.00, you know we are in the wave five now and in wave five there are five smaller waves which are probably now completed, it’s just a little hard to tell as large numbers like 80 can skew the pattern somewhat, we can look at the CAD but that’s a little tricky at the moment the CHF seems easier and there seems a little lower to come in that.
Any way the move down from 82 is the larger Wave A of an ABC corrective pattern and the Wave B will be starting now, the Euro will be doing the opposite, as will the Indices.
What we can expect is the 80 to hold the price for a while, we will see corrective overlapping pattern at 80 while 80 tries and develops support for the Wave B that should be up for a short time perhaps to 81, the resistances are the Midpoint 8050 then SG2 8065|8072|8080


EURUSD 1.3017
TradingLevels: The price has corrected down below 130 then moved back above, that is a positive. The move up needs to develop support by testing 130 for support, if found then use the sublevel SG1 to work a trade higher
Elliott Wave: The move down from the 13060 to 12950 is in three waves, corrective, so at some point a new high will be made. The move down maybe just the Wave a of and abc for wave four corrective pattern then move up or it can move up now once and if it develops support on 1.30, if there is a move higher, it would be a Wave five and would also complete the larger structure higher the Wave A so targets around the 13072 - 131
Trading Strategies: The 1.30 is the top of MinorGroup1 (MG1) it is also a whole number so we can expect the price to stick to it for a while, so make sure you have clear supports to work from, the 13030 is one of them after a retest of 1.30 confirming demand
AUDUSD 1.0477
TradingLevels: The corrective pattern across 105 is unfolding as thought, the move above 105 roughly 10572 (72) is much the same distance the swing below was to roughly 10430 this is a normal thing and worth noting, this can be in any time frame even the ASX200 swing above 5000 and then below in the big bull and bear market it was only out 100 points. But the main point here is to understand this and use it in all markets and all degrees of structure
Elliott Wave: The move down is either the Wave a) or Wave i) either way it’s completed now and the Wave b) or Wave ii) up is underway, which is a retest of supply with the 105 the pivot in this larger pattern once this move up is completed expect another move down, the norm would be down to 104 but it can stay above the 10450 essentially sticking to 105, if this is the case then the market is strong and it would be worth going long off the 105
Trading Strategies: Well your trading in a corrective pattern, so its trickier, you can look to seel the failed retest of 105 and use the sublevels SG2 with the 10472 being the central pivot but also use the 10465 as a trigger to add to shorts, covering a percentage at the Midpoint 10450 if this becomes the resistance then proceed to 10430 and then cover
11:30am AUD CPI q/q 0.2% 0.6%
Indices

Dow Jones CFD 12,668
Technical Analysis:
TradingLevels: As mentioned below in the Elliott wave, there is a three wave pattern, as long as the last low just above 12600 stays in place its corrective and a move up can occur, the 12,650 is the second support mention yesterday and its holding the price now.
This can be seen as a larger corrective pattern across 12,700, the main numbers in this region are 12,772, 12,720, 12672 these are all 72 number and the 7 is to do with time, which can also translate into the bigger picture 1987 and 2007 etc. any way it’s just one of many small things I like to keep an eye on, I don’t fully understand it but I see it enough to take note.
Elliott Wave: The move down is in three waves (bullish corrective) however it can develop into five waves (impulse) it’s too early to say.
Trading Strategies: The price needs to find support back on 12,700 and long trades on 12,720 otherwise your facing too much exposure, as the price can fail whilst under the 12,700, support on 12,700 would see the price at 12,772 – 12800.
Scalpers can work of the SG2 12,672
S&P500 CFD: 1312
TradingLevels: Can see the resistance at 1320 and now the support at 1310, while the price is above 1300 the market can be treated with a positive bias.
Elliott Wave: small abc correction down from the high to 1305, is this is the case then a new high above 1320
Trading Strategies: Any long trade now need to stay above 105
FTSE 100 CFD: 5777
TradingLevels: Target above 5800, resistance is SG2 5765|5772|5780 the 5772 is the pivot required as support for adding longs. The 5720 SG2 is the support. If the Midpoint can develop support you can use that to scale in long. A larger corrective pattern can emerge while the price is under 5772, it’s not a good idea to over trade around 5800 mTL8 anyway.
Elliott Wave: Is this a top, well if the 5772 becomes the retested resistance then that’s a start, allow three swings across 5772 then look for support or resistance. That is from the high, so we are looking at the first one down and now the beginnings of the fir one up, that’s two. After three then look for support or resistance at 5772
Trading Strategies: Use the sublevels and take profit at the next levels

DAX CFD: 6425
Technical Analysis: The move down last night on the Dax has now retraced 61.8%.
The critical low for day trading is the 6372 the price needs to stay above this to maintain a positive structure and of course use the 6400 as support if it develops and the 6430 as support to build or add to long trades taking part profit at the Midpoint 6450 and the SG2 is the resistance 6465|6472|6480 with the 6472 being the important level


SPI CFD 4230
Technical Analysis:
TradingLevels: The overhead trendline is forcing the price back in to 4200. The AUS is also correcting so it would be a good idea to line the AUD with this market so you can get a feel of when its likely to move. Long trades would only be safer above the 4250. The other factor is waiting for China to reopen
Elliott Wave: The pattern on 4200 is corrective, so a move up when its ready is likely, the negative aspect is the move up from 4000 it’s not a good looking impulse wave its more corrective, but with the Asian markets moving up we have to go along with that general trend
Day Trading: Support 4200 so stops under that for trend traders. Day trading require support on 4230 you can work off 4220 but the 4230 is safer, the 4250 Midpoint is the resistance from the overhead trend line.
11:30am AUD CPI q/q 0.2% 0.6%

Summary

The Corrective pattern down on the US Indices appears to be in three waves the is corrective, therefore new highs should be made.
That said, its still slightly early to confirm these three waves, as they can turn into five waves impulsive, so the low of the last session needs to stay in place.
IF it is three waves down (bullish corrective) then I would think one more high will occur, then a larger correction down would unfold late in the week or early next week.
So if we use the Dow as an example, the last around 12,618 needs to stay in place, if this is the case then we can look at 12,772 and 12,800 as the targets before seeing a larger correction. The European markets are the same, the Australian markets as you know have a relationship with the European markets however that is slipping as we are aligning more with Shanghai and besides money is money from the Euro to AUD
IF correct this would give us time with our Robo Long trades, we should however be clipping small profits along the way.
Trading Quote
Be aggressive in trending market and conservative in choppy market.

Today's Financial Events
Time Currency Detail Forecast Previous

Wednesday, January 25, 2012

10:30am AUD MI Leading Index m/m 0.1%
10:50am JPY Trade Balance 0.36T 0.54T
All Day CNY Bank Holiday
11:30am AUD CPI q/q 0.2% 0.6%
11:30am AUD Trimmed Mean CPI q/q 0.6% 0.3%
1:00pm NZD Credit Card Spending y/y 3.2%
1:00pm USD President Obama Speaks
4:00pm JPY BOJ Monthly Report
7:00pm CAD BOC Gov Carney Speaks
8:00pm EUR German Ifo Business Climate 107.7 107.2
8:00pm EUR Italian Retail Sales m/m -0.1% 0.1%
Day 1 ALL WEF Annual Meetings
8:30pm GBP MPC Meeting Minutes 0-0-9 0-0-9
8:30pm GBP Prelim GDP q/q -0.1% 0.6%
8:30pm GBP BBA Mortgage Approvals 35.3K 34.7K
8:30pm GBP Index of Services 3m/3m 0.4% 0.2%
10:00pm GBP CBI Industrial Order Expectations -19 -23
12:15am EUR ECB President Draghi Speaks
2:00am USD Pending Home Sales m/m -0.3% 7.3%
2:00am USD OFHEO HPI m/m 0.3% -0.2%
2:30am USD Crude Oil Inventories -3.4M
6:15am USD FOMC Statement
6:15am USD Federal Funds Rate <0.25% <0.25%
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
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!