Technical Analysis

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Description:
TradingLounge’s Peter Mathers Technical Analyst outlines Technical Analysis and Trading Strategies using the Tradinglevels Pattern Recognition Elliott Wave as Trading Education.
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Technical Analysis

News
NEW YORK -(Dow Jones)- U.S. stocks held losses as investors mulled Greece's debt-swap negotiations and a meeting between euro-zone financial ministers.

CFD Commodities

US Gold CFD: 1677
Technical Analysis:
TradingLevels: The overhead trendline from Sept and Dec last year on the daily chart are also the resistance now at 1680 (SG2) There is also another over head trend line on the hour chart cutting into the area. The key for direction is simply to allow the price time to develop at 1672 as support or resistance. Essentially the move up from the MediumLevel 1650 is testing new highs within Subgroup2 1665|1672|1680 and the pivot 1672 as support or resistance is the key for the next direction.
Elliott Wave: As you can see on the 1 hour Gold Chart the Elliott count has a completion here at the 1680. As always you would need to see an impulse wave down (five waves) for the start of a down trend. From a trading point of view understand the price is is SG2 only if it was out of SG2 to the downside would you start shorting, you can scale in with a failed retest of 1672 then add on the failed retest of 1665 cover shorts close to 1650, that’s if the price moves through these moves, for the upside the 1672 as support then adding on 1680 with the view of getting to 1700, you need to trade what you see and use support and resistance as your trading friends, how you handle the money is how you make it, defend and attack at the right time, a trader needs to learn to defend first only then will you know when to attack
Silver: Expect a corrective pattern at the 32.00, expect three swings then a push higher to 33.00 as the strong move up would be a wave three, so the correction at 32.00 would have to be wave four and you know they are sideways. Complicated and time consuming, but they are the foundation for the next trend up the fifth wave, which should be on lower volume they the third wave
Oil WTI: 99
Technical Analysis:
TradingLevels: The retest from MinorLevel (mTL8) 98.00 to 100 (TL1) is now underway as expected, so we wait for this to play out as support or resistance, the short can be a move back under 98.00 and a long trade can be support on 100, you can improve on the short trade.
Elliott Wave: The retest of 100, if it’s correction then it will be in three waves if its bullish then five waves and so far it appears five waves developing on the 10 minute chart but this can be just the Wave A of an ABC corrective rally. I will explain in the video so you will know what to look out for.
Base Metals

US Spot Prices (in l/b)
US Copper: Last: 3.77+
US Nickel: Last: 9.20-
US Zinc: Last: 0.61-
US Aluminium Last: 0.99+
Copper CFD: 377
Technical Analysis:
As you know we are seeing a wave four corrective pattern unfold within Subgroup2 (SG2 365|372|380) this is time consuming as long as the price stays above the 360 the trend up is fine, the price is likely to stay with SG2 but with China closed for a week there may be less support from the Shanghai Copper Futures contracts.
US BHP at the Major TradingLevel TL8 | 80.00 is going to struggle and probably retract to some degree so taking part profit at high prices is sensible trading, it is likely to see copper back at 365 during this corrective process. In Australia it’s the small stocks (XSO) that will have the wider trading ranges and the ASX Material sector will also correct at the MediumLevel 11,500. So don’t expect the Materials to trend up, it’s more of a profit taking, especially while China is on holidays this week. Another small but important point is that the SP500 move down seems to be developing in five waves, so a correction there too
Forex

US Dollar: 80.30
Technical Analysis:
Will the 80 (MajorLevel TL8) and 1.30 on the Euro be the turn?
We can expect for the next session or two that the price will retest at these levels, they will move above and below. The US Dollar high roughly around 81.78 (Index) can see a natural swing that distance below 80 that would be close to the first MinorLevel 98.00, there are supports at 79.50 and 79.00, but in the slightly bigger picture with the US trending up we are actually seeing the price work its way through TL8 in the Classic TradingLevels pattern., so we have just had the first high above the level and now the correction, the ABC correction, the move down is just the Wave A, so it’s the Wave C that may take it down to 78 (mTL8)


EURUSD 1.30
TradingLevels: When working with one level also include the next degree lower above and below the level you are working with, because the smaller levels above and below are the first support and resistance that you can work a trade from. So at 1.30 Subgroup1 above 1.3010|1.3020|1.3030 is SG1 and below 1.30 is Subgroup2 SG2 1.2980|1.2972|1.2965 Expect the current price to move around these levels
Elliott Wave: Understanding the ABC corrective pattern on the US Dollar obviously helps understanding the ABC pattern on the Euro
Trading Strategies: The Wave A up is probably completed and should start to focus on the Wave B on the charts it’s a move down to 128 but because the price is at the 130 the Wave B corrective pattern may stay closer to 1.30 and that is a move back to 129 it would be advisable to also observe the SP500 wave structure as it moves back into 1300
Ps. Looking at the US dollar there can be another small move down, so the Euro can move up to 13072 before starting the Wave B, support on 1330 creates the long.
AUDUSD 1.0530
TradingLevels: Expect a larger corrective pattern across 1.05
Elliott Wave: The current high can be the top of the current trend, expect a move back to 105 and below to 10472 SG2 zone
Trading Strategies: Short, but expect the price to bounce around in SG1 10510|10520|10530 and 105 bounce as buyer will be sitting there. In the slightly bigger picture the current support is back at 104 and can be tested

Indices

Dow Jones CFD 12,700
Technical Analysis
TradingLevels: The price reached the lower end of SG2 12765|12772|12780 it’s the 12,772 that is the resistance followed by 12,800.
Elliott Wave: The move down appears to be impulsive, so a retest of the trend down then another trend down, this can be seen as an ABC correction or a more series top in play
Trading Strategies: This is a corrective pattern at 12700 the first support is SG2 12672, second support 12650 We have to expect a minimum of three swings at this current high before we can judge if a top is in play, we can see from the Currencies that a reasonable correction can occur here

S&P500 CFD: 1315
TradingLevels: Expecting the 1320 as resistance with the price retesting 1300 even lower at 1280 first support followed by 1272, whatever happens a corrective abc pattern at 1300 is probable in line with the Euro and the AUD
Elliott Wave: ABC correction starting back into 1300
Trading Strategies: Trade the sublevels and MicroLevels while the pattern is in SG1 and 1300 with the likelihood of a larger corrective pattern unfolding. On the flip side support on 1320 would see the price at 1330 but the 1320 support must be tested, retest.
FTSE 100 CFD: 5777
TradingLevels: The price has reached the target 5572 SG2 it will either corrected here in line with the US markets and currencies or spike to 5800 and correct.
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: Allow the price time to dance around in SG2 waiting for 5772 to become the support or resistance and then trade in that direction

DAX CFD: 6425
Technical Analysis: Resistance MediumLevel 6500, If the Dax slips under 6400 then weakness is in. While it’s above the 6400 the trend is up to the resistance and MediumLevel 6500


SPI CFD 4233
Technical Analysis
TradingLevels: SG1 4210|4220|4230 is still the support above the 4200, however the Midpoint 4250 is creating the strong resistance, we don’t have the Chinese market open this week for the lead, and now the US markets and Currencies have finished a particular Elliott wave pattern up and are likely to have a larger correction. When working with SG1 the 4220 is the pivot so use this as support or resistance to assess the bias resistance negative support positive.
Elliott Wave: The pattern above 4200 is very much the same as the AUD when it was last at 104, meaning it can get messy here
Day Trading: The pattern above 4200 is corrective, but it can get larger and more messy, I don’t know where the lead will come from to move it up the N225 is trending strongly as are other Asian markets, but the ASX is being lazy. The main trend is up, but expect small corrections. The PPI figures on Monday were basically flat so its normal to expect the CPI figures on Wednesday to be flat to slightly lower, basically no shock to the markets


Summary

China being close for the week the leads will come from the US unless the ECB meeting on 26th is negative, Greece can be the catalyst for a pullback.

US, we have been tracking the Elliott count up and figured that the current trend was ending, the Dow target was 12772 and the SP500 1320, the sharp sell off last session helps confirm that the top of this current trend is completed and a larger correction (pull back) can now take place.
The US Dollar is in an ABC correction down and the Euro in an ABC up, they both have completed or nearly completed their Wave A of their ABC corrections, there Wave B will coincide with the US and European pull backs that are likely to unfold.

The Asian markets are bullish, except the ASX which is being quite lazy and with China closed and the US possibly correcting will cause the ASX200 to stick to 4200

Weekly bullish Cycle was also broken on Monday by not having the internal momentum to move higher, this is a sign of weakness.

To keep it simple, allow the Dow to flicker across 12,700 in the next session and if the price finds the 12700 as resistance then the correction is starting if its support then the pull back is minor.

It is a good idea to lock is more profit on the Daily Robo long trades while the prices are higher. Defence is the first action to take, if the closing price on the daily bar closes lower then the open, then reduce, also if the opening price opens lower than the previous close reduce. There are a few more videos on the Robo on the Robo Strategy page, I still need to make more on the attack side and the money management which I plan to do shortly as I would like to create a clear path for using the Daily Robo.

Trading Quote
Most of traders lose because they don’t have a winning strategy. Apart from this even among those traders who do, many don’t follow their strategy. Trading puts pressure on weaker human traits and seems to seek out each individual’s Achilles’ heel. - GILL BLAKE

Today's Financial Events
Time Currency Detail Forecast Previous

Tuesday, January 24, 2012

10:00am AUD CB Leading Index m/m 0.6%
All Day CNY Bank Holiday
Tentative JPY Monetary Policy Statement
Tentative JPY Overnight Call Rate <0.10% <0.10%
Tentative JPY BOJ Press Conference
6:00pm CHF UBS Consumption Indicator 0.81
7:00pm EUR French Flash Manufacturing PMI 49.3 48.9
7:00pm EUR French Flash Services PMI 50.5 50.3
7:30pm EUR German Flash Manufacturing PMI 49.1 48.4
7:30pm EUR German Flash Services PMI 52.6 52.4
8:00pm EUR Flash Manufacturing PMI 47.4 46.9
8:00pm EUR Flash Services PMI 49.1 48.8
All Day EUR ECOFIN Meetings
8:30pm GBP Public Sector Net Borrowing 12.7B 15.2B
9:00pm EUR Industrial New Orders m/m -2.1% 1.8%
12:30am CAD Core Retail Sales m/m 0.2% 0.7%
12:30am CAD Retail Sales m/m 0.3% 1.0%
1:00am EUR Belgium NBB Business Climate -10.1 -10.6
2:00am USD Richmond Manufacturing Index 6 3
3:15am CHF Gov Board Member Danthine Speaks
7:00am GBP BOE Gov King Speaks

Australian Corporate Calendar
Whitehaven Coal WHC. December Activities Report
PanAust Ltd PNA. December Quarterly Report
Ferro Metals Interim Management Statement & Production
Kingsgate Consolidated KCN December Quarterly Report
Medusa Mining Ltd (MDSMF) December Quarterly Report
Newcrest Mining Ltd NCM December Quarterly Results
Resource Generation RES December Quarterly Report
G.U.D. Holdings GUD Interim 2012 Results

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!