Global Technical Analysis Report
AUDUSD & EURUSD will continue lower
- Leading economic indicator US Consumer sentiment, rises more than expected
Commodities – We continue to hold short in precious metals and expect new lows in due course. Base metals may have a different story, as copper is displaying a bias for new highs, based on price action, a higher copper market will support the global materials sector.
Australia’s BHP is a catalyst to this sector and is taking benefit from the firming base metal market, supplementary to this is a stronger Chinese market which is seeing more buying volume entering. There is also the case of a lower AUDUSD supporting BHPs higher price as the lower AUDUSD offers lower operating costs for BHP and therefore we continue to add long to BHP positions The Elliott Wave structure for BHP is suggesting a developing impulse wave upwards, at minimum this would create a higher rally be it corrective or trend
Forex – The AUDUSD trend lower is still displaying Elliott wave impulsive structures and therefore will continue its trend lower towards the 0.96 as the next supporting low
The EURUSD is another short trade, with the main trend unfolding lower and will continue lower as the structure of the USD Index continues higher towards 85.00.
Indices – The Shanghai, calling the low in at 2161 was correct as the volume continues to support the price action from bearish to bullish.
Stocks – Continue to hold US Gold short along with Australia gold stocks. Trades that have been buying BHP will be glad to know the move up has the bias of forming an Elliott impulse wave. This impulse wave offers the minor degree direction so continue to find entries.
Precious Metals
US Spot Gold 1359
TradingLevels The minorlevel mTL3 1,300 a target, between the current price and 1300 are the sublevels. The next step in the process lower is SG2 1380|1372|1365 developing as the next tested resistance. The midpoint 1350 is the next support that requires navigation as a bounce would be expected. Once the midpoint is resistance then its lower to Subgroup1 SG1 1330|1320|1310 expect orders here and therefore choppy price action, the first bounce off 1330 will retest 1340 then work lower through SG1 to 1300
Elliott Wave: The main point is that the trend has further to unwind lower, in a series of wave fours and fives, such as a bounce off 1350 back to 1372|1380 roughly as Wave iv before further downside
Strategy: Longer term traders hold short to 1300. Short term traders short failed retested rallies, firstly in SG2 1380|1372|1365 then with the view of shorting the tested resistance of 1350 the midpoint to 1330. There is still opportunity in shortly gold stocks with CFDs
US Spot Silver 2223
Technical Analysis: Use the same wave count as gold, the first bounce off 2200 is Wave iv and even though the market will work lower, it will do so in a series of waves four and fives, meaning lower corrective rallies of 38% however the corrective rallies will tend to develop more and more complicated, such as side way patterns with internal over lapping wave structures. The major tradinglevel target is TL2|20.00 the minor tradinglevels as minor group1 are 2300|2200|2100 each one of these levels will have orders waiting and therefore require a strategy to navigate
Oil WTI 96.28
Technical Analysis: Oil follows stock. The market on the minorlevel midpoint mTL5|95.00 offer this market the support required for higher ground.
The Elliott wave analysis is an impulse (five waves) up from the last low near 92.00. After five waves comes an bullish corrective pattern an abc 5-3-5 structure followed by further upside, the abc should see the market back testing 95.00. That’s said, from a trading point of view the 9650 as tested support create the longs to 9720. In the bigger picture this is a retest of supply at the major tradinglevel TL1|100. The 98 will see profit taking and you need to roll with that, 8 is always a profit taking number and you should do the same, that way you are working with the flow of the markets
Base Metals
US Spot Prices (in l/b)
US Copper: Last: 3.29+
US Nickel: Last: 6.68-
US Zinc: Last: 0.8185+
US Aluminium Last: 0.8170+
US Copper CFD 331
The 330 as support creates the bias for the upside, the evidence within the internal wave structure is starting to confirm new high will be coming, which would support the impulse wave up for AU BHP as five waves, which would also support our views on higher Shanghai and Shenzhen. So the global materials sector is now starting to create the bias of further upside.
Forex
US Dollar CFD 84.70
TradingLevels: mTL5|85.00 is the next minorlevel target. Tested support on top of 84.30 creates the 84,50 midpoint as the target and support on 84.50 creates the SG2 8480|8472|8465 as the target
Elliott Wave: Intraday, the pattern forming across the top SG1 84.30 appears to be a small corrective wave four, this would see the market to 84.50 where a larger corrective pattern would be expected. The main point in the bigger picture Minor degree, the trend is up.
EURUSD 1.2835
TradingLevels: When the 1.28 - 2820 becomes the resistance, expect further downside
Elliott Wave: Wave 4) of v of (iii) into SG2 12772
Trading Strategies: Long term traders continue to hold short. Short term minorlevel traders can cover shorts into 128 and 12772 zone and wait for resistance at 128 or higher we just need to wait for the Wave (v) to complete and then the next corrective rally.
Intraday traders, can look to short the current bounce of 128, either when the 12820 becomes the resistance or a failed retest higher at 12850. While the market is supported on 12830|20 the market is positive.
AUDUSD 0.9729
TradingLevels: The intraday trend is lower towards 96. First expect the market to work through 97, the supportive bounce, then a move lower to 9650, then the retest back to 97 and then down to 96
Elliott Wave: The Elliott wave trend lower is still unfolding and has further lows to make, expect a bounce off 97 as A Wave iv retesting .98 or .9772. The wave four of one lesser degree is 9770. This bounce would first require the Wave iii low to be created around the .97
Trading Strategies: Sell failed rallies or second retests of important level that coincide with the Elliott wave count
Indices
DJI CFD 15,343
TradingLevels: If 15,300 becomes tested support then the next target is 15,500
Elliott Wave: Same - Wave v of (v) A top can now be in place
Trading Strategies: Same - lock profits all profit now
S&P500 CFD 1665
TradingLevels: Small corrective pattern at 1665 then 1672 as the next target. SG2 1665|1672|1680
Elliott Wave: Wave 3) of v
Trading Strategies: Support on 1665 creates the 1672 target. Expect a small corrective wave four at 1665
FTSE 100 CFD 6742
TradingLevels: Markets are extending higher and have further to go. Support on 6750 would see the market at 6572|80
Elliott Wave: Small wave four across the midpoint 6750 and then wave five higher into SG2 6765|6772|6780 Support on 6772 creates the 6800 as the target this is a profit taking number (8) so a larger corrective process would unfold
DAX CFD 8445
TradingLevels: Next minorlevel target is 8,500. Expect a larger corrective pattern at 8500
Shanghai Comp 2282
The next step is for the top of minor group1 2300 to develop support. As support would create the mediumlevel 2500 as the next target
ASX 200 CFD 5204
TradingLevels: Tested support on 5200 creates a foundation for higher ground.
Elliott Wave: The move down from the high 5250 to the last low 5150 is in three waves, i.e. corrective, but only support on 5230 would help the case for new highs, because this corrective pattern could simply get larger before making a new high. The Base metals are supportive of a higher market.
Day Trading Strategy: Support on 5200 is the second step after 5172 (SG2 72) then the top of SG1 5230 as this get the market to 5250. Going long, use the 5200 and the levels within SG1 to build the trade positions SG1 5210|5220|5230 and take profits at 5250 and wait for support
Quote
“A doctor goes to medical school for four years before practicing medicine; a lawyer goes to law school for three years before beginning the practice of law; why then does a sufficient amount of money with which to trade qualify an unschooled individual to be a trader?” W.D. Gann
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NOTES:
1. Check the ASX Dividend & Reporting check the company financial calendar before trading
2. Prices may change as this report is written while US markets are trading
3. Always think things out for yourself, we are only here to bounce ideas around
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