2011 10-03 migbank-daily technical-analysis-report

DAILY TECHNICAL REPORT 3 October, 2011

Please note: None of the strategies below represent trading advice or trading recommendations of any kind. Please refer to our full disclaimer.

M S-TERM MULTI-DAY

L-TERM MULTI-WEEK

STRATEGY/ POSITION

ENTRY LEVEL

OBJECTIVES/COMMENTS STOP

EUR/USD SHORT 3 1.3580 1.3000/1.2860/1.2590 (Entered 22/09/2011) 1.3870

GBP/USD Buy limit 3 1.5420 1.5520/1.5869/1.6200 1.5320

USD/JPY LONG 3 77.20 80.20/81.50/83.30 (Entered 25/08/2011) 75.90

USD/CHF LONG 2 0.8905 0.9340/0.9776 (Entered 21/09/2011) 0.8885

USD/CAD LONG 3 1.0390 1.0670/1.0880/1.1130 (Entered 30/09/2011) 1.0210

AUD/USD SHORT 3 0.9705 0.9390/0.9220/0.8770 (Entered 03/10/2011) 0.9840

GBP/JPY Possibly looking to sell higher.

EUR/JPY Buy limit 3 102.20 103.50/105.00/106.80 101.80

EUR/GBP Sell limit 3 0.8645 0.8525/0.8385/0.8200 0.8705

EUR/CHF Await fresh signal.

GOLD SHORT 1 1805 1300 (Entered 12/09/2011) 1704

SILVER Sell stop 3 29.1000 26.0700/21.5200/19.5000 32.5200

Ron William, CMT, MSTA

Bijoy Kar, CFA

WINNER BEST SPECIALIST RESEARCH

DISCLAIMER & DISCLOSURES Please read the disclaimer and the disclosures which can be found at the end of this report

Notes: Entries are in 3 units and objectives are at 3 separate levels where 1 unit will be exited. When the first objective (PT 1) has been hit the stop will be moved to the entry point for a near risk‐free trade. When the second objective (PT 2) has been hit the stop will be moved to PT 1 locking in more profit. All orders are valid until the next report is published, or a trading strategy alert is sent between reports.

MIG BANK / Forex Broker 14, rte des Gouttes d’Or CH-2008 Neuchâtel Switzerland Tel +41 32 722 81 00 Fax +41 32 722 81 01 [email protected] www.migbank.com

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Fresh lows unlock decline into 1.3000.

EUR/USD’s fresh new lows, has unlocked the impulsive (wave 3) decline

into 1.3000 and 1.2860.

Until then, key resistance is likely to cap any potential oversold bounces

around 1.3797 (22nd Sept high), then 1.3937 (15th Sept high), which is near

the previous breakout zone at 1.4000 (near 200-day MA & old trend-line).

Inversely, the US dollar index is continuing to rise (as most other popular

“risk” markets fall). Dollar bulls are expected to extend their recovery into

80.00, following the previous breakout of a major trading range in the next

few sessions.

Speculative (net long) liquidity flows have also spiked above our trigger

level of 15000 contracts (3 standard deviations from the yearly average),

and will help sustain the bull-run from historic oversold conditions

(momentum, sentiment and liquidity).

SPECIAL REPORT : EUR/USD ˝A Fall From Grace˝ ? Decline Targets 1.3770/1.3410. Please select link: REPORT VIDEO

S-T TREND L-T TREND STRATEGY

Short 3 at 1.3580, Objs: 1.3000/1.2860/1.2590, Stop: 1.3870.

EUR/USD

Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454

EUR/USD

EUR/USD daily chart, Bloomberg Finance LP

US Dollar Index daily chart, Bloomberg Finance LP

BREAKOUT TRIGGERSIMPULSIVE (WAVE 3)

DECLINE INTO1.3000 & 1.2870

TREND 2 YEARS (1.3960)

200-DMA (1.4054)

EUR/USD (Daily)

BIG LEVEL (1.4000)

BERMUDA TRIANGLE

BREAKOUTS FAILED

+

-

US$ INDEX (4 YEARS)

DEMARK™BUY SIGNAL

+27% +19%

TRIGGER (15000)

COT LIQUIDITY9 KEY 13 SUPPORT

(73.50-73.00)

US DOLLAR INDEX (Daily – 2 years)

200-DMA (76.00)

DEMARK™ BUY SIGNALS

80.00

BREAKOUT TARGETS

http://www.migbank.com/research/howard/2011-06-17_migbank_daily-technical-analysis-report_special-focus-EURUSD.pdf

http://www.youtube.com/watch?v=8JxLscMBUHY&feature=player_embedded

mailto:[email protected]

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Further recovery leg higher anticipated while above 1.5328.

GBP/USD has potentially completed an initial leg higher after peaking at

1.5716, following last week’s false break lower to 1.5328. However, a fresh

swing higher is anticipated, ahead of the possible creation of a lower high.

Given the swift sell off that has taken place over recent sessions there

remains scope for a substantial recovery higher, back towards the 200 day

moving average near 1.6128.

Longer-term, a return to weakness remains favoured. However, it is noted

that Sterling has already experienced a large devaluation against the US

Dollar in 2008. Thus, further strengthening in the US Dollar is not

expected to lead to full participation of Sterling. Instead GBP/USD is

favoured to remain stronger then most, as displayed in crosses like

GBP/AUD, which appears to be exhibiting signs of a longer-term reversal.

(See our GBP/AUD special focus here).


Buy limit 3 at 1.5420, Objs: 1.5520/1.5869/1.6200, Stop: 1.5320

GBP/USD

Bijoy Kar, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 424

GBP/USD hourly chart, Bloomberg Finance LP

GBP/USD daily chart, Bloomberg Finance LP

http://www.migbank.com/research/howard/Special%20focus%20-%20GBPAUD%20-%2030.09.2011.pdf


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Continues to base amidst the all-time low.

USD/JPY is maintaining a confluence of DeMark™ exhaustion bullish

signals, after the new post WWII record low which was carved out at 75.95.

The reversal signals are also taking place following the second post

intervention retracement in 2011, which is holding around a multi-day base

pattern support, near 76.30-25.

The medium/long-term view remains bullish, watching for a sustained move

above our initial upside trigger level at 77.68. This would offer a

resumption of the preferred new structural bull-cycle into the all-important

psychological level at 80.00, near 80.24 (post BOJ intervention II high).

Keep in mind that such a scenario would help reactivate the longer-term

technical bias, including prior monthly DeMark™ exhaustion signals, within

the ending diagonal pattern, which was part of a major Elliott Wave cycle.

Only a sustained weekly close below here and 76.25 will lead to a

reassessment of the view and extend temporary weakness into 74.55.


Long 3 at 77.20, Obj: 80.20/81.50/83.30, Stop: 75.90


USD/JPY

USD/JPY daily and weekly charts, Bloomberg Finance LP

WAVE 5

83.30

USD/JPY (Daily 1 YEAR)

QUAKE SHOCK!

POST INTERVENTION RETRACEMENT (PIR I)

POST G7

MOVE HIGH

82.00

PIR II

80.24

POST BOJ

MOVE HIGH

DEMARK™ BUY SIGNAL AFTER NEW POST WWII LOW (75.95)

MONTHLY DEMARK BUY SIGNAL

USD/JPY Weekly (2007 – 2011)

ENDING DIAGONAL

PATTERN

BREAKOUT TARGET

(88-85)


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Next targets 0.9183.

USD/CHF continues to edge higher towards an initial re-test of 0.9183,

after managing to maintain a hold over the 50 week moving average,

currently at 0.8979.

Should a break over 0.9183 be realised, then a return towards 0.9340

would then be expected, followed by 0.9784 over time.

A failure to hold over 0.8886 will warn of a larger corrective phase

developing, particularly if a push over 0.9183 cannot be realised.

Back under 0.7712 is required to change the long-term bullish bias.


Long 2 at 0.8905, Objs: 0.9340/0.9776, Stop: 0.8885.

USD/CHF hourly chart, Bloomberg Finance LP


USD/CHF

USD/CHF weekly chart, Bloomberg Finance LP


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Breakout targets resistance at 1.0673.

USD/CAD has powered above resistance at 1.0400. The move has helped

activate our model portfolio long position which favours higher gains into

1.0670 and 1.0880.

Meanwhile, new support (old resistance) is provided at 1.0400. Only a

sustained close beneath here will offer temporary setbacks into 1.0200 and

perhaps even 1.0000 (psychological level and prior trading range).

Elsewhere, EUR/CAD is extending above its 200-day MA, within a large

multi-month trading range. Key resistance continues to hold at 1.4379

(June swing high) which has for some time marked a strong distribution

pattern.

CHF/CAD is unwinding higher from initial support nearby the 200-day MA

at 1.0932, following the dramatic price slide lower (triggered by the SNB

intervention). The cross-rate has now retraced more than half of its 2011

gains.


LONG 3: 1.0390, Obj: 1.0670, 1.0880, 1.1130 Stop: 1.0210


USD/CAD

USD/CAD daily chart, Bloomberg Finance LP

EURCAD and CHFCAD daily charts, Bloomberg Finance LP

USD/CAD (Weekly)

BULLISHRECOVERY

TARGETS1.0680

TD BUY SIGNAL

EXHAUSTION

USD/CAD (Daily)

MAJOR LOW

(0.944 6)

200-DMA(0.9784)

August High (1.0673)

MAJOR RESISTANCE

200-DMA (1.3676)

EUR/CAD (Daily)

50% (1.3570)

61.8% (1.3379)

REVERSAL PATTERN

CHF/CAD (Daily)

200-DMA (1.0932)


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Bearish slide favours support at 0.9537.

AUD/USD’s fresh new lows has activated our model portfolio short

position and is is now extending the slide into 0.9537 (Dec 01st 2010 low).

A break beneath here offers further downside scope into 0.9220.

Elsewhere, the Aussie dollar remains stable against the New Zealand

dollar. The pair is still locked within its new bear cycle structure while it

holds beneath its 200-day MA. Key support can be found at 1.2320 and

1.2100.

The Aussie dollar also continues to weaken against the Japanese yen,

resuming the pattern breakout and now targets 72.58 (50% Fib-bull market

from 2008). The move reinforces current risk aversion in the global financial

community.


SHORT 3: 0.9705, Obj: 0.9390/0.9220/0.8770, Stop: 0.9840

AUD/USD


AUD/NZD and AUD/JPY daily charts, Bloomberg Finance LP

AUD/USD daily chart, Bloomberg Finance LP

AUD/USD (1 YEAR)

TD RISK(1.0935)

TD RISK(1.1102)

TD EXHAUSTION S SELL SIGNAL

200-DMA (1.0391)

200-DMA CAPS BEAR MKT

AUD/NZD (Daily)

KEY SUPPORT 1.2319 / 1.2100

13

38.2% (76.70)

50% (72.58)

AUD/JPY (Daily)

DEMARK™ SIGNAL

61.8% (68.47)

SELL

BREAKDOWN

200-DMA

(83.56)

ADDS TORISK

AVERSION


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Corrective phase favoured to continue.

GBP/JPY appears to have completed an initial recovery leg higher after

peaking at 120.85. Given the structure present since 116.84 there is an

expectation of a further recovery leg higher back towards 123.31. An

eventual lower high is sought for a re-test of 116.84 and then 115.00.

A break back under 117.77 will warn of an earlier return to weakness,

targeting 116.84 immediately.

With the above in mind it is preferred to wait for a bounce towards 123.31

for a short strategy. A sustained push back over this level will warn of a

larger recovery phase.


Possibly looking to sell higher.

GBP/JPY

GBP/JPY daily chart, Bloomberg Finance LP


GBP/JPY hourly chart, Bloomberg Finance LP


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While above 101.94 a further recovery leg is favoured.

EUR/JPY has potentially completed an initial recovery leg higher reaching

104.96 thus far. While above 101.94 there remains scope for a further

recovery leg higher to test the region around the key high at 106.99 where

a lower high would be favoured to form.

The scenario above is tempered by the possibility of further weakness in

equity markets which may impact EUR/JPY to the downside, greatly

reducing the likelihood of the scenario mentioned above.

In order to negate the medium-term bearish bias, we require a sustained

push back over 108.03.


Buy limit 3 at 102.20, Objs: 103.50/105.00/106.80, Stop: 101.80.

EUR/JPY hourly chart, Bloomberg Finance LP


EUR/JPY daily chart, Bloomberg Finance LP

EUR/JPY


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Breaks down towards the key low at 0.8530.

EUR/GBP has broken clear of its old hourly range of the last few weeks

which had been contained between 0.8795 and 0.8652. Now trading just

above the key low at 0.8530 and close to long-term trend-line support

from 0.8068, warns of a return to weakness.

We continue to think that the medium term structure which has seen a

push under 0.8672 suggests that the rise seen since 0.8285 may be

complete.

We focus on trying to achieve the best trade location possible keeping the

short-term bearish bias in mind. It is thus deemed best to wait for a

squeeze higher to sell into.


Sell limit 3 at 0.8645, Objs: 0.8525/0.8385/0.8200, Stop: 0.8705

EUR/GBP hourly chart, Bloomberg Finance LP

EUR/GBP weekly chart, Bloomberg Finance LP

EUR/GBP



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Continues to trade close to the 1.2200 level.

EUR/CHF continues to trade in a tight hourly range close to 1.2200, just

below the current location of the 200 day moving average (1.2342).

The bias remains to the upside given the earlier false break lower from a

falling daily channel and weekly wedge. Should a break over the 200 day

moving average take place, an attempt at the 50 week moving average

(currently at 1.2497) would then be likely.

Recent trade has seen the market willing to trade with the bias of the SNB.

However, should price reach the 1.2500/3000 region, further gains in this

cross will become more dependent on Swiss economic releases.

Sustained under 1.2148 will weaken the very near-term outlook and

sustained under 1.2024 will warn of a complete change in SNB

strategy/economic conditions in Switzerland.

S-T TREND L-T TREND

Await fresh signal, with a bias to long positioning.

EUR/CHF weekly chart, Bloomberg Finance LP

EUR/CHF

EUR/CHF hourly chart, Bloomberg Finance LP



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RISK of a larger decline beneath $1600.

Lowered final objective to 1300. Gold’s short-term downtrend remains

bearish, after its dramatic 20% price fall, which helped confirm the extreme

overbought conditions (marked by DeMark™ indicators), that perfectly

timed with a key cycle peak, ahead of that all-important 2000 glass-ceiling.

The move was also pressured by the CME’s recent 55% hike in margin

requirements, which can trigger major reversals at trend extremes.

There is heightened risk of a much larger decline if we confirm a weekly

close beneath 1600 and 1534 (200-day MA), which has not been breahed

in over 3 years! This would help extend Gold’s “throw-over” signal from its

12-year bull-channel.

The big picture tells us that the largest price falls during Gold’s long-term

bull-market (34% in 1999, 26% in 2006 & 34% in 2008), equates to an

average drawdown of 28% downside risk. Further downside scope is found

at 1300 and potentially even 1000. Remember, this would still be

consistent with Gold’s long-term uptrend and offer a buying opportunity.

Please select links for in-depth Gold coverage: Special Report “Gold’s mountainous peak at risk…beneath $1600” MIG Bank Gold Interview on CNBC Squawk Box (CNBC & BLOOMBERG REPORTS)

MIG Bank Gold Webinar video


Short 1 at 1805, Obj: 1300, Stop: 1704

GOLD

Gold, weekly chart, Bloomberg Finance LP Ron William, Technical Strategist, E-mail: [email protected], Phone: +41 32 7228 454

TREND CHANNEL (12 YEARS)

I

RISK ZONE III

BIGGEST DRAWDOWNS 34% (2008) 26% (2006) 25% (1999) AVERAGE = 28%

25%

26%

34%

GOLD Weekly LOG Chart (1999-2011)

20% SO FAR

200-DMANOT TESTED IN 3 YEARS!

RISK (1935)

DEMARK™ SIGNAL

WHICH LED TO A $200 DROP IN 3 DAYS!

WARNED OF GOLD’S OVERBOUGHT CONDITIONS

BREAKOUT

$1704

$1600

DOWNSIDE: $1600 / $1534 UPSIDE: $1935 / $2000 GOLD KEY TRIGGER LEVELS

$1534

http://www.migbank.com/research/howard/2011-09-13_Gold_Special_Report_(RW).pdf

http://video.cnbc.com/gallery/?video=3000042202

http://www.cnbc.com/id/44310840

http://www.bloomberg.com/news/2011-09-11/gold-may-fall-below-1-700-before-extending-bull-rally-technical-analysis.html

http://www.fxstreet.com/webinars/sessions/session.aspx?id=8f81a2e3-e29b-4031-b370-a85149271145


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KEY support at 26.4000.

Silver’s latest price capitulation is a painful reminder to the investment

community that lightning can strike twice. Note, this marks the second

time silver has crashed, following its 30% fall from April this year.

The move was triggered following a DeMark™ exhaustion sell signal and

has now wiped out almost 50% of silver’s prior gains (taken from Silver’s

all-time high at 49.7900) which was last seen in 1980.

Such dramatic moves traditionally produce volatile trading ranges. This

allows the market to have enough time to recover and accumulate

renewed buying interest.

Expect a large trading range to hold between 37.0000-26.0700 over the

multi-week/month horizon, with downside macro risk into 21.5165 (61.8%

Fib-1999 bull market) and 20.0000. This would still maintain silver’s long-

term uptrend and help offer a potential buying opportunity for the

eventual resumption higher.

Continue to watch the gold-silver “mint” ratio which has now accelerated

higher by 67%, suggesting further risk aversion over the next few weeks.


Sell stop 3 at 29.1000, Obj: 26.0700/21.5200/19.5000, Stop: 32.5200

SILVER

Spot Silver daily chart, Bloomberg Finance LP


OVER 30 YEAR BASE BULL

MARKET FROM

1999

Silver Monthly (since 1980)

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61.8% (21.5165)

38.2% (32.3135)

50% (26.9150)

Silver HITS 1980 Spike High! DEMARK™ SIGNALSELL

I

II

UNWINDING 67% FROM OVERSOLD TERRITORY

Gold/Silver Ratio

67%13 YEAR LEVEL

Silver (Daily) 13

200 DMA(32.8700)

SELL DEMARK™

SIGNALS

KEY SUPPORT

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Limitation of liability

MIG BANK disclaims, without limitation, all liability for any loss or damage of any kind,

including any direct, indirect or consequential damages.

Material Interests

MIG BANK and/or its board of directors, executive management and employees may have

or have had interests or positions on, relevant securities.

Copyright

All material produced is copyright to MIG BANK and may not be copied, e-mailed, faxed or

distributed without the express permission of MIG BANK.

Notes: Entries are in 3 units and objectives are at 3 separate levels where 1

unit will be exited. When the first objective (PT 1) has been hit the stop will be

moved to the entry point for a near risk-free trade. When the second objective

(PT 2) has been hit the stop will be moved to PT 1 locking in more profit. All

orders are valid until the next report is published, or a trading strategy alert is

sent between reports.

No information published constitutes a solicitation or offer, or

recommendation, or advice, to buy or sell any investment instrument,

to effect any transactions, or to conclude any legal act of any kind

whatsoever.

The information published and opinions expressed are provided by

MIG BANK for personal use and for informational purposes only and

are subject to change without notice. MIG BANK makes no

representations (either expressed or implied) that the information and

opinions expressed are accurate, complete or up to date. In

particular, nothing contained constitutes financial, legal, tax or other

advice, nor should any investment or any other decisions be made

solely based on the content. You should obtain advice from a

qualified expert before making any investment decision.

All opinion is based upon sources that MIG BANK believes to be

reliable but they have no guarantees that this is the case. Therefore,

whilst every effort is made to ensure that the content is accurate and

complete, MIG BANK makes no such claim.

DIS

CLA

IME

R

LEGAL TERMS

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www.migbank.com Chief Market Strategist [email protected]

Howard Friend

[email protected] Technical Strategist Bjioy Kar

CH-2008 Neuchâtel Tel.+41 32 722 81 00

14, rte des Gouttes d’Or

www.migbank.com

MIG BANK [email protected] Technical Strategist

[email protected]

Ron William

CONTACT



http://www.migbank.com/



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