2011 10-03 migbank-daily technical-analysis-report
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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 info@migbank.com www.migbank.com
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DAILY TECHNICAL REPORT 3 October, 2011
www.migbank.com
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: r.william@migbank.com, 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
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DAILY TECHNICAL REPORT 3 October, 2011
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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).
S-T TREND L-T TREND STRATEGY
Buy limit 3 at 1.5420, Objs: 1.5520/1.5869/1.6200, Stop: 1.5320
GBP/USD
Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424
GBP/USD hourly chart, Bloomberg Finance LP
GBP/USD daily chart, Bloomberg Finance LP
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DAILY TECHNICAL REPORT 3 October, 2011
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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.
S-T TREND L-T TREND STRATEGY
Long 3 at 77.20, Obj: 80.20/81.50/83.30, Stop: 75.90
Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 426
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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DAILY TECHNICAL REPORT 3 October, 2011
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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.
S-T TREND L-T TREND STRATEGY
Long 2 at 0.8905, Objs: 0.9340/0.9776, Stop: 0.8885.
USD/CHF hourly chart, Bloomberg Finance LP
Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424
USD/CHF
USD/CHF weekly chart, Bloomberg Finance LP
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DAILY TECHNICAL REPORT 3 October, 2011
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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.
S-T TREND L-T TREND STRATEGY
LONG 3: 1.0390, Obj: 1.0670, 1.0880, 1.1130 Stop: 1.0210
Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454
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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DAILY TECHNICAL REPORT 3 October, 2011
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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.
S-T TREND L-T TREND STRATEGY
SHORT 3: 0.9705, Obj: 0.9390/0.9220/0.8770, Stop: 0.9840
AUD/USD
Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454
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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DAILY TECHNICAL REPORT 3 October, 2011
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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.
S-T TREND L-T TREND STRATEGY
Possibly looking to sell higher.
GBP/JPY
GBP/JPY daily chart, Bloomberg Finance LP
Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424
GBP/JPY hourly chart, Bloomberg Finance LP
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DAILY TECHNICAL REPORT 3 October, 2011
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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.
S-T TREND L-T TREND STRATEGY
Buy limit 3 at 102.20, Objs: 103.50/105.00/106.80, Stop: 101.80.
EUR/JPY hourly chart, Bloomberg Finance LP
Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424
EUR/JPY daily chart, Bloomberg Finance LP
EUR/JPY
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DAILY TECHNICAL REPORT 3 October, 2011
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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.
S-T TREND L-T TREND STRATEGY
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
Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424
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DAILY TECHNICAL REPORT 3 October, 2011
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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
Bijoy Kar, Technical Strategist, E-mail: b.kar@migbank.com, Phone: +41 32 7228 424
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DAILY TECHNICAL REPORT 3 October, 2011
www.migbank.com
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
S-T TREND L-T TREND STRATEGY
Short 1 at 1805, Obj: 1300, Stop: 1704
GOLD
Gold, weekly chart, Bloomberg Finance LP Ron William, Technical Strategist, E-mail: r.william@migbank.com, 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
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DAILY TECHNICAL REPORT 3 October, 2011
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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.
S-T TREND L-T TREND STRATEGY
Sell stop 3 at 29.1000, Obj: 26.0700/21.5200/19.5000, Stop: 32.5200
SILVER
Spot Silver daily chart, Bloomberg Finance LP
Ron William, Technical Strategist, E-mail: r.william@migbank.com, Phone: +41 32 7228 454
OVER 30 YEAR BASE BULL
MARKET FROM
1999
Silver Monthly (since 1980)
13
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
13
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DAILY TECHNICAL REPORT 3 October, 2011
www.migbank.com
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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DAILY TECHNICAL REPORT 3 October, 2011
www.migbank.com Chief Market Strategist h.friend@migbank.com
Howard Friend
b.kar@migbank.com Technical Strategist Bjioy Kar
CH-2008 Neuchâtel Tel.+41 32 722 81 00
14, rte des Gouttes d’Or
www.migbank.com
MIG BANK info@migbank.com Technical Strategist
r.william@migbank.com
Ron William
CONTACT
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