Wednesday, 4 April 2012

ASX 200 is back below resistance zone

In after hours trading, the market is 10 points lower than its Aussie close. The 4300 area is key support.

S&P 500 watch that wedge

The cash / US session S&P 500 broke to a new high for the year earlier in the week, but contracts based on the futures did not. In either case, a similar wedge pattern can be drawn, and it is worth keeping an eye on the lower line. The following chart shows around the clock trading, not just the US session, with the market currently down 9 points from the previous New York close.

AUD/USD (1) watch that trend line, and (2) Elliott Wave raises possibility of rally from near current levels

Watch for a possible re-test of the downward sloping trend line.

If you are not interested in Elliott Wave, tune out now. I have been discussing AUD/USD Elliott Wave counts with reader MH. He spotted a possible ending diagonal currently being formed, as part of a corrective move from the late Feb high. The implication of a downwards corrective move is of course that the late Feb high will be beaten at some point. As a trader I am not going to fight the trend, which is clearly down. But I do value Elliott Wave as a tool for illustrating the market's various alternate potentials, and if (IF!) the following count looks like working in coming days, it would allow an early long entry to a rally, or early exit from shorts, depending upon a trader's current positioning

Zooming in to the decline from the late Feb high, I have illustrated my count below. It gives C = A at very near current levels, a possible place for the correction to end and the market to begin a rally. MH's count is slightly different but no less valid, placing A where I have B, and suggests C = A at 1.0204. Given the position of the downward sloping trend line on the first chart, perhaps MH's count is higher probability.

EUR/USD bearish false upside break from trend channel?

Big trend line test on Gold weekly chart

If this trend lineis broken a target of below 1400 will be possible. The flipside is of course that nearby current market price would be a neat level to rally from, perhaps subsequent to a false downside break. Certainly worth keeping an eye on. If you missed it, my more extensive look at Gold from a couple of weeks ago showed a longer term trend channel that gives me the "below 1400" target.

Silver short term trend line test on daily chart