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

DAILY TECHNICAL REPORT 10 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 Awaiting New Sell Trade Setup.

GBP/USD Await fresh signal.

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

USD/CHF LONG 2 0.8905 0.9340/0.9600 (Entered 21/09/2011) 0.8905

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

AUD/USD Awaiting New Sell Trade Setup.

GBP/JPY Possibly looking to sell higher.

EUR/JPY Sell limit 3 104.50 103.50/100.70/97.50 105.50

EUR/GBP Await fresh signal.

EUR/CHF Buy limit 3 1.2170 1.2240/1.2344/1.2500 1.2100

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

SILVER Exited at 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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Oversold bounce is likely to be temporary short-covering.

EUR/USD’s bearish (wave 3) impulsive slide has retraced over half of its

uptrend (taken from June 2010). The move is temporarily unwinding from

oversold conditions and is likely to be temporary short-covering.

Key resistance is likely to cap any potential oversold bounces around

1.3690 (28th Sept high) and 1.3797 (22nd Sept high), then 1.3937 (15th Sept

high), which is near the previous breakout zone at 1.4000.

The bears still need to confirm a meaningful breakout beneath that all-

important psychological level at 1.3000 to unlock further scope into 1.2860

and much lower.

Inversely, the US dollar remains strong (as most other popular “risk”

markets weaken from overcrowded uptrends). Having said that, short price

activity is unwinding slighting ahead of the key level at 80.00.

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

level of 15000 contracts (which is 3 standard deviations from the yearly

average). This 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. VIDEO MIG Bank Webinar: “Why the US dollar is likely to gain up to 30% in 6‐12 months.”

S-T TREND L-T TREND STRATEGY

Awaiting New Sell Trade Setup.

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

IMPULSIVE (WAVE 3)DECLINE TARGETS

1.3000 & 1.2870 TREND 2 YEARS (1.3960)

200-DMA (1.4056)

EUR/USD (Daily)

BIG LEVEL

(1.4000)

BERMUDA TRIANGLE

S FAILED

BREAKOUT

+

-

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

http://www.fxstreet.com/webinars/sessions/session.aspx?id=8e1265eb-a0b4-4b43-87d3-e5be91699f54

mailto:[email protected]

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Recovery continues after QE announcement.

GBP/USD has recovered well after meeting 1.5272 last week, despite the

announcement from the Bank of England of the need for more QE.

We still keep in mind the swift sell off seen after the break under 1.6111,

which warns of a recovery higher, back towards the 200 day moving

average near 1.6129.

It is anticipated that any further strengthening in the US Dollar may not see

the full participation of GBP/USD. 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 bullish reversal. (See our GBP/AUD

special focus here).


Await signal.

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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Basing around 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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Enters into a corrective phase.

USD/CHF continues to consolidate with today’s push under 0.9183,

warning of a larger corrective phase. While above 0.8919 it is anticipated

that a test of 0.9340 and higher can be achieved. Scope is seen for an

eventual return to 0.9600, ahead of a possible lower high and a larger

corrective phase to the downside.

The 50 week moving average is now viewed as support, near 0.8970. This

is also supportive of further gains in the medium-term.

Longer-term a return towards parity is anticipated and potentially higher.

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


Long 2 at 0.8905, Objs: 0.9340/0.9600, Stop: 0.8905.

USD/CHF hourly chart, Bloomberg Finance LP


USD/CHF

USD/CHF daily chart, Bloomberg Finance LP


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Sharp correction holding within previous range.

USD/CAD’s latest sharp correction is pushing lower within last Friday’s

trading range. Our long position in the model portfolio continues to favour

a resumption higher above the resistance level at 1.0673 and 1.0880.

Meanwhile, only a sustained close beneath 1.0200 will extend setbacks

into 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 retesting its 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, Objs: 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

TARGETS1.0850

DEMARK™ BUY SIGNAL

USD/CAD (Daily)

MAJOR LOW

(0.9446)

200-DMA(0.9784)

August High (1.0673)

MAJOR RESISTANCE

200-DMA (1.3769)

EUR/CAD (Daily)

50% (1.3570)

61.8% (1.3379)

REVERSAL PATTERN

CHF/CAD (Daily)

200-DMA (1.0932)


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Unwinding from oversold conditions.

AUD/USD is unwinding from oversold conditions. Meanwhile, the

short/medium downtrend remains bearish and favours a resumption into

0.9388 (04th Oct low) and 0.9220.

Near-term resistance is likely to cap temporary bounces into 0.9817 (07th

Oct high) and 1.0000 (psychological-pivot level)

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.


Awaiting New Sell Trade Setup.

AUD/USD


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

AUD/USD daily chart, Bloomberg Finance LP

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™

61.8% (68.47)

SELL SIGNAL

BREAKDOWN

200-DMA

(83.56)

ADDS TORISK

AVERSION

AUD/USD (1 YEAR)

TD RISK(1.0935)

TD RISK(1.1102) DEMARK™

SIGNALS SELL

200-DMA (1.0391)


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Potential for a lower high between 120.85 and 123.31.

GBP/JPY appears to be in the process of completing a corrective phase

from 116.84 after finding support last week at 116.98. However, it is

anticipated that gains will be limited to the region between 120.85 and

123.31, where a lower high would be favoured to form.

A failure to hold above 116.84/98 will suggest the end to recovery

potential, with a resumption towards 115.00 then favoured.

The current recovery structure from 116.98 is more suggestive of a minor

break over 120.85, but this will be monitored ahead of strategy

formulation.


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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Within the midst of a corrective phase.

EUR/JPY’s break under 101.94 which occurred last week was not as

dynamic as was expected. The more recent push over 103.00 is now more

suggestive of a corrective period. However, while under 104.96 there

remains scope for an eventual resumption of weakness to challenge the

support of a falling daily channel, currently near 99.70.

With this in mind a lower high is sought for a return towards 100.76

initially. Under the annual low would then open up an extension to 97.50,

ahead of 92.80, levels not seen since 2000.

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

push back over 108.03.


Sell limit 3 at 104.50, Objs: 103.50/100.70/97.50, Stop: 105.50.

EUR/JPY hourly chart, Bloomberg Finance LP


EUR/JPY daily chart, Bloomberg Finance LP

EUR/JPY


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Return to 0.8530 still favoured.

EUR/GBP saw a failed attempt at breaking under both 0.8530 and daily

trend-line support. This may initially be viewed as bullish. However, the

200 day moving average continues to provide resistance on the upside,

warning of a period of range bound trade.

A minor bias to the downside remains, given the medium term structure

which has seen a push under 0.8672, suggesting that the rise seen since

0.8285 may be complete.

An eventual break under 0.8530 is favoured and is currently viewed as the

best trigger for strategy formulation.


Short stopped. Await fresh signal.

EUR/GBP hourly chart, Bloomberg Finance LP

EUR/GBP daily chart, Bloomberg Finance LP

EUR/GBP



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Meets supply close to hourly channel resistance.

EUR/CHF continues to be contained by an hourly rising channel, with the

latest phase lower occurring close to channel resistance. This channel is

also currently managing to keep trade above the 200 day moving average.

Scope is still seen for a test of the 50 week moving average (currently at

1.2476).

It is also noted that price is approaching the 1.2500-1.3000 zone which is

likely approaching the limit of the markets willingness to trade with the

bias of the SNB. Should these levels be met, it is expected that further

gains in this cross will become more dependent on Swiss economic

releases.

A sustained move under 1.2024 will alter our near-term bullish bias.

S-T TREND L-T TREND

Buy limit 3 at 1.2170, Objs: 1.2240/1.2344/1.2500, Stop: 1.2100.

EUR/CHF daily 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 remains bearish after its dramatic

20% price fall, which helped confirm the extreme overbought conditions

(marked by DeMark™ indicators), that timed with a key cycle peak, ahead

of that all-important $2000 glass-ceiling.

The “perfect storm” of bearish technical signals is also being pressured by

the CME’s recent 55% hike in margin requirements, which is helping to

squash the largest of gold-bug positions. Most concerning is that

speculative (net long) flows have recently breached a key downside level

which may threaten over 2 years of sizeable long gold positions. In price

terms, Gold’s latest 20% bearish slide is still worth less than the largest

average drawdown measured since the start of the yellow metal’s long-

term bull market in 1999.

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

breached in 3 years! A number of “bargain hunting” trend-followers will be

watching this benchmark “line in the sand” for repeat support or a

potential big squeeze lower.

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: 1805, Objs: Lowered to 1300. Stop: 1704

GOLD

Gold, weekly, daily chart and COT Liquidity measures, Bloomberg Finance LP


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

COT NET LONG SPECULATOR POSITIONS

OVER 2 YEARS OFSIZEABLE LONG

GOLD POSITIONSUNDER THREAT

IF KEY LEVEL BREAKS

200-DMANOT TESTED IN 3 YEARS!

RISK (1935)

DEMARK™ SIGNAL WARNED OF GOLD’S OVERBOUGHT CONDITIONS WHICH LED TO A $200 DROP IN 3 DAYS!

BREAKOUT

$1704

OWNSIDE: $1600 / $1530 UPSIDE: $1935 / $2000 GOLD KEY TRIGGER LEVELS

$1600

D

$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 $26.0700.

Exited at 32.5200. 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 produces 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.


Exited at 32.5200.

SILVER

Spot Silver daily, monthly chart and gold-silver ratio, 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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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/



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

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Transcript of 2011 10-10 migbank-daily technical-analysis-report