Today’s Trading Room looks at Copper, Natural Gas and GBPUSD.

To learn what the Trading Room is about see first Trading Room analysis here.

Trading Room will focus on classic technical analysis. Elliott wave analysis will be for support and for targets / invalidation points.

Copper (Spot)

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

Last Trading Room advice to Elliott Wave Gold members advised to enter short with a stop just above 2.717. Members were advised that short positions should become profitable within 24 hours, which is what happened, and that stops should have been then moved to breakeven. The whipsaw of the 5th of April should have closed short positions for no loss.

Copper is now range bound with resistance about 2.70 and support about 2.59 (with overshoots). Volatility declines as price moves sideways, ATR remains very low and flat, and ADX indicates a consolidating market.

In the short term, the very long lower wick for the candlestick of the 7th of April indicates upwards movement is likely to begin the new trading week.

TREND LINE

Click chart to enlarge.

Copper has found very strong resistance at the green trend line, which goes back to at least August 2011. The doji candlestick for February puts the trend from up to neutral.

ELLIOTT WAVE ANALYSIS

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The upper edge of the blue channel has provided resistance, with a strong overshoot for the 30th of March. Copper may be ready to move lower in a third wave at three degrees now and this should see an increase in downwards momentum.

Trading advice for members only: [wlm_private “GOLD Daily YT|GOLD Daily NT|GOLD Daily NTGR|GOLD DAILY 6M NT|GOLD DAILY 6M YT|GOLD DAILY 6M NT GFR|GOLD Plus Daily YT|GOLD Plus Daily NT|OIL SILVER Weekly YT|OIL SILVER Weekly NT|GOLD Plus Daily 6M NT|GOLDPLUSDAY6M|OIL SILVER Weekly 6M NT|GOLDPLUSDAY1M|GOLDPLUSDAY1MYT|GOLDDAY6M|GOLDDAY1M|GOLDDAY1MYT|OILSILVERWEEK6M|OILSILVERWEEK1M|OILSILVERWEEK1MYT”]Look to open a hedge: the short position if price moves a little higher in the next couple of days, and a long position when price moves a little lower after that. If price closes close to the upper edge of Bollinger Bands again, then enter a short hedge there with a stop just above 2.717 and a profit target at 1.937. For updates on Copper trading advice and when to enter the long portion of a hedge, I will make comments just before the close each day on each Gold post for EWG members only, so pay attention to comments each day.[/wlm_private]

Natural Gas

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

Last trading advice for Natural Gas to Elliott Wave Gold members on the 31st of March was:

“A trade set up is not seen at this time. Look for price to pullback to touch the green Magee trend line on the TA chart. If that happens, then enter long with a stop just below the line. Allow for overshoots, but exit long positions if the line is breached.”

The Magee trend line was touched again on the 4th of April. This was the signal to enter long according to trading advice given. That best case entry point would have been at the low of the day at 3.122, but in reality members may not have entered exactly at the price point where price touched the line. However, any long positions should now be profitable and stops may be moved up to protect a little profit.

The Magee trend line may be used now as a trailing stop for long positions.

ADX indicates an upwards trend and RSI allows further room for price to rise. Stochastics is overbought and exhibits divergence with price, but this oscillator may remain extreme for long periods of time when this market trends. The bottom line is any pullbacks may be expected to find support at the green Magee trend line.

On Balance Volume is now bound within a small range. Watch this carefully; if it breaks below the yellow support line, it would indicate a deeper pullback may be underway; if it breaks above the purple resistance line, it would indicate an increase in upwards momentum.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

The last Elliott wave count was invalidated with a new high this week above 3.174. Cycle wave b may be continuing higher as a double zigzag.

Click chart to enlarge.

MACD indicates an increase in momentum to support this third wave up.

When minor wave 3 is complete, then minor wave 4 may not move into minor wave 1 price territory below 3.088.

The gold channel’s lower edge is the same as the green Magee trend line on the daily technical analysis chart. Price should continue to find support at the lower edge while minor wave 3 continues.

GBPUSD

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

Price looked like it was forming a Pennant pattern. What StockCharts data does not show today is the daily candlestick for the 7th of April that broke out of the pattern to the downside. The candlestick is shown today on FXCM data below.

VOLUME ANALYSIS

Click chart to enlarge.

On Balance Volume gives a bearish signal with a break below the short term yellow support line. The downwards breakout from the pennant pattern has support from volume for a strong downwards day.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

Cycle wave c needs to complete as a five wave structure. The final fifth wave is incomplete and may only have just begun. The target expects to see the most likely Fibonacci ratio between primary waves 5 and 1.

Click chart to enlarge.

Primary wave 4 fits perfectly as a regular contracting triangle, offering perfect alternation with the zigzag of primary wave 2. Primary wave 2 lasted 2 months and primary wave 4 lasted 6 months. Triangles are usually longer lasting structures than zigzags, so this disproportion is not only acceptable but should be expected. This wave count has the right look.

The breakout from the triangle should be down.

Within minor wave 3, no second wave correction may move beyond the start of its first wave above 1.25620.

TRADING ROOM SUMMARY TABLES

OPEN POSITIONS

Click table to enlarge.

Trading advice for gold given to Elliott Wave Gold members will be included in Trading Room summary tables. However, so that it remains private for Elliott Wave Gold members only, it will not be included in Trading Room posts.

CLOSED POSITIONS

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Each month a new “closed positions” table will begin. To see all closed positions for March 2017 see the last Trading Room post for March here.

RECOMMENDATIONS

DISCLAIMER

As always, it is essential that anyone using this analysis for trading advice manages risk carefully. Follow my two Golden Rules:

1. Always use a stop.

2. Never invest more than 1-5% of equity on any one trade.

Trading is about probabilities, not certainties. Failure to follow my two Golden Rules of trading indicates failure to manage risk.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

This analysis is published @ 06:48 p.m. EST.

2 Comments

james on April 11, 2017 at 6:23 am

Thank you for the Copper and GBP/USD lara, very useful. Living in the UK and trading gold and miners in dollars, The GBP/USD should be very interesting as we start a wave 3 up in gold and gold miners and the pound drops around the same time time. Hopefully it will be very favourable to my account balance.
Roopa on April 10, 2017 at 4:21 am

Thank you for the analysis lara.
What about USD ?
Any count on that ?

Trading Room – 9th April, 2017

2 Comments