Refer to charts for comments on expected price action. Charts Marked with anticipated entry setups in yellow.
Markets were up hard overnight in which was a strange reaction to the Fed raising interest rates and highlighting a more aggressive stance, with regards to fighting inflation, going forward. Markets are well and truly extended and I am concerned that we may see a delayed reaction to the news. Still if the momentum is up and the setup is there, then we have to trade the price action not guess.
Note : We will have to deal with some wide ranges today so risk levels may have to be wider than normal.
The SPI200/ASX200 both rallied around 100 points once the rate rise became news. We have seen this move prior, when prices spike hard through a level and then fail on the following open, so I am watching the initial action for a long squeeze. There is some major resistance just overhead that the bulls may want to target…either way I expect a choppy open. SPI200 March Contract will rollover to June contract today so it is a delayed open. The DOW rallied around 750 points on the back of the rate rise news. Maybe traders were expecting a lot more aggressive Fed so had to readjust higher….or maybe expectations were that not a lot was factored in with regards to the strength of the economy. Either way, price is extended so I will need to see a pullback off 34150 prior to any long setup. For a short, I expect to see a lower high play out. Hang Seng ran higher with the European and US markets. Price is hovering around 21320 and, after yesterdays stella rally, we may see some profit taking. If not, I want to see a flush lower and then a higher low hold for any long…with potentially wider than normal stop losses. The Nikkei also spiked higher into the close up through 26215. Price will need to either pullback and retest into 26215 for a higher low and long, or will need to give a lower high for a squeeze down. Again, stops may need to be wider than usual as volatility could be evelvated on open.
Cryptos kicked on with the euphoria of the markets. Prices were choppy but ended on a high into the US close. Bitcoin is hovering around a resistance level at 41250 but holding higher lows so may see some follow on bullishness on the open of the Asian market session. Ethereum spiked up through 2748 so will need to flush lower prior to any long or will just extend up into 2843 where we may find a short from profit taking.
Spot Gold kicked higher after a flush down into the 1886 area (fell a little short). Prices are hovering around 1930 so I am watching to see if the recent downtrend is actually broken or we see another push lower.
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Hang Seng Index