Trading Plan for the days action 3/05/22

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Refer to charts for comments on expected price action. Charts Marked with anticipated entry setups in YELLOW and ideal setup in GREEN.

US indexes were choppy as bulls ramped higher in the final hour of trade to dig themselves out of another hole. The Nasdaq rallied about 2.7% while the DOW 1.7% and SP500 2.14% to end with some gains. It seems that there is little conviction either way and the late rally was due more to intraday closing of shorts than a new positive mood ahead of FOMC.

RBA out at 2:30pm AEST – Expecting a lift from 0.10% to 0.25%

The SPI200/ASX200 were ion lows into support before the US rallied into the close and lifted both around 50pts. I expect that there will be some choppy but tentative action today ahead of RBA rates and the statement. Will be looking to see if buyers can hold support for a run higher….but will not be keen unless it is a clear setup. The DOW rallied over 500 pts off the lows in the final hour as bulls (algos) decided the selloff was over. Price pushed back into resistance at 33165 before stalling…or they ran out of time before the close. Expect that the uncertainty will continue ahead of FOMC Thursday so watching the 33165 level to either hold or break…bias towards hold. Hang Seng open will be important to define the levels as the Index was closed yesterday. Expecting that the recent rally was over done so we may see an opening squeeze on bulls before another push higher. Will need to let the action play out first then look for a higher low. The Nikkei has a bank holiday today so no trading.

Cryptos were contained being held down by the negative sentiment in European trade but buoyed by the late rally in the US. Bitcoin is holding up off key support around 37700 and anchored down around 39150. Want to see a test higher prior to another move lower but expect price will be contained again until the US session kicks off. Ethereum managed to drive back up into 2867 late in the US session. This is the key level today to either hold for a short or fail for a long of a retest (refer to charts).

Spot Gold was beaten down as expected from the start of the Asian session into the US close. Price broke through support at 1875 and looks to be heading to new lows. In the near term, I expect to see a test into 1875 from below and then potentially for the downtrend to resume. There may be some more choppy action ahead of FOMC which will be interesting for inflation hedge traders of Gold…ie will in finally find a long term bid.

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SPI200 Index