Trading Plan for the days action 10/05/22

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Charts Marked with anticipated entry setups in YELLOW and ideal setup in GREEN. There will be many possible scenarios shown so it is key to work off major levels once the price action unfolds.

OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 10/05/22 (as at 7:30am AEST)

US indexes took another beating in what seem as controlled selling across the board. The USD Index found some safe haven buying and continues to hover around highs while currencies held up well compared to shares. Oil was hit hard along with gold so we may be seeing some margin calls playing out or risk off tone (big players closing some risk anywhere to reduce margin levels). Growth shares took a hit as traders remain focused on inflation and rate rises at a time when the US economy may be slowing…stagflation is a real concern. Expecting to start seeing bigger falls and smaller bounces.

SPI200 (Jun) overnight futures down 99 pts to 7003
SP500 down 132.10 pts to 3991.24
NASDAQ Composite down 521.41 pts to 11623.25
Dow Jones down 653.67 pts to 32245.70
FTSE100 down 171.36 pts to 7216.58
DAX30 down 293.62 pts to 13380.67
GOLD futures US session (Jun) down $24.20 to $1858.60 an ounce
COPPER futures US session (Comex Jul) down $0.0735 to $4.1935 a pound
OIL futures US Session (Nymex Jun) down $6.68 to $103.09 a barrel
CRB Index down 11.87 pts to 299.45
AUDUSD trading at 0.6949
EURUSD trading at 1.0558
GBPUSD trading at 1.2331
USDJPY trading at 130.3800
USD Index US Session (ICE Jun) up 0.081 to 103.775

CLICK HERE FOR ECONOMIC DATA OUT TODAY (AEST) 10/05/22

The SPI200/ASX200 were pressured right from the open of the European session to add to the days losses. The trend is well established down at the moment so any longs for me will be scalps. Bias is down so will be looking for failed rallies. Expecting price to flush lower on the open and will be looking for continuation. As the over night session was so negative, we may see an early spike to clear out some sellers prior to a fade lower. The DOW saw another choppy session with what looked to be some controlled selling. Price is down on what many will be hoping is a major level so we could expect a bounce. If not, then the bias remains down so shorts only for me on the bigger picture. The 32115 level may be key today and tonight. Traders will be looking towards US CPI (Inflation numbers) out Wednesday before the US open. The US Tech 100 has extended on the recent losses and moved well below 12720. Like the DOW, price action was also messy and controlled lower which leads me to feel that the market will continue lower. Bias is down and being anchored at 12330 so as long as a pullback holds below the level, shorts are still in play. Hang Seng has been closed so will have to play catch-up with the previous few US sessions…which have been negative. Expecting to see a low open and then flush below 19380 or even lower. The level is a daily low so any continuation below could build up a lot of steam. If the level can hold, then watching for a higher low and grind up although expect that any move up will be choppy. The Nikkei also made its way into a major level around 26000. If price can flush the lows and then bounce back, then watching for a higher low and squeeze on sellers. If not, then the index had a problem and the flood gates lower may open. The DAX Index moved lower to test down into 13320 support. If buyers can not hold the level, then expecting to see major continuation lower below 13000. The UK 100 Index broke down below 7339 and accelerated lower. The bias down is being anchored at 7259 so unless this level is broken, sellers remain in control and short setups are the play.

Cryptos took a hit right from the Asian session open yesterday and continued to follow US share markets lower. Expecting that there were a lot of margin selling pressure as buyers realize they are wrong. Both Bitcoin and Ethereum are down at major levels which will need to hold to fend off some more carnage. Watching for some choppy action around the levels and waiting for a clear higher low or lower high to trade off.

Spot Gold took a beating as discussed in the previous morning report. Price held a lower high as expected and flushed into 1853. The action lower may not be over and could easily extend into 1845 or 1827…which is the extension level highlighted previously.

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SPI200 Index