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 WEDNESDAY 11/05/22 (as at 7:30am AEST)
US indexes remained under pressure ahead of the CPI data release tonight. Tech stocks found some bargain hunters to provide support while the DOW moved lower and Europe followed on from a positive (of the gap open) Asian session. The Inflation numbers are expected to be out at 0.4% (Core CPI excluding food and energy) up from 0.3% and 0.2% (CPI) down from 1.2%. It seems that we can expect news of a slowing US economy so it will be interesting to see how the market takes it. Lower inflation will be good but that may mean slower growth and potentially selling into shares which have been (maybe not now) over-valued. The biggest problem now is easing growth and stubbornly high inflation which many believe will lead to a recession…which is what news is pumping up at the moment.
SPI200 (Jun) overnight futures down 8 pts to 7014
SP500 up 9.81 pts to 4001.05
NASDAQ Composite up 114.42 pts to 11737.67
Dow Jones down 84.96 pts to 32160.74
FTSE100 up 26.64 pts to 7243.22
DAX30 up 154.07 pts to 13534.74
GOLD futures US session (Jun) down $17.60 to $1841.00 an ounce
COPPER futures US session (Comex Jul) down $0.0337 to $4.1598 a pound
OIL futures US Session (Nymex Jun) down $3.33 to $99.76 a barrel
CRB Index down 2.36 pts to 297.09
AUDUSD trading at 0.6941
EURUSD trading at 1.0531
GBPUSD trading at 1.2316
USDJPY trading at 130.4400
USD Index US Session (ICE Jun) up 0.246 to 103.935
The SPI200/ASX200 were pushed lower from the start of the US session to give back gains made in European trade. Prices look to be finding some short term buyers into 7012 on the SPI200 and 7040 on the ASX200. That said, the longer term picture remains weak and could easily flush lower. I expect that we may be seeing some squaring up of shorts prior to the US CPI numbers. Looking for a squeeze higher from the open. The DOW reacted up off the 32100 zone and then pushed back into the level into the close. The pressure remains on the downside and I would not expect to see a selloff today ahead of the data release. Expecting a grind up off 32100 and then potentially a move lower if the data disappoints. US CPI (Inflation numbers) out tonight before the US open. The US Tech 100 had a slightly better session as price held below 12540 but did find buyers at a higher level around 12170. Expecting to see price locked in between the two levels ahead of the data release and then the action to kick off. If numbers come out in line with expectations, then expect to see some chop. Hang Seng rallied from the weak open to close the gap into 19700 before sellers edged the price back down. The 19385 level may be the line in the sand today and traders may look to defend price above the minor higher low at 19285. Still looking for a flush higher on open and then pressure into the lows. The Nikkei is holding up off the major level around 26000. Bulls will need to defend the level on the open if they expect to see a rally so looking for a flush into the zone on the open and then a higher low to work a long off. The DAX Index bounced nicely off major lows around 13320 but did hold below 13700. The action is currently contracting the major move lower so expect to see some more chop. If price grinds up today, may expect to see 13700 tested and broken bt I do expect to see the action contained ahead of the CPI. The UK 100 Index was mixed with bears defending 7302 and will look to hold the level as a lower high for a break below 7211. If they can not then expect to see a squeeze higher potentially into 7339 and above.
Cryptos found further selling pressure late in the US session and after the close. I expect that traders are targeting the 30K level on Bitcoin which is a massive level. If it goes, then expect to see some carnage…but I feel it is a major stop hunt. Either way, expect some chop with the current bias down down for now. Ethereum hovering around 2310 which I expect to see some choppy action until the level either gives way or holds…where I will look for a higher low or lower high…with the later being volatile.
Spot Gold remains under pressure as expected and is extending on the losses into 1827. Bias is clearly down but extended so watching to see a base build prior to any longs and expect that shorts should be scalpy not long term holds. Crude Oil took another hit below $100 where I will be looking for buyers to start to step in to the action. Early inventory data suggests that we can see a higher than expected US inventory number tonight which will bring in some volatility. The problem is that the USD remains high and pressuring Oil. Bulls will look to defend the $99 zone but may have find the effort tough going. USD Index is continues to hover around daily highs but may find some short term resistance around 104.000 ahead of the data release. Movements have been tame the previous sessions but could see the volatility lift tonight over the CPI number.
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US Tech 100 Index
Hang Seng Index