Trading Plan for the days action 12/05/22

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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 THURSDAY 12/05/22 (as at 7:30am AEST)

US index futures dumped hard after the CPI number came in stronger than expected to highlight the continued inflation problem that the Fed has to deal with. This also highlights the need for a more aggressive Fed with regards to interest rates which is concerning stock traders. Price bounced back hard on the open of the share market (algos giving the insto traders better sell prices 😁) before price unloaded to the downside again. Bias remains down in the US and USD pressuring higher after the CPI release so expecting more bears to start to play soon.

SPI200 (Jun) overnight futures down 35 pts to 7010
SP500 down 65.87 pts to 3935.18
NASDAQ Composite down 373.44 pts to 11364.23
Dow Jones down 326.63 pts to 31834.11
FTSE100 up 104.44 pts to 7347.66
DAX30 up 293.90 pts to 13828.64
GOLD futures US session (Jun) up $12.70 to $1853.70 an ounce
COPPER futures US session (Comex Jul) up $0.0600 to $4.2145 a pound
OIL futures US Session (Nymex Jun) up $5.95 to $105.71 a barrel
CRB Index up 7.80 pts to 304.89
AUDUSD trading at 0.6938
EURUSD trading at 1.0516
GBPUSD trading at 1.2246
USDJPY trading at 129.9600
USD Index US Session (ICE Jun) up 0.082 to 104.025

CLICK HERE FOR ECONOMIC DATA OUT TODAY (AEST) 12/05/22

The SPI200/ASX200 was dumped and rallied along with the rest of the market after the US CPI release. Price found resistance up at 7076 which held and then anther lower high held at 7074 which will pressure the market today. With the rate rise concern, the selling pressure may continue today and take price action down through 6994 (SPI200) and 7000 (ASX200). The ASX200 is showing a major RTF double top at 7105 which will be concerning. The DOW dumped after the CPI release and then managed to bounce right back into the stock market open. It was a good fight back but the selling continued as inflation and rate rises weigh on bulls who are not willing to add risk to the action yet. Expecting to see a further push lower with the current anchor down at 32190. The US Tech 100 came under the most pressure as growth shares took a beating. With continued high inflation numbers and the Fed taking it easy on Rate Rises, expecting more downside into tech. Hang Seng fell back down to 19345 giving back all of the day sessions gains. The daily trend remains down so will be watching for a move below 19345 ideally off an early flush higher. The Nikkei also gave back day sessions gains and is hovering just above lows at 258700 which I would expect to be tested on the open. From there, watching to see if lower highs continue to hold. The DAX Index rallied hard off 13530 once the US opened but did find sellers at 13835 to cap the gains. Watching to see if price holds a lower high for a break down below 13530. The UK 100 Index failed off 7339 which will be concerning to bulls. Price is hovering up off support for now around 7236. Watching to see if price breaks down through the level and whether bears can follow through on the selling pressure.

Cryptos could be in for a beating if Bitcoin and Ethereum can not find some support soon. The major $30K level was broken on Bitcoin and stops are being targeting below the level. If price does not bounce, then carnage could easily set in as there will be alot of traders under margin pressure which could easily overwhelm the market. Ethereum is also under fire which could see a push down to the 1745 zone if buyers do not step in soon.

Spot Gold rejected an early flush lower after the CPI number but ran out of steam on the rally into 1853. There may be some safe haven buyers stepping into the action or inflation bulls finally making a move. As momentum is easing into 1853, we could see a flush lower where I will be watching to see if buyers again support price…or not. Crude Oil rallied hard off yesterdays lows around $98. Watching to see if buyers run out of steam around the 106.50 zone. With the USD edging higher and Oil inventories higher than expected, sellers may start to weigh on the action. For now, it seems that oil traders are focusing on the Russia/EU quarrel over energy. USD Index moved higher after the CPI release and held onto the gains into the close. The reaction showed that many traders were not positioned for the higher CPI figure and may start to readjust dollar positions upwards. If that is the case, expecting to see currency crosses (with the USD) under further pressure.

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SPI200 Index