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. All prices refer to the CFD pricing from the charts below.
OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 19/05/22 (as at 7:30am AEST)
The US was smashed from the open as Target results exposed consumer weakness in a high inflation environment. The falls were big with the Nasdaq down 4.73%, SP500 4.04% and DOW 3.57%. It seems that there was a delayed reaction to Powells speech and inflation will be a much bigger issue if the economy does not have the support of the Consumer in the US. Will be watching for continuation although markets are extended to the downside and no doubt will bring in some bargain hunters. Key data release locally is Employment Data at 11:30am Syd time and then Unemployment Claims later ahead of the US open.
The ASX200 is expected to open DOWN 125 points after the US had a delayed reaction to Powells warning on faster rate rises as indexes dumped on the US open.
SPI200 (Jun) overnight futures down 126 pts to 7047
SP500 down 165.17 pts to 3923.68
NASDAQ Composite down 566.36 pts to 11418.16
Dow Jones down 1164.52 pts to 31490.07
FTSE100 down 80.26 pts to 7438.09
DAX30 down 178.18 pts to 14007.76
GOLD futures US session (Aug) down $3.00 to $1815.90 an ounce
COPPER futures US session (Comex Jul) down $0.0870 to $4.1520 a pound
OIL futures US Session (Nymex Jun) down $2.81 to $109.59 a barrel
CRB Index down 6.03 pts to 309.37
AUDUSD trading at 0.6954
EURUSD trading at 1.0464
GBPUSD trading at 1.2340
USDJPY trading at 128.2800
USD Index US Session (ICE Jun) up 0.543 to 103.950
The SPI200/ASX200 took a beating as the US went into meltdown mode. The ASX will be carnage on the open so happy to let the dust settle to see if the index can find some support. Prices are in now mans land for me so will be watching for an early flush higher and then a potential lower high for continuation down. The DOW fell straight down into previous lows around 31295 from Friday and the bias is clearly lower. This level will be key to hold if there is to be another bounce for some longs. Expect that the level will be flushed sometime ahead of or into the US session. The US Tech 100 was a major loser as news that the Consumer may be in trouble hit tech hard. Price is in no mans land so I would expect either a straight move down into lows around 11710 or a flush higher to clear out some sellers prior to a lower high and move down. Hang Seng dropped around 450 points from the underlying index close so there will be another gap to contend with. I expect that the Index could just keep going down from the open so the 20135 level on the CFD is key for the opening flush. The Nikkei also dropped into a support level around 26310 which will need to hold in order to see a bounce. Price is extended and the index will gap down…question is whether anyone wants to stand in front of the bear train. Watching the opening flush for a bias today. The DAX Index also extended into support around 13840 which will be the key to see the commitment from bulls. I suspect that bulls will stand aside to see if there is anymore carnage to come or whether we are in for a push into the 13485 zone. The UK 100 Index inflationary data came out in line with expectations which is high…and pressured the Index lower. Expect that the UK will again raise rates so expecting more downside to come at least into 7353 before a short term bounce. If it blasts down through the level, then looking to 7160.
Cryptos held up well considering the selling off into share markets. Both Bitcoin and Ethereum edged lower and I expect that there will be a lot more downside to come if major Indexes build a head of steam lower. The grind lower may highlight the recent squeeze on margin buyers and lack of enthusiasm to jump back in which leaves current holders in the hot seat potentially with a lack of liquidity to provide support.
Spot Gold interestingly found a higher low at 1808 on some safe haven buying. The rally is not convincing so may see further pressure lower if bulls can not get up to test 1828. If they can, then the major higher low is confirmed and will drag in more buyers. Crude Oil fell over through 111.35 and found some buyers into 108.30. Watching the level to see if buyers can provide some support or whether a bigger unwind is on the cards. USD Index found some safe haven buying to provide support and push the dollar higher off 103.232. Expect more to come if Indexes continue lower.
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US Tech 100 Index
Hang Seng Index