Trading Plan for the days action 24/05/22

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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. All prices refer to the CFD pricing from the charts below.

OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 24/05/22 (as at 7:30am AEST)

The US saw some solid buying to follow on from Fridays late bounce and a strong rally in European trade. Stock market bulls were supported by continued selling into the USD as buyers unwound longs. US Bonds hovered around recent highs as yields were generally range bound. The ECB said that it was likely to ‘lift its deposit rate out of negative territory by September’ which supported the Euro and accelerated the selling into the USD. Many traders in the US expect that the ‘Fed Put’ (Fed implementing policy to limit share markets declines) will stop the US from going into a technical bear market hence the bounce Friday and bargain hunting rally overnight..it also explains the lack of volatility which is associated with major selloffs. Still the Fed has to fight inflation with rate rises and it is not going away.

The ASX200 is expected to open UP 20 points from the overnight action on the SPI200, although the after hours spike lower in Indexes may see a very muted open instead.

SPI200 (Jun) overnight futures up 19 pts to 7172
SP500 up 72.39 pts to 3973.75
NASDAQ Composite up 180.65 pts to 11535.27
Dow Jones up 618.34 pts to 31880.24
FTSE100 up 123.46 pts to 7513.44
DAX30 up 193.49 pts to 14175.40
GOLD futures US session (Aug) up $5.50 to $1853.90 an ounce
COPPER futures US session (Comex Jul) up $0.0657 to $4.3407 a pound
OIL futures US Session (Nymex Jul) up 0.01 to $110.29 a barrel
CRB Index up 2.47 pts to 315.20
AUDUSD trading at 0.7109
EURUSD trading at 1.0692
GBPUSD trading at 1.2585
USDJPY trading at 127.9000
USD Index US Session (ICE Jun) down 1.108 to 102.065

CLICK HERE FOR ECONOMIC DATA OUT TODAY (AEST) 24/05/22

The SPI200/ASX200 worked its way lower off 7195 during the day session and managed to grind back up in after hours trade to end around 7172. I expect that the open will be weak as Indexes had been hit across the board after hours. Watching to see if the recent higher low on the SPI200 at 7153 will hold. The DOW is toying with the 31752 level after holding below 31915. Price action has had a good run up off 31385 so may want to squeeze out some buyers so watching now for a lower high for a potential sell setup. The US Tech 100 took a hit after hours with a spike into 11845 off 12050…about 1.8%. Price is holding for now but the failure to move above 12050 could trigger sellers into action again for a move below 11710. Hang Seng was well contained in overnight trading as price held below 20580 and took a hit with the after hours drop in the Nasdaq. Watching to see if 20580 holds as a lower high and drags in sellers today for a move lower. Ideally I would be looking for an opening flush higher and then failure. The Nikkei could not press up through 27105 resistance and is back down into 26900 where buyers yesterday, and overnight, provided support. Expect that this level will be key today to hold otherwise we may see a good selloff. The DAX Index saw a relatively choppy session after a strong open from the underlying index. Price held below 14195 as momentum up is starting to wane. I expect that the idea of Interest rate rises may weigh on the action and trigger some buyers to take some risk off the table. Watching to see if price pushes below 14045 or holds the level. UK 100 Index is in a healthy uptrend in the short term which looks set to kick up into 7535 highs. If price can push back above the 7479 level and hold, then expect a run higher in the European session.

Cryptos had a late selloff after rallying from the open of the Asian session. Bitcoin is under pressure and pushing back below the $30K level. Watching for a flush into support to squeeze out recent buyers. Ethereum is much the same as price remains under pressure off yesterdays highs. Watching for a move down into 1909.

Spot Gold is making its way higher thanks to the selloff in the USD. Price has held a flush down into 1848 after trading into 1864 resistance. If the USD continues to unwind, then expect to see gold push up through 1864. Crude Oil had a flat session and continues to hold above 109.50. If a lower high holds at 110.80, expect sellers to target stop losses and squeeze the price lower. USD Index continued to unwind longer term buyers and was helped by the bullishness into the Euro after the ECB comments. If price holds below 102.380, then expect further selling pressure as price is coming off a big ‘Daily’ level.

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SPI200 Index