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 and higher lows/lower highs once the price action unfolds. All prices refer to the CFD pricing from the charts below.
OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 25/05/22 (as at 7:30am AEST)
The US had an early flush lower before rallying off the lows once the European session came to a close. The DOW managed to end back in positive territory while the SP500 was weighed down by tech as the NASDAQ struggled to make back the lost ground. Still, the main indexes were generally supported for the session as the USD fell potentially signalling that inflation and rate rise expectations have been over factored into the market. The problem now is the economy is showing signs of slowing while inflation remains very high. New home sales were a lot weaker than expectations and lower than previously released. The number is not a big one but is showing the tightening effect of higher prices and easing demand. New Zealand Cash Rate out today at midday which could liven up the FX markets. One thing I note is the constant ‘speeches’ from Federal Bankers across the globe…maybe some nervousness around?!
The ASX200 is expected to open UP 5/10 points after a choppy overnight session for the SPI200. I expect the pressure to be lower today after the uptrend has shown its first signs of failure.
SPI200 (Jun) overnight futures up 8 pts to 7130
SP500 down 32.27 pts to 3941.48
NASDAQ Composite down 270.82 pts to 11264.45
Dow Jones up 48.38 pts to 31928.62
FTSE100 down 29.09 pts to 7484.35
DAX30 down 255.65 pts to 13919.75
GOLD futures US session (Aug) up $17.50 to $1871.40 an ounce
COPPER futures US session (Comex Jul) down $0.0322 to $4.3133 a pound
OIL futures US Session (Nymex Jul) down 0.52 to $109.77 a barrel
CRB Index down 1.45 pts to 313.75
AUDUSD trading at 0.7109
EURUSD trading at 1.0737
GBPUSD trading at 1.2531
USDJPY trading at 126.8600
USD Index US Session (ICE Jun) down 0.337 to 101.760
The SPI200/ASX200 had a relatively choppy session as it was sold lower on a weak US open only to reverse and make back most of the losses into the close. I note that the move lower was hard while the move back up was a grind…to me this shows bears are getting eager but remain tentative with intraday traders dominating the action. Watching for a lower high to pressure prices down today. The DOW initially flushed lower into 31385 before ramping back up into 31945 into the close. Bulls are trying to defend the lows but price could easily tur south again and continue the daily trend lower. Will be watching for an extension on the move up today but weary that sellers could cap gains at anytime. The US Tech 100 was a lot heavier than the DOW but did still manage to work up off session lows. The price action again spiked below 11710 before being bought up so we may see more short term bulls join in the action for a pop up. Hang Seng held the losses and tested into 19918 support which managed to hold. If the Hang Seng is not in a good mood today then I expect that 19918 will come under fire and could lead to a good selloff. Watching to see if the open can get up through 20175 and hold otherwise will be looking for a move down into 19918 and below. The Nikkei managed to hold some higher lows and I expect that the positive end to the US session will flow over into the start of the Asian session. Watching for a spike into 26855 on the open and then will look for either continuation or failure…bias up I expect though. The DAX Index held a lower high around 14102 which will be the key I expect, for tonights action. If price can hold below, then expect a push to new lows and into 13855. I expect that the DAX will have to contend with higher interest rates crimping growth and will focus more and more on the economic data essentially following in the footsteps of the US. They need the economy to remain strong and show good numbers to offset rate rises and fend off sellers. UK 100 Index managed to push up into resistance around 7535 where it closed. I expect that price will flush higher through the level to trap some buyers before moving lower to squeeze out some bulls. If not, then a move up to 7606 is on the cards.
Cryptos continue to be weighed down and fail to put together any meaningful rally. Bitcoin flushed into 28680 before reacting up off the level. The longer price hovers around the $30K mark, I expect more ‘hodlers’ will be getting nervous. They will expect another run higher but are only seeing rallies get sold recently. If the share markets take another turn lower, then I expect it will get very bearish into the Bitcoin and Ethereum.
Spot Gold is playing out as expected with a push into 1864 on the continued USD weakness. Expect that any further weakness will see bulls add to long bets. We have to remain focused on the USD as I expect that Gold will fail if the USD finds buyers again. Crude Oil was well contained and held p off 108.78 lows. Price looks to be more range bound in the short term as traders try to figure out which way share markets are going. I expect that price will again be contained between 111.98 and 108.78 today. USD Index continued to edge lower and hold minor lower highs. It seems that the momentum lower is easing which could see buying back into the USD and a short squeeze. The key will be a data or Fed release and we have FOMC Minutes later in the US session tonight which could bring in the bulls.
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US Tech 100 Index
Hang Seng Index