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 FRIDAY 27/05/22 (as at 7:30am AEST)
The US markets had a big session as bulls came out to ramp prices higher right from the opening bell. The FOMC minutes pointed to a ‘flexible’ Fed on interest rate rises which was taken as ‘we are not going to raise too hard to bring down inflation’. I expect that buyers were happy as the main focus will not be on easing inflation but to buoy growth and hence stock prices. Still, the markets are thin and easily bullied by algos. The DOW has extended into a key resistance area along with other major indexes so this could bring in the sellers and short term profit taking. Data remains weak as high inflation levels bite the hip pocket as Pending Home Sales were lower than expected along with GDP while unemployment claims remain inline. Core PCE Price Index (Key Inflation Gauge for Fed) Data out at 10:30pm AEST.
The ASX200 is expected to open UP 60 points and drag in retail bulls on the open. Price is hovering just below major resistance which will be tested today.
SPI200 (Jun) overnight futures up 69 pts to 7176
SP500 up 79.11 pts to 4057.84
NASDAQ Composite up 305.91 pts to 11740.65
Dow Jones up 516.91 pts to 32637.19
FTSE100 up 42.17 pts to 7564.92
DAX30 up 223.36 pts to 14231.29
GOLD futures US session (Aug) up $1.40 to $1853.90 an ounce
COPPER futures US session (Comex Jul) up $0.0187 to $4.2732 a pound
OIL futures US Session (Nymex Jul) up 3.76 to $114.09 a barrel
CRB Index up 4.09 pts to 318.66
AUDUSD trading at 0.7097
EURUSD trading at 1.0731
GBPUSD trading at 1.2605
USDJPY trading at 127.1100
USD Index US Session (ICE Jun) down 0.307 to 101.770
The SPI200/ASX200 were both ramped higher from the start of the European session in what seemed to be a pre-planned rally. Price pushed straight up into major resistance which has previously held well. The open will be bullish from retail but I will be happy to see the dust settle a bit before the setups play out. Watching for a short and squeeze on buyers. The DOW pumped up into major highs around 32720. Price is extended and could see some profit taking from buyers. Expecting to see the level flushed into the US open and then fade lower off a lower high. The US Tech 100 rallied hard but price is in no-masn-land for me. If it is to continue higher then I would want to see some consolidation around these highs to drag in some shorters before a squeeze up into 12540. Hang Seng ramped up and through the 20302 level in a very bullish move. This was expected after the 19915 held earlier in the Asian session. Price is extended but I expect to see a flush higher on the open into 20768. If the level holds then I will be looking for a lower high and short. If price consolidates, then we may see an extension into 21210 which could be another hard and fast move. Its going to be a strong gap up on the underlying index which I expect to extend into the 20735 area. The Nikkei rallied up and through 26855 and I expect the open to drive up into 27105 resistance. From there I will need to see more action play out to gauge whether the level will hold or fail. The DAX Index was open (Bank holiday does not always means markets are closed) and ramped up into 14280 where price stalled into the US close. I expect to see a flush higher on the open to trap some buyers before a squeeze lower. UK 100 Index continues to be choppy but biased up after price pushed and held above 7535. This move opens the door to a test into 7606 which could play out tonight ahead of the US data release and open.
Cryptos came under some pressure and spiked lower as sellers target more stop losses. Is this a prelude of what is to come? I feel that a major selloff was saved by the share market rally. Bitcoin flushed below 28680 but rebounded in a show of strength. If price again holds a lower high, then watch for buyers to finally give up and price to capitulate. I expect that BTC needs to hold above 28680 otherwise there is trouble. Ethereum is looking heavier as price flushed into 1716. It did react high which is a good sign but there may not be any follow through from buyers as price is holding below 1909 for now.
Spot Gold moved around in the opposite direction to the USD swings. I am watching for a higher low to hold and price to move up through 1853…need to see USD break down and hold below support. Crude Oil ramped higher as buyers took control. Price broke up through 111.40 which trigger buy stops for the spike up. Price is extended so for any long, I would prefer to see a flush of buyers and a higher low. I expect that price will fade into 112.70 into the US open. USD Index held a test back up into 102.380 before moving back down into lows around 101.680. This will be the key level today to either show signs of holding or signs of failing. A break below and then lower high could see a further selloff. The USD is being weighed by the uncertainty of the US Fed Reserves aggressiveness towards inflation and rate rises. The inflationary data release tonight, ahead of the US open, will be telling.
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US Tech 100 Index
Hang Seng Index