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. Opening times (AEST) are 10am SPI/N225, 11:15/30am HSI, 4/5pm DAX and UK100 and 10:30/11:30pm DOW and USTech100.
OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 15/06/22
I will not be trying to pick bottoms or tops today…expecting that markets will be choppy and ‘trendless’ ahead of FOMC!!
US markets fended off another selloff as some bargain hunters dipper their toes in the market. Higher PPI data kept the pressure on the market as it points to stronger inflation. Retail sales are out tonight ahead of the FOMC meeting which will be the focus for global markets. Weaker Oil took some heat out of the inflation narrative although it may just be some margin unwind ahead of FOMC. Bond yields continued to rally back into recent highs after the PPI release while Bitcoin and Ethereum toy with breaking more hearts of crypto traders as they hover around lows and hold lower highs. It will be interesting to see the market reaction to the rate rise and by how much the Fed raises…75 or 100 basis points is on the cards. UK unemployment data was up instead of down while the number of unemployment benefits claims were lower…mixed numbers ahead of Thursdays monetary policy release. All eyes will be on the FOMC rate statement out 4am AEST Thursday. US Retail Sales numbers out tonight in at 10:30pm AEST. China Industrial Production and Retail Sales out today.
The ASX200 is expected to open DOWN 55 points after the SPI200 pushed down from a positive close through the European and US sessions. It seems more likely that the spike higher into the ASX close was a short squeeze of traders who expected a bigger selloff during the day. I expect our local market to be well contained ahead of the FOMC.
SPI200 (Jun) overnight futures down 40 pts to 6637
SP500 down 14.15 pts to 3735.48
NASDAQ Composite up 19.12 pts to 10828.35
Dow Jones down 151.91 pts to 30364.83
FTSE100 down 18.35 pts to 7187.46
DAX30 down 122.64 pts to 13304.39
GOLD futures US session (Aug) down $18.30 to $1813.50 an ounce
COPPER futures US session (Comex Jul) down $0.0743 to $4.1372 a pound
OIL futures US Session (Nymex Jul) down $2.00 to $118.93 a barrel
CRB Index down 5.77 pts to 315.67
AUDUSD trading at 0.6874
EURUSD trading at 1.0415
GBPUSD trading at 1.1994
USDJPY trading at 135.4600
USD Index US Session (ICE Sep) up 0.284 to 105.250
The SPI200/ASX200 had a little spike higher into the day session close but it seems more likely that it was an intraday short squeeze than the start of a rally. Traders later sold the SPI200 back down as they await FOMC and the potential carnage that could follow. I expect that today will be contained between 6592 and 6674. The DOW edged lower although there was some intraday buyers hanging around to soak up the selling into support…potentially looking for a pop higher. Expecting to see a bit of short covering and rally ahead of FOMC and from there it will be anyones guess to market direction. The US Tech 100 held up better that the DOW and found minor support around 11258. Like the DOW, I expect that there may be a minor short covering rally ahead of the release as traders square up some positions. Hang Seng was well contained after the underlying index closed. Price held a higher low at 20898 which could trigger some buyers into action. If that is the case, then expecting to see an opening flush lower and then rally. If price instead flushes higher and then holds a lower high, then looking for a short. The underlying Index is coming off oversold conditions. The Nikkei had a minor rally, like the SPI, into the underlying index close before drifting lower through the overnight session. The underlying index is extended down so we may see some bargain hunters provide support and a short squeeze on the CFD. The DAX Index moved down into support around 13295 and continues to hold lower highs. I would expect to see a few sellers cover shorts in the European session and an intraday rally potentially into 13585. UK 100 Index came under pressure and held a lower high although buyers held price above 7167 which was the flush of previous major lows at 7162. Expecting to also see some short covering and potential chop dominate the session.
Cryptos remain under pressure as both Bitcoin and Ethereum hold lower highs. BTC is holding above the $20K mark while ETH is holding above $1000…levels crypto punters never thought they would see (in hindsight, the NFT craziness was a heads up that things were getting stupid). Expecting that both Bitcoin and Ethereum will extend lower prior to finding any support.
Spot Gold had another selloff from the start of the European session as the USD rallied. Price pushed down into the 1808 level where bulls will be hoping for support. I expect to see at least a flush of the level if we are to see a short squeeze and move up. Crude Oil rallied to flush the $123 level before failing down to 117.80 from the start of the US session. Could be some risk off ahead of FOMC or some minor margin closures as traders feel pain in other areas…ie shares. The flush and failure is a good sign that we may have seen a short term top and a squeeze lower is on the cards. USD Index continued to edge higher being supported by stronger PPI data ahead of FOMC. No reason for bulls to exit yet but I do expect to see a squeeze lower on the FOMC release. Until then, the market will be contained and potentially edge lower.
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US Tech 100 Index
Hang Seng Index