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.
PROCESS IS KEY….DEFINE LEVELS – MARK EXPECTED PRICE ACTION – TRADE SETUPS
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 MONDAY 4/07/22
US Indexes fended off an early selloff to rally into the close and the long weekend. Bulls will take some comfort from the rally as prices look a little more buoyant on the short term timeframe and could start to squeeze out some recent sellers as longer term buyers dip their toes back in the action at the start of the new quarter. The USD fell during the US session giving back the gains from European trade after pushing up into a resistance zone around 105.700…but remains in an uptrend. US Bond yields moved lower which will be supportive for share market bulls. The next big data release will be FOMC meeting minutes Thursday and then US Key Employment Data Friday. US Public Holiday tonight. Aussie Building Approvals at 11:30am AEST then RAB Cash Rate tomorrow at 2:30pm AEST.
Expect that the US will start to focus on the coming earnings reports with a big focus on forward guidance as profit margins take a hit from higher inflation.
The ASX200 is expected to open UP 95 points and drag in bulls on the open. The ASX will be extended on the open as retail traders chase prices higher.
SPI200 (Sep) overnight futures up 96 pts to 6545
SP500 up 39.95 pts to 3825.33
NASDAQ Composite up 99.10 pts to 11127.84
Dow Jones up 321.83 pts to 31097.26
FTSE100 down 0.63 pts to 7168.65
DAX30 up 29.26 pts to 12813.03
GOLD futures US session (Aug) down $5.80 to $1801.50 an ounce
COPPER futures US session (Comex Sep) down $0.0962 to $3.6138 a pound
OIL futures US Session (Nymex Aug) up $2.67 to $108.43 a barrel
CRB Index up 0.68 pts to 291.83
AUDUSD trading at 0.6814
EURUSD trading at 1.0414
GBPUSD trading at 1.2095
USDJPY trading at 135.2100
USD Index US Session (ICE Sep) up 0.416 to 104.880
The SPI200/ASX200 saw a buoyant session in overnight trading Friday as bulls ramped prices higher into the weekend. With the US closed, I expect that it will be hard to keep the momentum up going as the ASX will open strong. I will be looking for some profit taking and move lower before potentially another leg higher. The ramp higher in the US session could easily be used to sell into by share traders. (Refer to the members area for updated ASX200 charts). The DOW was ramped higher into the US close and reacted lower off 31153. The move up may be due to some intraday sellers closing shorts into the long weekend so we may see another push lower although I do not expect to do much with the US closed. The US Tech 100 also popped higher into the long weekend which may or may not be the start of a leg higher. We will need to see how the US comes back from the long weekend. The Hang Seng moved up off 21620 after a retest of the support level at the start of the US session Friday. The price action is in a prime area for a lower high and move back down so I will need to see the opening flush, ideally up, before working off a lower high. The Nikkei had a strong move up into the US close but is in no mans land below 26420/26515 potential resistance zones. For a short, I would to see some weakness from the open to hold a lower high and the look for a move below 26164 to clear out some buyers. The DAX Index moved up off a higher low around 12745 into the US close. Price is not extended so I will be watching to see what happens on the first pullback or around 12955 resistance. Longer term price is in a downtrend but we are seeing a bounce short term. UK 100 Index like the DAX, held a higher low at 7142 which dragged in buyers into the US close. I do like the look of the price action and expect that the move up could push into 7350 so will be watching for a pullback to hold at a higher level.
Cryptos were well contained over the weekend as prices hovered around the lows. Bitcoin is holding below the $20K mark which continues to make bulls nervous. The recent spike a few days ago would have dragged in some buyers and made holders happy…although this does not mean price is going higher. We will need more price action evidence that a rally is on the cards so I will be watching for a clear higher low above $19K. Ethereum is much the same and will need to clear through 1084 before a leg up can get going.
Spot Gold had an interesting session Friday as price fell during the European session only to ramp higher at the start of the US session. The action looked clearly driven by algos wanting a test into 1784 support to trap some sellers. I expect to see a higher low hold now, as the USD could get heavy, which would see buyers into Gold. Crude Oil also reversed a move down in the US session to push back up into resistance around 109.33. I expect that the price action up may be capped into the 109.50 area so will be watching for a squeeze lower off a minor lower high. USD Index moved down off resistance around 105.700 into the US close. I expect that the short term highs are in place and buyers will be capped at 105.700 ahead of FOMC and US employment data later this week especially as US bond yields rally. Expecting some chop below resistance and potentially a push down into 104.728.
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