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 THE 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 WEDNESDAY 6/07/22
US Indexes followed the European markets lower on the open but then staged a mighty bounce to end with minor gains…well the Nasdaq and SP500 did but the DOW lagged. The DOW rallied 2% off the lows while the Nasdaq rallied 3.5% up off opening lows to brush aside the negative open as tech was the goto for bargain hunters. News outlets pushed the recession narrative but the US markets did not seem too concerned, suggesting that a lot of the concern is already baked into price, although a lot of the move can be attributed to intraday algos driving prices higher…or just expectations that weaker energy prices would help free up some cash for Consumers. To support the recession fears, the USD spiked higher from the start of the European session which triggered a selloff into Oil and Gold along with the share market. US Bond yields fell on some safe haven buying while commodities felt the brunt of a stronger USD. Cryptos were also hit with the Dollar strength although also fought back off lows along with the US share markets to hold major support levels. US Jobs Data at 12am AEST and then FOMC at 4am 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 DOWN 65 points but could have been a lot worse if the US bounce did not save the SPI200.
SPI200 (Sep) overnight futures down 64 pts to 6477
SP500 up 6.06 pts to 3831.39
NASDAQ Composite up 194.40 pts to 11322.24
Dow Jones down 129.44 pts to 30967.82
FTSE100 down 207.18 pts to 7025.47
DAX30 down 372.18 pts to 12401.20
GOLD futures US session (Aug) down $37.60 to $1763.90 an ounce
COPPER futures US session (Comex Sep) down $0.1390 to $3.4280 a pound
OIL futures US Session (Nymex Aug) down $8.90 to $99.50 a barrel
CRB Index down 13.66 pts to 278.16
AUDUSD trading at 0.6799
EURUSD trading at 1.0265
GBPUSD trading at 1.1955
USDJPY trading at 135.8500
USD Index US Session (ICE Sep) up 1.401 to 106.310
The SPI200/ASX200 saw a selloff right from the open of the European session as Europe decided they were nervous about a recession. Price pushed down into 6419 before the US saved the day seeing the SPI bounce up through 6450 to end around 6479. Price is extended although it is in no mans land so the open is key. Expecting to see some chop as both Bulls and Bears have a good case. Would expect to see a sell down off a lower high as the overnight action would have spooked some already nervous traders. (Refer to the members area for updated ASX200 charts). The DOW was a tale of two sessions…the fear based selling and then the bullish market. The selloff seemed engineered to push price into major support around 30448 so buyers can ramp it back up. Price ended at 30983 which is the anchor to the move down so we I am watching for some profit taking at this level from buyers off the lows. The US Tech 100 was strong from the US open as buyers went bargain hunting. There is still the view that the economy is doing well and consumers can weather the inflationary storm. Price pushed up through 11745 so I am watching for potential profit taking and a move back below the level. If not, then watching for the level to hold and bulls continue the ramp higher. The Hang Seng was smashed down through 21570 and into 21400 before bouncing with the US. Watching for either a flush higher into 21753 and then sellers to step back in or a flush lower and then buyers to support the 21570 zone. The Nikkei also ramped back up with the US off support around 25985. Price has extended to the upside so I would expect to see a flush lower on the open and then will be watching for a higher low to build. Price is in no mans land for me so the open will be key for a direction…or whether we can expect some chop. The DAX Index was smashed down right from the open into 12490 before finding any buyers. The move down flushed out a lot of buyers so we may see a flush back into 12490 before some bargain hunters take price higher in the European session. UK 100 Index was also hit from the open and flushed straight down through 7111 before bouncing. I will be watching the 7111 level to see if sellers re-enter the action for another leg down or whether we can expect a decent corrective move back up from a higher low.
Cryptos held up well considering the carnage in other markets and the rally into the USD. The longer prices hold up off the major lows the more bulls will be convinced the next major move will be higher. Bitcoin rallied up off 19300 and into 20650 before stalling so I will be looking for a squeeze down off a lower high. Ethereum was the same as price rallied into 1169 before pausing. Watching also for a squeeze lower off a lower high.
Spot Gold took a big hit on the back of the USD spike and acted nothing like a safe haven that would have been expected. Price moved down into a daily support area around 1764 where I expect that patients will be needed for buyers as the pressure remains down. Expect some chop around the level (considering it is a daily level) before any rallied that is sustainable. Crude Oil nose dived from the start of the US session. I feel that the move down, if it was not just a back long trade being liquidated, is a major move as the Daily uptrend is now broken. Expecting more pressure to the downside after a squeeze higher to trap some sellers….unless OPEC decides to turn the taps off! USD Index spiked hard from the European open potentially on UK government concerns…although more likely due to the recession rhetoric. Price smashed up through 106 but I do expect that the move up was over cooked and will retrace into the FOMC tonight and then payrolls Friday. If we are heading into a recession, I would expect the Dollar to edge lower as expectations for rate rises are cut and buyers are forced to re-assess longs.
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US Tech 100 Index
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