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 off TD365.com. 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 TUESDAY 12/07/22
US Indexes found weakness from the open after a lacklustre session in Asian and European markets. The USD strength is the big story at the moment as it is pressuring currencies and commodities denominated in USD. The move up has become a big momentum trade as not much has changed with the regards to the inflation and interest rate outlook. Trader will therefore be watching the CPI numbers out in the US Wednesday night when there may be the situation that dollar longs are squeezed. I expect that share markets took some risk off the table ahead of the start of earnings where a lot is uncertain. Generally the US undershoot outlooks in order to beat on earnings so I expect that there will be more of the same although the ‘beats’ may be contained. The higher USD will weigh on earnings from multinationals which could disappoint expectations. The Forward Guidance will be the market movers I suspect….just which way is the unknown. BOE Gov Bailey Speaks 12:15am 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 10/15 points although I expect that the ASX will come under pressure considering the US was down.
SPI200 (Sep) overnight futures up 18 pts to 6521
SP500 down 44.95 pts to 3854.43
NASDAQ Composite down 262.71 pts to 11372.60
Dow Jones down 164.31 pts to 31173.84
FTSE100 up 0.35 pts to 7196.59
DAX30 down 182.79 pts to 12832.44
GOLD futures US session (Aug) down $10.60 to $1731.70 an ounce
COPPER futures US session (Comex Sep) down $0.0982 to $3.4238 a pound
OIL futures US Session (Nymex Aug) down $0.70 to $104.09 a barrel
CRB Index up 0.02 pts to 287.78
AUDUSD trading at 0.6734
EURUSD trading at 1.0039
GBPUSD trading at 1.1892
USDJPY trading at 137.4300
USD Index US Session (ICE Sep) up 1.199 to 108.020
The SPI200/ASX200 was held in a range between 6542 and 6514 on the SPI200 after a selloff during the day session. The two levels of interest for me are 6542 and 6514…namely 6514 on the open. If price breaks strongly below 6514, then I expect another session dominated by sellers. If the level can hold, we may see a move up to 6542 and higher. (Refer to the members area for updated ASX200 charts). The DOW saw another choppy session through European and US trading after moving lower during the Asian session. An break below 31122 will confirm a lower high so I will be looking for continuation down on the lower timeframe charts. If the level holds, then a squeeze higher is on the cards. The US Tech 100 moved lower and looks ready to continue down through 11830 and 11740. I will be watching for a lower high to hold for the short entry setup but expect not much to happen until the start of European trade. The Hang Seng took a big hit lower yesterday during the Asian session and sellers kept the pressure on until the US close. The underlying index is correcting lower so could see some continuation down today. If that is the case, I would ideally like to see an opening flush higher on the CFD and then a lower high. I suspect we may flush lower on the open and the look to squeeze out some shorts on a move up and then potentially see a move down in the second session. The Nikkei made its way lower all session and is pushing down into 26530 ahead of the open. Expecting to see a flush down into the support area before a squeeze higher. If not, I expect to see continuation down off a lower high. The DAX Index ramped on the European open only to give way to sellers later but did hold between 12940 and 12816. The price action is not very clear but I do expect it to get heavy and be biased to the downside. UK 100 Index held a test into 7205 but did not see the pressure as the DAX as they are talking up inflation while the Eurozone struggles. Still, the picture looks ready for expansion down so I will be looking for a momentum move lower off a lower high.
Cryptos took a hit after the US close as Ethereum and Bitcoin were pushed lower towards support levels. Longer term, both are seeing prices hold in a range which is concerning if you are a bull. Both recently saw a spike up to trap some buyers before moving lower to squeeze them back out. Watching Bitcoin for a move into 19800 before buyers potentially provide support and Ethereum for a move into 1080.
Spot Gold is stuck in a range and edging lower as the USD continues its momentum push higher. Not really interested in Gold at the moment as I do not see any significant move unless the USD drops from highs…then I expect that action to pick up. Crude Oil may be setting up for a move lower technically but the selling pressure is being soaked up. Price managed to move up against the flow of the USD higher which should have pressured oil. Watching for a reaction higher off 102.37/101.59 as I feel Oil wants to be higher. USD Index is basically a momentum trade at the moment as major fund flows continue to pressure price higher. For now I expect to see higher prices purely on momentum not due to any change in expectations for inflation and/or interest rates. With CPI out tomorrow night, this could change the course of the dollar but I expect it will need to come in a lot weaker. Also, when the dollar decides to move lower…there are a lot of longs built up that will make the move down volatile.
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US Tech 100 Index
Hang Seng Index
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