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 THURSDAY 14/07/22
US Indexes were hit hard into the open after the US CPI came in a lot hotter (Core CPI in at 0.7% from last of 0.6%, Expected 0.5%) than expected although intraday traders managed to make back the losses into the US close. I expect we may see another delayed reaction to the data release as traders have more time to digest higher inflation and a more aggressive Fed on interest rate hikes. The USD spiked after the number but then was sold lower as many buyers locked in some gains while short term bond yields adjusted higher and longer term yields went lower…which increased the ‘yield curve inversion’ which is seen as screaming recession. I suspect that we may see some Dollar selling as many may expect that the Fed ‘has to’ be more aggressive and can not let inflation get even more out of control….which would be good for commodities. Considering that US earnings are kicking off, we may see traders punish any bad results or negative forward guidance as we have to deal with prolonged high inflation. Aussie Employment Numbers at 11:30am AEST and US PPI at 10:30pm 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 DOWN 10/15 points after the SPI200 had a rollercoaster ride in the overnight session. I expect that the unexpectedly high inflation will weigh on the markets today even though the US bounced back into the close.
SPI200 (Sep) overnight futures down 4 pts to 6515
SP500 down 17.02 pts to 3801.78
NASDAQ Composite down 17.15 pts to 11247.58
Dow Jones down 208.54 pts to 30772.79
FTSE100 down 53.49 pts to 7156.37
DAX30 down 149.16 pts to 12756.32
GOLD futures US session (Aug) up $10.70 to $1735.50 an ounce
COPPER futures US session (Comex Sep) up $0.0.295 to $3.3175 a pound
OIL futures US Session (Nymex Aug) up $0.46 to $96.30 a barrel
CRB Index up 1.92 pts to 277.94
AUDUSD trading at 0.6757
EURUSD trading at 1.0059
GBPUSD trading at 1.1892
USDJPY trading at 137.4200
USD Index US Session (ICE Sep) down 0.057 to 107.855
The SPI200/ASX200 had a yoyo overnight session as price spiked up, then all the way down into new lows, and then came all the way back again. Price settled on 6515 minor support which I expect to break today but the question is whether price action will be ramped again or not. I suspect we will see a delayed reaction and the SPI200 will hold a lower high. (Refer to the members area for updated ASX200 charts). The DOW was beatenb down after the CPI but came bouncing straight back as intraday traders worked the ‘buy’ side of the action from the US open. I expect that high inflation will weigh on the share market but there is a battle between economic growth bulls and inflation bulls…or more importantly, how much downside has been baked into the price action and is it time to go higher. The US Tech 100 was much the same as the DOW with price getting slammed hard. On the bounce, price found sellers again around 11830 and sold lower into the close. I am looking for more selling pressure tonight so will be watching for a lower high. The Hang Seng reacted well up off support around 205955 but I feel that the underlying index has more downside to come although price did end on some strong support. If that is the case, then watching for an opening flush higher and then a lower high to hold. The Nikkei ended relatively flat after the ups and downs triggered by the CPI release. Price was held below 26590 and supported into 26262. Like the Hang Seng, I expect to see more downside on the underlying index so will be watching for an opening flush higher to trap some buyers before a move down. The DAX Index held a lower high around 12820 after the bounce back up during the US session. I feel that price action is primed for another move down so I will be watching for a minor move up to hold a lower high. UK 100 Index held 7191 on the bounce and is now heading lower as the anchor to the move up has broken. Watching now for a lower high and move down into 7100.
Cryptos remain in a downtrend and continue to be treated as a risk asset as they move with the ebbs and flow of the share market. Both Ethereum and Bitcoin found some buyers after a flush into support levels after the CPI number. Prices rejected the levels and rallied up into the US close. Watching BTC for a higher low to hold and for a squeeze up through 19990 while looking for the same on Ethereum and a squeeze up through 1100. I guess it will depend on share markets in the coming sessions.
Spot Gold saw a major spike and flush down through 1723 before bouncing back harder up through 1740. I feels like many bulls are banking on the Fed raising rates harder and inflation to be tamed which means the USD should potentially move lower. If that is the case, then Gold should find more love and head higher so watching for a higher low to hold. Crude Oil held well between 97.75 and 95.50 and consolidated the lows which means there may be more downside to come. Inventory data came out positive not negative as expected so if 97.75 can hold then I expect that we will see a lower high and a move down below 95.50. USD Index did not trade as many expected and flushed the highs after the CPI release before failing below support. Watching now to see if there will be more selling to move the index lower as I suspect there could be more profit taking on long dollar positions.
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US Tech 100 Index
Hang Seng Index
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