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 MONDAY 18/07/22
US Indexes rally hard to end the week as no-one wants to miss out on potentially buying the bottom. Traders were buoyed by strong earnings and were happy to brush aside inflation concerns. Oil was relatively contained considering the rally into share markets while the USD eased lower off highs and US bonds ended around where they started the session. The rally into the share market to me looks a little over-extended as bulls get impatient. I feel that the move higher is more attributed to a bounce than a change of momentum and a mew leg higher. The funny thing is that retail sales figures were higher which means to me that inflation will continue to edge higher and in turn the Fed will raise rates….which would generally mean pressure into shares. I would expect to see a lot of volatility into shares through the reporting season and any underperformers get punished while good releases will attract buyers. After that….we may see share markets adjust lower. Japan Ban Holiday and MPC Member Saunders Speaks Tentative. 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 55 points thanks to a nice bounce in the US into the weekend.
SPI200 (Sep) overnight futures up 57 pts to 6559
SP500 up 72.78 pts to 3863.16
NASDAQ Composite up 201.23 pts to 11452.42
Dow Jones up 658.09 pts to 31288.26
FTSE100 up 119.20 pts to 7159.01
DAX30 up 345.06 pts to 12864.72
GOLD futures US session (Aug) down $2.20 to $1703.60 an ounce
COPPER futures US session (Comex Sep) up $0.0340 to $3.2455 a pound
OIL futures US Session (Nymex Aug) up $1.81 to $97.59 a barrel
CRB Index up 4.38 pts to 277.64
AUDUSD trading at 0.6793
EURUSD trading at 1.0080
GBPUSD trading at 1.1855
USDJPY trading at 138.5700
USD Index US Session (ICE Sep) down 0.582 to 107.825
The SPI200/ASX200 had a good bounce from the open of the overnight session as bulls came out to play. Price pushed into resistance at 6559 with the anchor to the uptrend at 6538. Watching for a flush of the highs and then an early squeeze lower on buyers to put some on the sidelines. From there, it will depend on whether bulls expect the the US to again rally tonight or see some profit taking. (Refer to the members area for updated ASX200 charts) The DOW add to the previous sessions gains and moved up through 30777 and closed just below 31350 resistance. I expect price to flush higher today into 31350 and will be looking for an extended move into 31480 before a move lower to put some buyers back on the sidelines. The US Tech 100 was much the same as the DOW as price ended around a resistance zone at 11980. I expect another push higher into 12125 today, but as the move up is extended, I will be looking for a squeeze lower to clear out some buyers before potentially another leg higher. The Hang Seng continues to move lower as China contends with a slowing housing market and Banking issues. Price action is holding lower highs and ended Friday around resistance at 20338. Expecting to see a flush of the level before a continuation move lower off a lower high. With the positive US move, the open could be very choppy. The Nikkei I expect is closed for a holiday so no trading for me (chart below though). The DAX Index rallied hard again to end up around resistance at 12867. The anchor to the move up is at 12810 so watching for an early kick higher into 12940 to potentially drag in some buyers before a move down and some profit taking from bulls. Price action could easily continue up but it is extended so will at least need to see a flush lower. UK 100 Index also rallied hard off a major double bottom and is pushing up into resistance at 7191. The rally up is anchored at 7149 and is extended in the short term but the double bottom at 7015 will be very attractive to bulls and I expect will drag in more longer term swing traders.
Cryptos are lifting and finding some love although Bitcoin is lagging Ethereum. Bitcoin is holding up off 20650 and may move up into 21550 as enthusiasm for the ETH break higher flows over into BTC bulls. Ethereum had a strong spike higher over the weekend which has triggered a gap up on the CFD pricing. Watching for a push into 1255 which may lead to some profit taking and a squeeze lower.
Spot Gold remains under pressure as buyers still show no interest or commitment to a move up (Trading View Post Gold Daily Selloff). Price held the 1699 level as gold bulls were saved by a move down into the USD. Watching still for a squeeze lower into daily support around 1685. Crude Oil did move up as expected and held a higher low at 95.50 but the rally stalled at 97.75. Interesting to see that oil did not rally hard along with the share markets. Watching for a minor higher low off 97.75 support but will not be surprised to see another push lower. USD Index moved lower down through 108.550 and ended just above the 107.800 level. Price is extended down and I do not expect that bulls will give up and capitulate when economic data remains strong so expect to see 107.800 supported into the US session.
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US Tech 100 Index
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