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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 WEDNESDAY 20/07/22
US Indexes rallied hard after positive earnings boosted investor sentiment. Tech shares led the charge in an early ramp ahead of major tech earnings next week. The three major indexes come out of the gate strong and kept the buying pressure up into the close. Investors were happy to see the earnings beats but that is nothing new in US earnings as they generally provide lower outlooks initially. Earnings beats have given investors some confidence that tighter monetary policy and inflation is not impacting revenue as much as feared but it is still early days and the rally is more due to prices coming off lows than companies coping with high inflation. I suspect that when higher interest rates start to bite, investors will have to re-assess. As I mentioned yesterday, the days of inflated stock market returns are gone and we will need to be more selective with entries and vigilant with risk. Aussie Monetary Policy Meeting Minutes at 11:30am AEST, RBA Deputy Gov Bullock Speaks 12pm AEST and BOE Gov Bailey Speaks at 1am AEST.
CLICK HERE FOR ECONOMIC DATA OUT TODAY (AEST) 20/07/22
Expect that it will be tough intraday trading conditions with markets extended but bullish. Expect many traps and chop around highs. RISK MANAGEMENT WILL BE VERY IMPORTANT TODAY.
The ASX200 is expected to open UP 80 pts as the SPI200 was ramped up along with the US markets.
SPI200 (Sep) overnight futures up 79 pts to 6626
SP500 up 105.84 pts to 3936.69
NASDAQ Composite up 353.10 pts to 11713.15
Dow Jones up 754.44 pts to 31827.05
FTSE100 up 73.04 pts to 7296.28
DAX30 up 348.60 pts to 13308.41
GOLD futures US session (Dec) up $0.50 to $1710.70 an ounce
COPPER futures US session (Comex Sep) down $0.0530 to $3.2930 a pound
OIL futures US Session (Nymex Aug) up $1.62 to $104.22 a barrel
CRB Index down 1.07 pts to 285.47
AUDUSD trading at 0.6899
EURUSD trading at 1.0230
GBPUSD trading at 1.2001
USDJPY trading at 138.1800
USD Index US Session (ICE Sep) down 0.691 to 106.540
The SPI200/ASX200 moved through European and US trading to end on higher above 6618. Expecting to see some opening enthusiasm from bulls but also a choppy open. Expect that a good move lower will be hard considering the sentiment while price will be extended on the open meaning a good run higher will be tough. Wanting to see a flush of late overnight buyers and a higher low to work from (Refer to the members area for updated ASX200 charts). The DOW ramped up into 31855 where price is very extended and potentially has factored in too much positive sentiment. Being more a short term market, I expect to see some gains locked in and price to squeeze lower. The US Tech 100 is also very extended but did push above 12225 which may be a good sign that a ramp into 12455 is on the cards. Want to see some late buyers squeezed out of the action but evidence that buyers are soaking up the selling to hold a higher low. The Hang Seng grinded lower yesterday off previous sessions highs and has since moved back up to the same levels around 20930. Watching the opening flush which I expect could be higher and then a lower high to squeeze out some buyers. The index is set to open into resistance around 20865 so may make the open choppy. The Nikkei index will open strong with an expected open of +400pts. Price will be extended on the open with the CFD stretched into 27450. I expect to see a flush higher and then squeeze lower but for any long, I will need to see a higher low hold first. The DAX Index ramped up into 13375 at the start of the US session and held the gains into the close. The anchor to the uptrend is at 13250, so as long as this level holds it is a bullish market. UK 100 Index was all one way action up (like most markets) from the European open and into the US close. Price action is extended but looking to flush into 7353 as higher lows hold. For me, I am happy to work off 7353 or 7269…but for now price is midrange.
Cryptos continued higher as share markets went risk on. Bitcoin moved above 22870 and, like other markets, is extended. Watching BTC to see if price can hold above 22870 or whether we see some profit taking and a move lower. Ethereum spiked up at the start of the Asian market session and then grinded higher as momentum up eased. Price is anchored up at 1455 and I expect a continued grind into the 1700 zone.
Spot Gold still giving nothing away and choppy both sides of the market. Price is contracting in as it holds higher lows and lower highs so we should expect a break soon….its just whether there will be some follow through. The USD did move lower although Gold struggled to get any traction higher. Crude Oil held another higher low around 97.15 and is now pushing into 101.85 resistance. Watching for a higher low off 101.85 although I still expect that the trend up will continue with the bullish sentiment into the share market. USD Index moved lower to break down through 106.760 support. Many news feeds saying that longs are not factoring in a 1% rate rise now…although I feel that they never were. I expect that the movement down is due to profit taking with a lack of near term catalysts. With continued consumer spending, inflation will remain high meaning the Fed may need to be even more aggressive…ie a higher dollar. But for now, we are in a pullback mode with the daily trend remaining up.
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SPI200 Index
ASX200 Index
DOW Index
US Tech 100 Index
Hang Seng Index
Nikkei Index
DAX Index
UK100 Index
Spot Gold
Crude Oil
USD Index
Bitcoin
Ethereum
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