Charts Marked with anticipated entry setups in YELLOW and ideal setup in GREEN on market opens. 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 FRIDAY 22/07/22
US Indexes again moved higher being supported by earnings as Tesla posted better than expected earnings. The result gives confidence to investors that they can expect more to come next week into big tech. I expect the markets will be supported again tonight and early next week. Energy stocks were weak as Oil prices moved back below t he dollar level. The ECB raised interest rates for the first time in more than a decade which pressured the USD lower. Finally the ECB are admitting that inflation is a problem and that all the previous central bank support will not go unpunished. Next week will be the US Fed Reserves turn where they are expected to raise rates by another 0.75% again to try and rein in inflation. It will be interesting to see how share markets go after US earnings which is the key focus currently. Earnings have largely been better than expected although it is not took difficult when expectations were so low. Bond yields moved lower after unemployment claims came out higher than expected. UK Retail Sales at 4pm AEST, German Flash Manufacturing and Services PMI at 5:30pm AEST, UK Flash Manufacturing and Services PMI at 6:30pm and US Flash Manufacturing and Services at 11:45pm AEST.
Market Price Action is not very clean and clear so risk management is therefore more important.
The ASX200 is expected to open UP 5 pts as the SPI200 brushed aside early overnight weakness to move back into the days session highs.
SPI200 (Sep) overnight futures up 12 pts to 6689
SP500 up 39.05 pts to 3998.95
NASDAQ Composite up 161.96 pts to 12059.61
Dow Jones up 162.06 pts to 32036.90
FTSE100 up 6.20 pts to 7270.51
DAX30 down 35.34 pts to 13246.64
GOLD futures US session (AUG) up $17.30 to $1717.50 an ounce
COPPER futures US session (Comex Sep) down $0.0160 to $3.3090 a pound
OIL futures US Session (Nymex Sep) down $3.53 to $96.35 a barrel
CRB Index down 5.20 pts to 281.84
AUDUSD trading at 0.6938
EURUSD trading at 1.0228
GBPUSD trading at 1.1996
USDJPY trading at 137.3700
USD Index US Session (ICE Sep) down 0.508 to 106.445
The SPI200/ASX200 had a choppy overnight session as price initially flushed lower into 6642 before bouncing and heading higher with the US market. Price essentially ended where it started the night but the longer term momentum looks to be swinging higher. Watching for a clear out of buyers on the open (much the same as yesterday) before a rally into the close. (Refer to the members area for updated ASX200 charts) The DOW initially flushed lower to clear out some European market buyers before getting the ball rolling and moving up. Price may look to pullback before which I will then be looking for a higher low as earnings continue to support bulls. The US Tech 100 also moved higher in the US session but was well controlled. I expect that we may see a drift lower today before another flush and rally tonight. The Hang Seng took a hit during the day session before bouncing back in overnight trade. The Hang Seng is lacking conviction from both bulls and bears but I do feel that bears are winning out. For shorts, I want to see an opening flush higher and then a break lower through 20605. For longs, it is the reverse, flush lower and then rally off a higher low. The Nikkei was a clear grind during the day and then again in to the overnight session. Price is holding higher lows so is biased up. Watching then for an early flush lower and then rally off a higher low. The DAX Index initially chopped around after the ECB statement but then failed to gain clear traction either way. Investors will now have the dilemma of focusing on constrained growth from rate rises or a stronger economy. For now, I expect that 13125 will hold and see a higher low bring in bulls….unless the US takes a hit. UK 100 Index rallied off 7218 but is lacking conviction from bulls above 7269. I feel that US earnings, especially big Tech next week, is holding buyers and sellers on the sidelines until things become clearer. I will be watching for a lower high to hold for a squeeze below 7218.
Cryptos were again contained with Ethereum holding below resistance at 1615. I expect that price action will get heavier into ETH and price will hold a lower high for a squeeze on buyers. Bitcoin broke below 22870 before bouncing back above the level into the US close. I expect that this is a heads up that price wants to go lower so watching for a lower high to build.
Spot Gold saw a big bounce off the daily level as mentioned yesterday. It seems that the gold bulls are happy to jump in on expectations that there could be more selling into the USD on yield flows into the EURO. Still, for a long I would like to see a flush of late buyers and a higher low hold. Being a daily level, it could get choppy as bigger shorts unwind. Crude Oil took a hit lower and looks set for more selling today or into the European and US sessions. Watching for the 97.15 level to hold (or flush and then hold) and for a lower high to take price lower. USD Index was whipped around on the back of the ECB rate rise as buyers jumped into EUR. I expect that there may be some re-positioning into the Euro from the big end of town so we may see more pressure on the USD and continuation lower. Watch the USDJPY also as there is the possibility for a big JPY short squeeze and for the pair to move lower.
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US Tech 100 Index
Hang Seng Index
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