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 MONDAY 25/07/22
US Indexes were lower from the open being led down by tech shares. Some rough results had investors concerned for this weeks big tech earnings and triggered some profit taking from the recent run higher. It seems that earnings are coming in better than expected (from very low levels) but are showing signs of deteriorating from the previous quarters. Data out in the US showed business activity contracted for the first time in nearly two years in July which also weighed on the sentiment from the open. US bond yields edged higher along with the USD although traders are still trying to figure out the current trading climate with economic growth slowing while the Fed is tightening and a recession is looming. Investors will be awaiting some big numbers out this week with Consumer Confidence, FOMC statement and US GDP all ready to add some volatility to the markets and may help paint a clearer picture. German ifo Business Climate at 6pm AEST.
Market Price Action is not very clean and clear so risk management is therefore more important.
The ASX200 is expected to open DOWN 5/10 points after the SPI200 gave back early gains into the US close Friday.
SPI200 (Sep) overnight futures down 12 pts to 6685
SP500 down 37.32 pts to 3961.63
NASDAQ Composite down 225.50 pts to 11834.11
Dow Jones down 137.61 pts to 31899.29
FTSE100 up 5.86 pts to 7276.37
DAX30 up 7.04 pts to 13253.68
GOLD futures US session (AUG) up $14.00 to $1727.40 an ounce
COPPER futures US session (Comex Sep) up $0.0258 to $3.3243 a pound
OIL futures US Session (Nymex Sep) down $1.65 to $94.70 a barrel
CRB Index down 0.68 pts to 281.16
AUDUSD trading at 0.6929
EURUSD trading at 1.0213
GBPUSD trading at 1.1999
USDJPY trading at 136.1200
USD Index US Session (ICE Sep) down 0.394 to 106.410
The SPI200/ASX200 managed to rally in the European session Friday before giving back the gains in the US session. Price fell 66 points to test into support before bouncing back into the session close. The 6695 resistance zone is key for me today to see if buyers can hold back above the level or whether sellers defend for a squeeze lower. (Refer to the members area for updated ASX200 charts) The DOW initially lifted off 32010 before sellers came in and sent price lower into the close. It seem more of intraday action as price did bounce back off the 31075 area. I expect that longer term traders are having a rough time adding any risk to the markets as the macro picture remains unclear. Looking for a flush lower and then rally back above 31945 off a higher low. If the 31945 level holds, then looking for a move down to 31705. The US Tech 100 also fell from the open as traders locking in some gains as price squeezed lower intraday. Buyers were happy to defend 12330 which I expect will hold tonight ahead of some big tech earnings. Watching for a grind up and pullbacks to hold. If bulls fail and remain in the sidelines, then watching for a move into 12220. The Hang Seng was under pressure during the day session and then again in the US session. Price extended the days losses below 20560 which sets up for a weak open. Expecting to see a flush higher to squeeze out some sellers before a lower high holds. The Nikkei failed a few times in overnight trade as sellers held the 27835 area before a selloff in the US session. Price moved down 360 pts before a small bounce into the US close. With the underlying index extended and set for a weak open, we may see some unwind of longs today. The DAX Index rallied up around 200 points in the European session only to turn around and fall back down 200 points in US trade. Price is ranging between 13370 and 13125 for now so watching for an early flush into 13125 to hold and a move bid to offer (13125 to 13370). UK 100 Index held below 7293 for most of European trade before a flush above to trap some buyers and then move down. I will be watching to see if a lower high holds for a move into 7218.
Cryptos were sent lower into the US close but did hold up over the weekend trading. Expecting to see some pressure lower into Ethereum off 1615 or up around 1700. ETH has opened stronger but does not have a lot of conviction from buyers for now. Bitcoin is showing more weakness off 23740 and has not opened as strong as ETH. Watching BTC for a minor grind up off 22440 to bring in some buyers before a push lower.
Spot Gold rallied into the start of US trade before falling straight back down again. I expect some more minor weakness into the USD ahead of FOMC, to squeeze out more longs, so will be looking for a minor move up in Gold. In saying that, if USD holds support, expect to see some buyers squeezed out of gold on any move below 1723. Crude Oil held support around 94.65 before rallying up off the level into the US close. Watching for an early move up to drag in some buyers before a flush down through 94.65 potentially into the 91.90 zone in coming sessions as the 97.15 level held nicely. USD Index held below 107.282 in European trade before flushing down through lows in the US session. There is a lot of data out this week that could ramp price higher but I do expect that the pressure down will continue ahead of FOMC (4am AEST Thursday). Generally, the USD has been in the process of flushing out some buyers since the previous rate statement.
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US Tech 100 Index
Hang Seng Index
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