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 THURSDAY 28/07/22
US Indexes moved sharply higher after the US Fed raised interest rates by 0.75% to 2.50% as expected. By the reaction of the spike into the US close, it seems that many anticipated a 1% rise although the Fed did say that they will likely need a bigger rise next time around. It also had the signs of an algo driven short squeeze into resistance levels…which could be a setup for a delayed reaction lower tonight…we will see! Tech initially pushed higher from the open thanks to better than expected earnings from Alphabet and Microsoft. Later, tech added to gains after Powell said “As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases…” which would be an obvious statement although all the market needed to hear for the intraday short squeeze. Short term bond yields moved lower while mid and long went higher…a sign that the Fed may not have quite convinced the bond market that they have inflation under control and will need to raise rates aggressively again. Aussie Import prices and Retail Sales at 11:30am AEST, US GDP and Unemployment Claims at 10:30pm AEST and Yellen Speaks later in the session (time unknown).
Market Price Action will be tough today prices across the board on major Indexes are extended. I would expect to see a flush lower prior to any leg up…if not, a scalping mindset may be needed.
The ASX200 is expected to open UP thanks to a ramp higher in the US into the close after the Fed interest rate hike.
SPI200 (Sep) overnight futures up 52 pts to 6775
SP500 up 102.56 pts to 4023.61
NASDAQ Composite up 469.85 pts to 12032.42
Dow Jones up 436.05 pts to 32197.59
FTSE100 up 41.95 pts to 7348.23
DAX30 up 69.45 pts to 13166.38
GOLD futures US session (AUG) up $14.70 to $1732.40 an ounce
COPPER futures US session (Comex Sep) up $0.0865 to $3.4710 a pound
OIL futures US Session (Nymex Sep) up $2.28 to $97.26 a barrel
CRB Index up 2.58 pts to 289.08
AUDUSD trading at 0.6993
EURUSD trading at 1.0200
GBPUSD trading at 1.2157
USDJPY trading at 136.5800
USD Index US Session (ICE Sep) down 0.704 to 106.340
The SPI200/ASX200 , like other major indexes, was determined to ramp higher after the FOMC statement release. Price rallied around 40 pts into the US close so we will have to deal with an extended market and some excited retail investors on the open. I want to see highs hold and a short off a lower high before contemplating longs. If we see a flush lower and then a higher low start to hold, there may be a scalp opportunity long. Longer term, the ASX has pushed into major resistance (Refer to the members area for updated ASX200 charts). The DOW extended up through 32220 to flush the level into the US close. I would expect to see some heat come out of the rally and a squeeze lower prior to any long setup so watching for a minor lower high off 32220. If not, then watching for another spike higher. The US Tech 100 spiked up into 12630 highs into the US close and price action is extended on the short timeframes. Like the DOW, I would need to see a squeeze lower to flush out some buyers prior to any long so watching for a minor lower high and short off 12630…things may of course change into the European market open. The Hang Seng was generally range bound between the days highs and lows until the final ramp up into the close where it ended around 20780 resistance. I feel that price wants to have a run higher so watching for a higher low ideally off an opening flush lower first. The Nikkei held a higher low during the Asian market session and added to the gains in overnight trading to end above previous highs at 27960. Like other major Indexes, price is extended and may need to squeeze out some buyers prior to another leg up. The underlying Index is expected to open up over 250pts which makes for an interesting open. The DAX Index also extended higher in the final hours of the US session and ended up around minor highs at 13245. I expect the level to be flushed and will be looking for a long as the underlying index has been consolidating recent gains off major support. UK 100 Index moved up through 7353 during the European session and held the gains into the US close. The momentum is up although running out of steam. Key level is 7353 to see if price consolidates above in preparation for another push higher or whether price falls back below the level for a squeeze down.
Cryptos were already heading higher off support levels before getting an extra nudge higher after the FOMC rate hike. The risk on move into Bitcoin and Ethereum extended prices up into resistance levels where I would expect to see some minor profit taking. ETH may extend on the move up into 1700 although price is hovering at resistance of 1615 while BTC is hovering around 22870 resistance so watching both for a lower high and long squeeze lower.
Spot Gold ramped higher as expected but not before flushing out some buyers on a push below 1717. Price ramped up with the selloff into the USD and found sellers into 1739. As price is extended up on Gold and down on the USD, there is potential for a squeeze lower. If not, then a scalp long could be an opportunity on a push into 1743. Crude Oil lifted from the start of the US session, up off 94.64 and into resistance at 98.66. For longs, I need to see a break up and through 98.66 and then a retest and hold on shorter timeframes. For shorts, I want to see a lower high below 98.66 for a squeeze on buyers. USD Index flushed 107.282 before being dumped into support around 106.429. The USD remains range bound for now between 106.429/106.210 and 107.282. I feel that the move down may have been over cooked considering that the Feds view has not really changed and a 0.75% rate rise is on the cards for next FOMC. I would be prudent to watch any coming inflationary date to see if inflation is showing signs of coming under control.
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US Tech 100 Index
Hang Seng Index
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