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 29/07/22
US Indexes brushed aside a European selloff and ramped higher into the close. GDP data out was worse than expected and shows that the US economy is contracting which one would expect would be taken as a negative by stock traders. But as US bond yields are moving down, I feel that investors are looking through the rate rises and back to a low interest rate environment where the only place for yield is the stock market…which is good for debt heavy tech. The recent few days gains are against the grain but we have to remember that in a bear market….some of the biggest rallies can happen. Even though the past two sessions have seen the broader US SP500 up over 3% and Nasdaq up over 3.5%, then daily trend is still down. Once again tech stocks are the ‘go to trade’ for the bulls. Aussie PPI at 11:30am AEST, US Core PCE Price Index (inflationary data) at 10:30pm AEST and US Revised Consumer Sentiment at 12am AEST.
Market Price Action will be tough today prices across the board on major Indexes have extended further.
The ASX200 is expected to open UP 70 points as the SPI200 ramped higher along with US markets.
SPI200 (Sep) overnight futures up 70 pts to 6861
SP500 up 48.82 pts to 4072.43
NASDAQ Composite up 130.17 pts to 12162.59
Dow Jones up 332.04 pts to 32529.63
FTSE100 down 2.98 pts to 7345.25
DAX30 up 115.73 pts to 13282.11
GOLD futures US session (AUG) up $34.30 to $1753.40 an ounce
COPPER futures US session (Comex Sep) up $0.0638 to $3.4938 a pound
OIL futures US Session (Nymex Sep) down $0.84 to $96.42 a barrel
CRB Index down 0.06 pts to 289.02
AUDUSD trading at 0.6993
EURUSD trading at 1.0196
GBPUSD trading at 1.2179
USDJPY trading at 134.2700
USD Index US Session (ICE Sep) down 0.301 to 106.030
The SPI200/ASX200 once again was ramped higher in the overnight session after flushing lower during the day. This again makes for a tough day for buyers into an even more extended market intraday. I would be very reluctant to go long unless we see a major flush lower so I am watching for a squeeze lower as with yesterdays action. (Refer to the members area for updated ASX200 charts). The DOW initially flushed lower at the start of the US session and then the ramp higher started and continued into the close. Price has extended into previous highs so may make for a boring session. Watching for a squeeze lower but I do not expect a lot until the US open. The US Tech 100 smashed up through 12630 as Tech has again become the ‘goto trade’ for investors on expectations of lower inflation and longer term rate cuts. Price is very extended so untradeable on the Buy side for me until a good flush lower…so looking for a short setup intraday. The Hang Seng was smashed lower at the start of the US session which seems to be engineered to get price down. On the daily basis, the underlying index and CFD are on support so we may see a ramp higher to squeeze out some sellers. Watching for an initial flush lower and then a higher low as buyers defend longer term support. The Nikkei retested the day sessions lows before ramping higher into the US close. Price is extended into 27960 with the minor anchor to the trend up at 27855. Watching for an opening spike and then for bulls to lock in some gains and price head lower. The DAX Index is a lot like the US Tech as price spiked into resistance so hard to trade on the long side. Watching for some profit taking from buyers off 13445. UK 100 Index squeezed shorts to spike higher into the US close. It has since reopening weaker so watching for either a pop higher and lower high around 7400 or a push into 7353.
Cryptos moved higher along with share markets are traders went risk on. Bitcoin held the 22870 zone and ramped up into 24060. Watching for a flush lower and squeeze on buyers as price is extended. If not, then the zone may hold and ramp up again. Ethereum has also extended into resistance and momentum is fading. Watching to see if the level holds and we get a squeeze lower on buyers.
Spot Gold extended up through 1743 and found buyers to hold the highs into the US close. This correlates well to further weakness in to the USD. I expect that Gold will push into 1764 highs and then potentially setup for a minor short. Longer term buyers will need to wait for a pullback and higher low potentially off a 1743 retest. Crude Oil edged up through 98.66 before failing lower in the US session. Buyers defended the 96.30 level so watching to see if it can hold as a higher low for a push back up through 98.66. Longer term, we may see a lower high hold as the US economy contracts. USD Index pushed into support and could be making a major lower high which means that a lot of long positions are set to get squeezed out of the action. This will depend on whether traders are really looking through the rate rises to expected rate cuts next year. Watching the 106.210 level to break and Dollar to head lower. USDJPY could be a big short on the horizon as there are a lot of YEN shorts stacked up and ready to be squeezed out if the USD unwinds. I expect that longer term, if we continue to see data suggesting the US economy is slowing, the pair is heading lower…just watching for a short entry setup.
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US Tech 100 Index
Hang Seng Index
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