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 WEDNESDAY 3/08/22
US Indexes saw a few nervous traders as US-China tensions weighed on the action. The major Indexes ended in the red with the DOW taking the lead. Jobs data out was weaker than expected and may be a heads up for what we can expect Friday with US payrolls. The softening in job openings will eventually translate into cooling wage growth and easing retail spending which will pressure the stock market….if employment numbers show weakness then it seems a matter of ‘when’ not ‘if’ a recession will happen and how deep. Nancy Pelosi’s arrival in Taipei has stirred up the Chinese and got them jumping up and down which weighed on market sentiment and triggered some profit taking and safe haven buying into the USD. The rally into the USD pressured risk assets and commodities lower. US ISM Services and Factory Orders at 12am AEST and Crude Oil Inventories at 12:30am AEST.
Market Price Action remains choppy as the US reluctantly backs away from the recent highs making Risk management essential intraday!
The ASX200 is expected to open DOWN 5/10 points after the SPI200 was supported through European trade and rallied into the start of the US session before giving up the gains again to end slightly lower.
SPI200 (Sep) overnight futures down 11 pts to 6896
SP500 down 27.44 pts to 4091.19
NASDAQ Composite down 20.22 pts to 12348.76
Dow Jones down 402.23 pts to 32396.17
FTSE100 down 4.31 pts to 7409.11
DAX30 down 30.43 pts to 13449.20
GOLD futures US session (Sep) down $10.70 to $1762.00 an ounce
COPPER futures US session (Comex Sep) down $0.0705 to $3.4720 a pound
OIL futures US Session (Nymex Sep) down $0.04 to $93.85 a barrel
CRB Index down 2.40 pts to 283.70
AUDUSD trading at 0.6918
EURUSD trading at 1.0164
GBPUSD trading at 1.2165
USDJPY trading at 133.1700
USD Index US Session (ICE Sep) up 0.839 to 106.175
The SPI200/ASX200 rallied early again and seemed to be supported well before selling off in the US session to give back all the gains. Price held a lower high at 6909 and has support around 6889 and 6883. Watching to see if sellers jump into the action from the open or if buyers provide support for the squeeze up into 6909 and higher. (Refer to the members area for updated ASX200 charts). The DOW had a choppy session as bulls and bears fought it out and it was only due to some safe haven buying that risk assets moved lower. Traders will be assessing whether the US/China tensions are anything to be seriously worried about, so until then, I expect more chop. The US Tech 100 held up better than the DOW as price reacted down off 13080. The double top may trigger more profit taking and continuation down but until the 12772 level is broken, we may just see some sideways chop. The Hang Seng found some support into 19518 before moving up through 19773 to clear out some sellers. The underlying trend is still down so watching the open to see if price wants to contract further (go up) or start a new leg down. The Nikkei was also happy too rally hard in the European and US session and I expect that bulls will be excited on the Index open. Watching to see of the 27712 area holds for a move back into the overnight highs around 27935. The DAX Index tested into 13348 early which provided support for the move up through 13440. Even with the current headwinds, the DAX (and other major markets) remain bullish so watching for the 13415 level to provide support for another leg higher. If not, then I expect another move down into 13348. UK 100 Index had a choppy session where both buyers and sellers were happy to play a ‘wait and see’ game leaving intraday traders to have their fun. The 7389 level provided support while resistance held at 7415. I expect that price will hold the range and potentially test back into the highs. If not, we may see a good move down through 7375…although this will depend on how US/China tensions play out.
Cryptos were under pressure during the European session before finding buyers during US trade. Both Ethereum and Bitcoin found some support but buyers do look tentative. Expecting that both will struggle to find buyers and will hold lower highs to break down through support.
Spot Gold kicked up into 1783 resistance before failing lower back down into 1759. Watching to see if price finds buyers at 1759 for support or Gold heads lower omto the 1743 area before buyers are willing to step in and provide some support. Will depend largely on what the USD does from here. Crude Oil spiked up into 96.30 before failing lower into the US close as share markets fell and the USD rallied. The key outlook for Oil is whether demand will ease as economic growth slows which I expect is being factored into the action now. Watching for a flush higher to trap some buyers before a move down off a lower high. USD Index rallied from in the Asian market session and the move up continued into the US close. There was some safe haven buying that supported the action so we may see some unwind today of tonight if tensions between the US and China ease which I expect. If not, then onwards and upwards for the USD. USDJPY bounced nicely off the 131.451 area as the USD rallied. Watching now to see if a lower high can hold and if the USD move up was overdone. Would ideally like to see price test into 134.515 and then fail.
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US Tech 100 Index
Hang Seng Index
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