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 11/08/22
US Indexes ramped higher after the CPI release as bulls seem adamant now that the worst is now behind us. The number come out flat month on month (lower than expected) meaning the inflation may have peaked and the Fed will be able to get it under control without hurting economic growth. Also, if the cost of debt is expected to come down, we are heading to the same environment as previously….shares will be seen as the only place for yield….so its ‘risk on’ for now. Still, the trends down remain in tact in the US major Indexes but are teetering with the recent run higher, so technically, we will need more time for a clearer picture. The USD took a big hit along with Bond yields as traders look across to the other side of the rate rise cycle. I expect that the USD will come under further pressure longer term which will be good for dollar denominated assets such as FX and Commodities. Crude Oil inventories came out a lot stronger than expected which did little to push Oil down as price was supported by the weaker USD. One thing of note that may have gone under the radar was the US Budget Balance came out a lot weaker than expected meaning a bigger deficit….looks like the government has been on a spending spree last month. Japan Bank Holiday and US PPI and Unemployment Claims at 10:30pm AEST.
Market Price Action will gap up on open making longs extended but I do not expect much on the short side with the current bullish sentiment. Intraday is difficult at the moment as we consistently have to deal with an extended market…so risk should be the main focus!!
The ASX200 is expected to open UP 65 points after the SPI200 ramped higher along with global Indexes after US CPI came out unchanged for the month signally that inflation may have peaked.
SPI200 (Sep) overnight futures up 70 pts to 6950
SP500 up 87.77 pts to 4210.24
NASDAQ Composite up 360.87 pts to 12854.80
Dow Jones up 535.10 pts to 33309.51
FTSE100 up 18.96 pts to 7507.11
DAX30 up 165.96 pts to 13700.93
GOLD futures US session (Spot) down $2.11 to $1792.28 an ounce
COPPER futures US session (Comex Sep) up $0.0507 to $3.6362 a pound
OIL futures US Session (Nymex Sep) up $1.43 to $91.93 a barrel
CRB Index up 4.73 pts to 289.27
AUDUSD trading at 0.7079
EURUSD trading at 1.0299
GBPUSD trading at 1.2215
USDJPY trading at 132.9200
USD Index US Session (ICE Sep) down 1.150 to 105.102
The SPI200/ASX200 ramped higher along with the rest of the major Indexes on the CPI release. Price smashed through highs around 6938 and then 6949 and held the gains into the US close. The ASX200 will open up well extended but I do expect a flush higher before any potential profit taking. Ideally, I would like to see a flush into 6938 to hold a higher low as the markets may be bullish for some time. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW had a strong session with price spiking higher and managing to hold the gains into the US close. Price may look to consolidate around 33255 and I do expect a ramp into 33460 prior to any profit taking. The underlying index on a daily basis is still in a downtrend and up around resistance so it is bit of a make of break time. The US Tech 100 also had a solid night as bulls kept their fingers on the buy button into the close. Price action is extended but could easily go further so we need to see some reaction off resistance around 13400 prior to any sell setup and a potential long squeeze. For now, the bias is still up. The Hang Seng moved higher after a very rough day session for bulls. Price made back some of the days losses but we may be setting up for some continuation lower on the Index open. In saying that, more often than not, the obvious trade is a trap so watching for a lower high and move down through 19710 while being on guard for an early flush lower and ramp higher. The Nikkei also ramped higher after the days session losses. Price held the 27835 level from the start of the European session and moved up through 28050 during the US session. Price is holding minor higher lows as momentum is coming off so we could see an opening ramp into 28200 where I will be watching for some intraday profit taking and a move lower.
Cryptos were happy with the CPI number and the risk on sentiment of the share markets, especially Ethereum. Bitcoin spiked into resistance at 24060 before reacting lower off the levels. It also struggled a second attempt to break the level which means that it is key today for some action. ETH rallied straight up through highs at 1810 and held above the level. Hard to go long at current prices without a flush lower at the very least so watching for a minor lower high and squeeze down to clear out some buyers.
Spot Gold traded strangely considering the weakness into the USD. Price initially rallied as the USD spiked lower but then buyers disappeared and price moved down as the USD remain under pressure. It seems that no-one wants gold at the moment and we may see some profit taking from longer term bulls. For now, I will be watching for a kick into 1801 intraday unless we continue down into 1788…where the action may start to get heavy. Crude Oil after the CPI release flushed higher…then lower…and then even higher again?! Seems that the algos had some fun overnight leaving retail traders confused as to the direction. Longer term, I feel that the 88.50 support is good for a move higher especially if sentiment is pointing to a soft landing with inflation and demand remaining strong. USD Index was smashed lower obviously catching some inflation bulls off guard. The move down (and the way the Dollar eased lower off the employment data ramp) leads me to think we may have a dollar unwind on the cards. Coming economic data will be important for a further selloff into the USD. USDJPY is playing out nicely and will continue lower if the USD continues down. The potential is a good short squeeze into the JPY which will send the pair lower even if the USD moves sideways.
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US Tech 100 Index
Hang Seng Index
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