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 SPI/N225 at 10am, HSI at 11:15/30am, DAX and UK100 at 4/5pm and DOW and USTech100 at 10:30/11:30pm .
OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 26/08/22
US Indexes had a good session as news hit that Beijing is adding stimulus to stabilise the Housing market and Banking sector. The move is another supporting step that Beijing is taking to support their economy and stop the slide lower on the Hang Seng. I expect that the news will not affect the US much but the rally was more a short squeeze into the Jackson hole Symposium than a bullish change in direction for share markets. The USD held around highs which I expect to continue as evidenced by the bounce off 108.075 (refer to chart below). Traders will be happy to hold the level until getting a clearer pic on the US Feds rate rise plans. US short term bond yields rallied while the mid to long term yields eased which I feel is just a repositioning of traders ahead of Powells speech and risk aversion…ie closing of some positions. As we get to the end of the US earnings season, focus will solely on inflation and interest rates and the economic data to come out which will help to paint the picture. Tokyo Core CPI at 9:30am AEST, US Core PCE Price Index and Prelim Wholesale Inventories at 10:30pm and US Fed Chair Powell Speaks at 12am.
It was a very strong night on the Hang Seng which I expect will support the Asian market session. The HSI will be extended but has been sold lower for a long time so a short squeeze is on the cards. The SPI and Nikkei are holding higher lows.
The ASX200 is expected to open UP 20 points as the SPI200 was supported in a bullish overnight session.
SPI200 (Sep) overnight futures up 9 pts to 6984
SP500 up 58.35 pts to 4199.12
NASDAQ Composite up 207.74 pts to 12639.27
Dow Jones up 322.55 pts to 33291.78
FTSE100 up 8.23 pts to 7479.74
DAX30 up 51.90 pts to 13271.96
GOLD (Spot) up $7.20 to $1758.65 an ounce
COPPER futures US session (Comex Sep) up $0.0562 to $3.7002 a pound
OIL futures US Session (Nymex Oct) down $2.37 to $92.52 a barrel
CRB Index down 2.12 pts to 296.75
AUDUSD trading at 0.6980
EURUSD trading at 0.9976
GBPUSD trading at 1.1835
USDJPY trading at 136.4900
USD Index US Session (ICE Sep) down 0.236 to 108.380
The SPI200/ASX200 initially sold off in European trade before being supported from the US open. The anchor to the move up is at 6963 and I expect that bulls will be active on the open to push price up into 6995 which is a longer term resistance level. I would nit be surprised to see a flush of the zone and then a fade into the close. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW spiked up into the US close to squeeze out intraday and longer term shorts. Price flushed up through 33273 but is back below the level now and I would expect more of a grind down today before potentially a higher low to hold. The US Tech 100 has been clearly buoyed and ramped higher to clear out some sellers. Price is extended and does not look convincing for a strong run higher. Watching for a grind lower into 13065 and then a retest higher low to hold. The Hang Seng ramped higher in the second session after being closed for the first. Timely news from Beijing send price action rocketing higher in hopes that all will be better with the housing market. Price is extended but could easily continue the ramp higher from the open. I would need to see a flush lower and higher low for a long entry but do expect to at least see 20390 tested. The Nikkei also made its way higher being anchored up at 28540. Price ended at a minor level and I would like to see a flush lower before a ramp up into 28835.
Cryptos were generally range bound with Ethereum holding below 1712 and Bitcoin holding around 21670. BTC is holding minor higher lows but it is not convincing for bulls so we could see a squeeze lower and retest of lows prior to any rally. ETH is much the same so any push down into 1673 and subsequent lower high could see a good unwind of longs.
Spot Gold had a kick higher on the initial USD weakness but then gave back most of the gains into the close as USD remained supported. Price is holding around the EMAs and could easily flush down back below 1754 but remain corrective. I do not expect a lot into Gold ahead of Powells speech at the start of the US session. Crude Oil could not continue up through 94.18 and found sellers to trigger and unwind of some long positions. Price is hovering around 93.05 and could extend lower…but for me it is an each way bet as the move down could be flush before another leg higher through 94.18. USD Index has broken the recent uptrend but is consolidating below the daily highs around 109.260. Expect to see chop and any flush lower supported until Powells speech….when I would then expect to see some volatility. I do expect that Powell will be careful with his words and not say anything that could trigger a selloff.
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US Tech 100 Index
Hang Seng Index
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