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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 WEDNESDAY 31/08/22
US Indexes moved lower after economic data pointed to continued higher inflation. The markets were telling the Fed that they need to pull their collective finger out and get inflation down which means higher rate rises and potentially faster. The USD moved up along with Bond yields after the number while Oil tumbled from highs in a move that started from the European open. It now seems that rate ‘cuts’ will be off the table for next year as many were hoping and the market will need to reprice this is which to me means moving lower. German data also showed high inflation which means the ECB will need to be more aggressive also on rate rises….putting recession fears back on the cards so expect to see more news head lines as they beat the fear drum. JPY Prelim Industrial Production at 9:50am AEST, AUS Construction Work Done and Private Sector Credit at 11:30am AEST, EUR CPI Flash Estimate Data at 7pm AEST, US ADP Non-farm Employment Change at 10:15pm AEST and Crude Oil Inventories at 12:30am.
CLICK HERE FOR ECONOMIC DATA OUT TODAY (AEST) 31/08/22
Asian markets are going to gap down into support areas making the open a little difficult. Patients for setups will be key again today. It is also the end of month so we may see some chop.
The ASX200 is expected to open DOWN 60 points after the SPI200 took a hit overnight along with the US Indexes.
SPI200 (Sep) overnight futures down 58 pts to 6860
SP500 down 44.45 pts to 3986.16
NASDAQ Composite down 134.53 pts to 11883.14
Dow Jones down 308.12 pts to 31790.87
FTSE100 down 65.68 pts to 7361.63
DAX30 up 68.15 pts to 12961.14
GOLD (Spot) down $13.21 to $1724.35 an ounce
COPPER futures US session (Comex Dec) down $0.0530 to $3.5575 a pound
OIL futures US Session (Nymex Oct) down $5.37 to $91.64 a barrel
CRB Index down 8.18 pts to 293.58
AUDUSD trading at 0.6854
EURUSD trading at 1.0016
GBPUSD trading at 1.1655
USDJPY trading at 138.7900
USD Index US Session (ICE Sep) up 0.005 to 108.795
The SPI200/ASX200 initially pushed higher into resistance before failing lower after the US data release. Price moved into support around 6856 where it was buoyed into the close. The ASX will open weaker as investors digest the higher inflation numbers and adjust portfolios. I expect that the SPI200 may add to the losses and move lower from the open so watching for a lower high to build. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW flushed lower after trapping bulls around 32310. Price moved into 31665 where it is finding some buyers. Watching the level to be tested today and potentially break as higher interest rates weigh on stock markets. We may see another trap of longs with an early rally into 31970. The US Tech 100 also trapped longs as expected into the data release and then sold lower through 12397. Sellers are holding price below for now so watching this level today to see if we get an extension down into 12190. The Hang Seng was hit hard from the open yesterday before recovering most of the losses and then failing hard again into the US close. It seems that the good news of Beijing support for shares is being brushed aside as sellers look intent of testing back down into 19200. Watching to see how sellers react around 19650 on the open and whether a lower high holds. The Nikkei gave back the days gains as bulls were trapped and had to sell back into the market. Price broke below 28055 and is holding below for now and I see this level as key today for the open.
Cryptos were weaker in the US session tracking the move lower in share markets. The USD strength is also pressuring Bitcoin and Ethereum as both are holding lower highs. BTC sold down into 19570 support and I will be watching to see if a lower high builds for another leg lower. ETH also flushed lower and is now chopping around 1544 which is key for me today to see if there will be continuation down.
Spot Gold continues to disappoint as price moved down off 1739 after trapping buyers on the run up. The anchor to the recent move down off 1739 is holding at 1726. Price is hovering around support at 1721 which I see breaking at some stage for a move down into 1715. Crude Oil had a rough session as sellers unloaded on bulls to send price down over 5%. Price did react up off 91.05 support so this will be the key level into the European open. The bias remains down as long as price holds below 93.13 but the move down is extended so expecting buyers to try and support 91.05. USD Index is in a downward channel off 109.300 in a bullish trending market. I expect that buyers will continue to support price until the Fed steps up to the plate and attacks inflation. The USDJPY is still holding below the 139.410 level and will do as long as the USD holds below highs. If the market starts to get hit hard, then I expect to see YEN safe haven buying that will squeeze out YEN shorts to send the pair lower. For now…its a waiting game for me.
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US Tech 100 Index
Hang Seng Index
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