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 MONDAY 5/09/22
US Indexes started the session with a rally…but then failed miserably into the close. It seemed that buyers were deceived and the initial rally was a trap of longs before the selloff into the US long weekend. The US Employment data came out better than expected which to me was inflationary and adds fuel the the ‘interest rate rise’ narrative even though the unemployment rate edged higher. According to news, concerns about the European gas crisis also weighed on the markets although that is hard to believe considering the DAX charged higher into the close ending up over 3.3%…surely traders would not have gone seriously risk on into the weekend with the energy issues they are facing and already know about. To me it is likely that inflation concerns are still forefront in traders minds and until it can be brought under control, buyers will mostly remain on the sidelines. The USD and higher bond yields into the close may reflect the continued uncertainty towards inflation. AUS ANZ Job Adverts and Retail Sales at 11:30am AEST, Caixin Services PMI 11:45am and US Bank Holiday.
Asian markets set to open weaker but may be contained with the US closed tonight. With European markets closing up prior to the US selloff, expect the DAX and UK100 to open down.
The ASX200 is expected to open FLAT after the SPI200 gave back early gains into the US close.
SPI200 (Sep) overnight futures down 16 pts to 6792
SP500 down 42.59 pts to 3924.26
NASDAQ Composite down 154.27 pts to 11630.86
Dow Jones down 337.98 pts to 31318.44
FTSE100 up 132.69 pts to 7281.19
DAX30 up 420.04 pts to 13050.27
GOLD (Spot) up $14.66 to $1712.34 an ounce
COPPER futures US session (Comex Dec) down $0.0055 to $3.4010 a pound
OIL futures US Session (Nymex Oct) up $0.26 to $86.87 a barrel
CRB Index down 0.14 pts to 284.47
AUDUSD trading at 0.6812
EURUSD trading at 0.9954
GBPUSD trading at 1.1509
USDJPY trading at 140.2000
USD Index US Session (ICE Sep) down 0.103 to 109.575
The SPI200/ASX200 started the overnight session Friday with a rally which carried over into the start of the US session. Once Europe closed then the sellers took over and sent prices lower into support. For me, the key level on the open and for today will be 6798. Watching for a grind higher off the level to squeeze some sellers out while the US is on a long weekend. If sellers can hold a lower high from open, then watching for a move down into 6769. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW spent the start of the US session dragging in buyers and trapping them before the selloff into the close. The data was a little mixed although I expect it is still very inflationary hence the late selloff. I do not expect a lot today and feel the DOW will follow the Asian and then European markets in thin trade. The US Tech 100 was much the same as the DOW with an initial trap of buyers and then squeeze down into support at 12062. Price could easily continue lower but I do not expect a lot of bearish action today with US closed for the long weekend. The Hang Seng held below 19636 and ended the US session into lows. I expect to see a flush lower into 19200 and then potentially buyers to support the level. Europe should open weaker to play catchup with the US which may weigh on the HSI into the underlying index close which remains bias down. The Nikkei has opened weaker and into support around 27415. Price action is extended so I am watching for a flush of support and then a higher low to hold for a squeeze up. If not, then we could see a move down into 27240.
Cryptos were pretty well contained over the weekend and is being weighed down today. I expect that Ethereum will grind down and then hold a minor higher low for a squeeze back up while Bitcoin looks set to flush below 19815 into 19570. If the Asian market session turns negative then BTC and ETH I expect will move lower for the session.
Spot Gold is holding 1709 for now after a rally Friday to end a negative week. Price may come under pressure as the USD has opened and flushed higher. Watching to see how buyers react around the 1709 level and whether they look to provide support or not….will depend on whether the opening flush higher on the USD is an early trap of longs or not. Crude Oil continued to come under pressure with a push into 86.40 support. Price has kicked up on the open today as bulls are tempted into longs off major support. I do expect that any rally may be minor and hold below 89.56 as I feel that the action will be choppy around support before picking a clearer direction. USD Index initially moved lower from the start of the US session before ramping back into highs. As mentioned above, price has opened stronger into highs which may be a trap of longs prior to a squeeze lower. If not, I will be watching to see if buyers hold a higher low on a pullback.
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US Tech 100 Index
Hang Seng Index
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