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 THURSDAY 8/09/22
US Indexes rallied right from the open as a selloff in crude oil triggered traders to be risk on into the share market. Oil fell along with the USD and Bond yields (potentially some squaring up of short positions before Powells rant) which eased concerns for higher interest rates. Bargain hunters were out in force but it may be all short lived depending on what Powell has to say ahead of the US open in the coming session tonight. ECB is out tonight where they are expected to raise interest rates by 0.75%…which will tighten an already under pressure economy. Higher ‘sticky’ inflation remains a major concern for investors but it has been a battle between inflation bulls and economic bulls as to which should be the focus. I feel that the higher inflation will as it translates to lower stock market yields as more and more cash gets tied up with corporate debt repayments. Oil took a hit as date showed Chinas export growth slowed in August which triggered demand worries…do not be surprised if OPEC has something to say about lower oil prices. JPY Bank Lending, Current Account and GDP Data at 9:50am AEST, AUS Trade Balance at 11:30am AEST, AUS RBA Gov Lowe Speaks at 1:05pm, EUR Main Refinancing Rate and Monetary Policy Statement at 10:15pm AEST, ECB Press Conference at 10:45pm, US Fed Chair Powell Speaks at 11:10pm AEST and Crude Oil Inventories at 1am AEST.
Asian markets are going to open stronger but are extended up in downtrends. I expect a choppy day but am not discounting the usual Buy The Dip mentality on the open to ramp prices higher.
The ASX200 is expected to open UP 40 Points after the SPI200 rallied in overnight trade along with the US.
SPI200 (Sep) overnight futures up 29 pts to 6752
SP500 up 71.68 pts to 3979.87
NASDAQ Composite up 246.99 pts to 11791.90
Dow Jones up 435.98 pts to 31581.28
FTSE100 down 62.61 pts to 7237.83
DAX30 up 44.53 pts to 12915.97
GOLD (Spot) up $16.44 to $1718.41 an ounce
COPPER futures US session (Comex Dec) down $0.0200 to $3.4420 a pound
OIL futures US Session (Nymex Oct) down $4.94 to $81.94
CRB Index down 6.11 pts to 276.52
AUDUSD trading at 0.6769
EURUSD trading at 1.0008
GBPUSD trading at 1.1536
USDJPY trading at 143.7500
USD Index US Session (ICE Sep) down 0.669 to 109.535
The SPI200/ASX200 had a seesaw session with a retest of the days lows before heading higher in the US session. Traders are not knowing whether to be bullish of bearish with markets getting hit hard and then ramping back to where they started. I expect the SPI200 to test into resistance around 6769 (the breakdown level from yesterdays open) and then will be watching for either continuation higher or a selloff. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW had an engineered trap yesterday below 31055 before ramping higher through the European and US sessions. Price ended up at 31571 resistance where I will be watching for the reverse trap on buyers. If not, then we could see a continuation move up to 31980. The US Tech 100 also trapped sellers short before a run higher through 12234 at the US close. Like the DOW, price is extended and may look to trap buyers before a selloff ahead of Powells speech. If not, then I still expect a pullback before another push higher. The Hang Seng held a higher low around 18918 before a squeeze higher into the US close. The underlying index is extended lower but remains in a downtrend so we may see some chop today on the open. Watching for a flush higher and then a lower high for a short. The Nikkei was all one way action higher in overnight trading. Price held higher lows and ended just shy of resistance at 27811 which I expect to be the target of an opening drive up. From there, watching to see if sellers jump back into the action as I find it hard to expect a big rally ahead of Powells speech.
Cryptos were risk on along with the share market after the previous sessions sharp move lower. Bitcoin has pushed back into potential resistance (previous support) around 19570 so watching the level for a reaction lower….may just be too obvious a level so need a lower high. Ethereum saw a much more aggressive ramp from bulls and price for me is in no mans land with ugly price action.
Spot Gold made an RTF (double bottom) around 1691 before a ramp higher thanks solely to the USD move down. Price action may look to extend on the gains but this will depend on the USDs next move. I expect that buyers may be capped into 1721 before the USD can react to what Powell has to say regarding inflation. Crude Oil took a big hit which was expected considering the number of Stop Losses that would have been below the major support zone around 86.40. Watching now for a reaction from buyers to see if we can expect a lot lower prices or not…but I would expect OPEC to have something to say first. USD Index pressed lower after moving up through 110.698. It seems that there was some rebalancing of longs and some risk being taken off the table before Powell talks. Price is pushing down into support around 109.300 which may be flushed but I expect to hold today.
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US Tech 100 Index
Hang Seng Index
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