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 14/09/22
US Indexes took their biggest one day hit for a long time as higher inflation finally caught up with the bulls and the rug was pulled from beneath their feet. The CPI numbers out were higher than expected and shows that the inflation is not just due to supply bottlenecks that many hoped, but also due to excessive spending and stimulus which means that inflation is a lot ‘stickier’ than many expect. The next focus will be just how aggressive the Fed will need to be to stem higher inflation and what that means to the rate rise plan. I expect that there will be more re-adjustment from risk across the board in global share markets. The USD showed just that as shorts were caught off guard and squeezed out on a big spike and a stampede to safe havens. The USD also benefitted from a yield perspective (interest rate differentials) when compared to the yield on other major pairs such as AUD, EUR and GBP. Bonds also highlighted higher rate rise expectations as yields spiked and adjusted higher after the number…question is whether shares still have some catch up to do as they neglected earlier signs from the Bond market. GBP CPI and PPI data at 4m AEST, US PPI Data at 10:30pm AEST and USD Crude Oil Inventories at 12:30am.
Asian markets are going to take a big hit on the open and will be extended lower. Expect that any long or short will take patience to see setup.
The ASX200 is expected to open DOWN 155 points after the SPI200 took a beating in overnight trade.
SPI200 (Sep) overnight futures down 159 pts to 6850
SP500 down 177.72 pts to 3932.69
NASDAQ Composite down 632.84 pts to 11633.57
Dow Jones down 1276.37 pts to 31104.97
FTSE100 down 87.17 pts to 7385.86
DAX30 down 213.32 pts to 13188.95
GOLD (Spot) down $22.45 to $1702.31 an ounce
COPPER futures US session (Comex Dec) down $0.0800 to $3.5305 a pound
OIL futures US Session (Nymex Oct) down $0.47 to $87.31
CRB Index down 1.85 pts to 285.77
AUDUSD trading at 0.6735
EURUSD trading at 0.9968
GBPUSD trading at 1.1492
USDJPY trading at 144.5900
USD Index US Session (ICE Dec) up 1.524 to 109.620
The SPI200/ASX200 was hit hard after CPI data came out, paused momentarily around 6948 and then fell to 6848 into the close. Price action is extended but going long off this level prematurely is very dangerous. Watching for the market to show its hand first before any setup but expect that bears will be in force today. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW fell off a cliff with price sinking nearly 700 points the first minute after the data release. Price action was under pressure all session as bulls realised they had it wrong and unwound long positions from the previous few days. Watching to see if buyers start to step in around 31035 for a short squeeze. The US Tech 100 was also smacked down WWE style into 11980 with little to no let up from sellers. As with the DOW, it was a big unwind of risk as investors (bargain hunters) were squeezed out of the action. Watching to see if 11980 can provide some support today into the US open. The Hang Seng took a hit from 19380 to push down towards the 18795 support area which I expect will be tested on the open today. Watching the level to see if buyers provide support for a ‘late’ short squeeze or whether there is more selling to come. The Nikkei also took a hit after a rather contained day session. From the days price action, looks like the selling was expected as bulls were kept happy with higher lows but rallies failed. Like the Hang Seng, watching support around 27865 to see if buyers are willing to bargain hunt and provide support or not.
Cryptos saw an unwind of recent longs as both Bitcoin and Ethereum sank lower. ETH kicked up into 1764 resistance before sinking while BTC failed off 22600. I expect that we will see more selling pressure today and any rally will be capped and any buyers to be fodder for another move down.
Spot Gold took a big hit as the USD ramped higher leaving any safe haven buyers scratching their heads. Price is being held down at 1706 after reacting up off 1696 so watching for further selling pressure today if 1706 holds. Crude Oil fared the selloff well as price bounced up off 85.05 to minimise the losses. As the 89.30 zone has held well, I am watching for a lower high to build around current levels as traders assess a higher interest rate environment and what that means to demand. USD Index had a big spike higher after the CPI release as traders re-adjusted positions to reflect a potentially higher interest rate environment. Watching to see if 110.290 provides some resistance or whether the USD is heading higher.
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US Tech 100 Index
Hang Seng Index
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