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 TUESDAY 27/09/22
US Indexes gave up early gains from the open to fail into the close as negative global economic sentiment weighed on markets. The Pound took a beating on inflation and rate rise concern as the BOE said it would not hesitate to ‘change interest rates’ and was monitoring markets closely…in other words, they have a problem! This pressured European bonds lower as traders feel that Global Central Banks have failed to get inflation under control. The USD continues to be one way action higher and, along with rising bond yields, will continue to pressure stocks on expected future earnings weakness. USD assets took another hit as Oil and Gold were sent lower and the problem is now that they are in free fall mode with buyers remaining on the sidelines. To me, things are starting to break (ie Pound) and the market is saying that that Central Banks had their chance to tame inflation but have messed up so we can expect larger rate rises than initially expected…which in turn will hurt economic data and companies bottom line more. USD Fed Chair Powell Speaks at 9:30pm AEST, USD Durable Goods Orders Data at 10:30pm AEST, US FOMC Member Bullard Speaks at 11:55pm and USD Consumer Confidence at 12am AEST.
Asian markets held up okay in overnight trading but the pressure remains down. The SPI200 tried to run higher but failed so expecting a choppy open and bias down.
The ASX200 is expected to open FLAT to UP 5 points after the SPI200 was held up well considering the nervousness in global markets.
SPI200 (Dec) overnight futures up 17 pts to 6483
SP500 down 38.19 pts to 3655.04
NASDAQ Composite down 65.01 pts to 10802.92
Dow Jones down 329.60 pts to 29260.81
FTSE100 up 2.35 pts to 7020.95
DAX30 down 56.27 pts to 12227.92
GOLD (Spot) down $21.080 to $1622.84 an ounce
COPPER futures US session (Comex Dec) up $0.0009 to $3.2942 a pound
OIL futures US Session (Nymex Nov) down $2.03 to $76.71
CRB Index down 4.17 pts to 264.30
AUDUSD trading at 0.6456
EURUSD trading at 0.9610
GBPUSD trading at 1.0680
USDJPY trading at 144.7000
USD Index US Session (ICE Dec) up 1.148 to 114.110
The SPI200/ASX200 ramped higher in the European session in what seemed an overly aggressive rally considering other Indexes were more muted at the same time. The move up soon failed and price tested into lows holding a lower high at 6509. Key levels today are 6464 support and 6509. I expect the highs to hold and for the pressure to be down from the open. The longer term 30min ASX200 chart suggests weakness to come and is in a prime area on momentum to expand lower. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW tried to push higher up through 29657 but failed to hold below 29450 into the close. I expect to see a grind higher before another lower high holds for a flush lower. The markets are all about the USD and inflation at the moment so with Powells speech later during the European session, I expect bullish action to be capped. The US Tech 100 flushed up through highs at 11417 to trap some buyers before a move lower into the close. Like the DOW, I expect a choppy day but will be watching for a lower high to hold below 11360. The MACD is in a prime position to expand lower which could lead to a break below 11224 into new lows. The underlying index is hovering just above support which I expect to tested at some stage so remain bias down. The Hang Seng was more range bound in overnight trade holding between 17950 highs and 18046 support. Price action on the underlying index is down but extended so we may be seeing buyers step in to hold a bid. For that to play out, we need to see a move above 17950 so watching for a higher low off the level. If the area is tested on the open and holds, we could be in for a breakdown through 17775. The Nikkei also held up well as buyers supported 26478 above the day sessions close. Watching for a flush higher on the open and then a move down to test or break 26478.
Cryptos edged their way higher in overnight trading with Bitcoin holding a minor higher low at 18860 and Ethereum a minor higher low at 1314. The move up is not convincing and I expect is just dragging in buyers for another squeeze lower. Key level holding the action down on ETH is at 1352 while on BTC is at 19470.
Spot Gold has again failed miserably during the US session and held a lower high at 1648. The failure confirms the break of the Daily support area at 1677 so I do not expect buyers to want to stand in the way of the selloff anytime soon. Any move up will depend on a USD selloff which may depend on what Powell has to say tonight. Crude Oil initially kicked up to $80 to trap some buyers before failing lower and ending on session lows. I will be looking for some potential divergence with the MACD which could bring in some buyers in an oversold market….but for now the trend is down until I see a clear higher low. USD Index remains strong as traders feel that the Fed had their chance to tame inflation and now have to deal with a much bigger inflation problem. The USD is being supported at 113.093. I expect that the next move into the USD will depend solely on whether traders feel the Fed is going to get more serious or not.
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US Tech 100 Index
Hang Seng Index
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