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 29/09/22
US Indexes were all one way action from the open as bargain hunters came out to play and shorts were squeezed out of the action. The move up was triggered by the BOE saying they would intervene in the bond market in an attempt to dampen investors fears of contagion across the financial system and buy back long-dated bonds to stem the rise in Bond Yields. What we then saw was a reversal across the board and some profit taking in the USD, Oil, Gold etc…basically a big squeeze on late shorts (and longs in USD) across markets. There may be a view that the US could follow suit and replicate the same in the US bond market which triggered a selloff (long squeeze) into the USD. The rally may be short lived as a bounce in share markets was largely expected and it will be interesting to see if there will be some follow through. Ultimately, the move does not change the fact that interest rates are rising and the cost of Debt is heading higher to pressure growth. This may be highlighted by the fact the tech stocks on the US Nasdaq lagged the overall rally as Apple news weighed on the Index. I remain of the view that until inflation is heading lower, the general bias of share markets will be down. EUR German Prelim CPI All Day, CAD GDP at 10:30pm, USD GDP and Unemployment Claims at 10:30pm, NZD RBNZ Gov Orr Speaks at 11pm AEST and USD FOMC Member Mester Speaks at 3am AEST.
Asian markets will open up strong with big gaps higher on the underlying indexes making buying the open very difficult. The move up was a short squeeze in a bearish market but there could be more to come.
The ASX200 is expected to open UP 90 points thanks to a big move higher in the US which dragged the SPI200 up for the ride.
SPI200 (Dec) overnight futures up 98 pts to 6558
SP500 up 71.75 pts to 3719.04
NASDAQ Composite up 222.14 pts to 11051.64
Dow Jones up 548.75 pts to 29683.74
FTSE100 up 20.80 pts to 7005.39
DAX30 up 43.60 pts to 12183.28
GOLD (Spot) up $30.74 to $1659.97 an ounce
COPPER futures US session (Comex Dec) up $0.0970 to $3.3805 a pound
OIL futures US Session (Nymex Nov) up $3.65 to $82.15
CRB Index up 5.85 pts to 271.82
AUDUSD trading at 0.6520
EURUSD trading at 0.9738
GBPUSD trading at 1.0887
USDJPY trading at 144.1100
USD Index US Session (ICE Dec) down 1.422 to 112.625
The SPI200/ASX200 flushed down through 6436 early in overnight trading before starting the march higher. Price pushed up into 6582 into the US close and held on to the gains. If price wants to go higher, I would expect to see a flush lower on the SPI open. On the flipside, if price wants to go lower on the ASX, I expect to see price flush up through 6582 to trap longs before a move lower. I expect that ASX will be full of enthusiasm on the open but the market will be extended. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW ramped higher after the BOE news and saw close to a 1000 point squeeze higher 🤑. Question is now whether that is enough of a squeeze to clear out sellers prior to another move down or whether there will be follow through in the coming US session. I expect to see a squeeze lower in the Asian market prior to a move up. The US Tech 100 squeezed up through 11467 into the US close to trigger a clear stop level for sellers. Like the DOW, it will be the question of continuation up or not. I expect that bulls will want to hold price above 11467 for an extension higher. The Hang Seng had a big run higher off the day sessions lows to fully reverse the days losses. Price opened for overnight trade and went straight up into potential resistance at 17660. I expect to see a flush of 17660 on the open where I will be watching for either a higher low and continuation up or a lower high and squeeze back down. The Nikkei also ramped higher to take out the day session highs and reverse all the losses plus some. The CFD price saw a large adjustment lower after the close so I want to see how price opens before confirming levels and looking for a potential move.
Cryptos saw a risk on move…after the recent risk off move down 🤔…but I expect that we are starting to see some divergence and will prices fail to push back up into the highs. Watching for Bitcoin to grind back below 19470 and hold a lower high while I see Ethereum holding below 1352. Bulls will more than likely wait to see what the US does tonight before potentially adding more risk and pushing higher.
Spot Gold saw a good short squeeze thanks to the BOE news. Price spiked higher to clear out some late sellers so watching to see what happens when the buying runs out of steam. Expecting to see a grind back below 1656 before a potential lower high holds. Crude Oil rallied on the back of the USD move and as inventories came in less than expected. Expecting that price will continue to push higher if the share market bounce continues in the US session later. USD Index saw a flush up through 114.500 to trap some buyers before a squeeze lower and unwind of late longs. Price reacted solely to the BOE news and a sharp move lower was expected considering the build up of buyers. Watching now for either some follow through down or a move back up as the rate rise outlook for USD has not changed. I expect continuation higher it is just a question of how many longs need to be squeezed out prior.
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US Tech 100 Index
Hang Seng Index
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