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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 4/10/22
US Indexes ramped higher on what I expect was mostly a massive short squeeze. Bargain hunters dived into the action on hopes for a Fed pivot away from an aggressive rate rise stance. Manufacturing Activity data out was weaker than expected and showed that it slipped into contraction while construction activity was worse than Analysts predicted. Traders were quick to adjust expectations for a third 0.75% rate hike; from a 72% chance down to a 59%; as bond yields dropped along with the USD. Basically markets moved back into a risk on tone with Oil and Copper rallying while Gold spiked hard. Oil helped support the action on reports that OPEC+ are considering output cuts ahead of Wednesdays meeting…this will in turn put pressure on the inflation narrative which may cool expectations for a further rally. Markets are trying to find a level where interest rate expectations match economic growth expectations. JPY Tokyo Core CPI 10:30am AEDT, CNY Bank Holiday, AUD ANZ Job Adverts and Building Approvals at 11:30am AEDT, AUD CASH Rate and RBA Rate Statement at 2:30pm, USD Jolts Job Openings at 1am AEDT and EUR ECB President Lagarde Speaks 2am AEDT.
CLICK HERE FOR ECONOMIC DATA OUT TODAY (AEST) 4/10/22
Asian markets will gap up hard making for a very difficult open and potentially choppy. If we see an early flush lower then may look for a long setup as I expect share market investors will be enthusiastic today.
The ASX200 is expected to open UP 100 points as the SPI200 ramped higher along with the US.
Prices below as at 7:45am AEDT
SPI200 (Dec) overnight futures up 102 pts to 6554
SP500 up 92.81 pts to 3678.43
NASDAQ Composite up 239.81 pts to 10815.43
Dow Jones up 765.38 pts to 29490.89
FTSE100 up 14.95 pts to 6908.76
DAX30 up 95.12 pts to 12209.48
GOLD (Spot) up $38.06 to $1698.96 an ounce
COPPER futures US session (Comex Dec) up $0.0067 to $3.4192 a pound
OIL futures US Session (Nymex Nov) up $3.76 to $83.25
CRB Index up 4.53 pts to 272.82
AUDUSD trading at 0.6517
EURUSD trading at 0.9824
GBPUSD trading at 1.1320
USDJPY trading at 144.6200
USD Index US Session (ICE Dec) down 0.522 to 111.560
The SPI200/ASX200 spiked higher into resistance at 6582 before reacting lower off the level into the close and showing some technical divergence (between price and MACD). The open will be difficult and choppy after the Gap up so happy to wait to see if the 6582 level will hold for a grind down or break for continuation higher. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW extended higher to clear out some sellers. The key level for me today is 29578 to either hold for a squeeze lower or break for an extension up into 29725. I expect that we may get some overflow enthusiasm in the US overnight market (Asian session) for a kick up into highs before US session and flush lower. The US Tech 100 pumped up into 11289 before reacting lower into the close. The trend up off lows remains in tact so we could easily see an extension higher today. Ideally I would like to see 11289 hold and a squeeze lower. The Hang Seng underlying Index will be closed today so no trading for me. The Nikkei had a straight run higher in overnight trade to add to the days gains…seems like traders knew the US would pump higher after the early reversal. Price is extended but I am watching the 26750 level for a test/flush and potential lower high. The DAX also had a bullish session to pump higher off lows. Like the other indexes, price is extended but the trend remains up so have to be patient for further confirmation either way. The UK100 was less aggressive with the move up as I suspect they are more concerned with local economics and problems. Price may continue to grind higher with a positive Asian market session and trade up into 6961.
Cryptos opened the day weaker but managed to grind higher into the US close. There was not as much enthusiasm from buyers as with the major Indexes so I do expect price to chop sideways today. Watching both Bitcoin and Ethereum for a move lower off a lower high but I expect this will depend on what happens with the SPI and Nikkei Indexes and whether they can continue higher after the opening gap up.
Spot Gold was ramped higher in an overly strong move which, to me, shows that the overnight action was more due to a short squeeze than a reversal. Gold again is reacting purely to the USD than anything else so as long as the Dollar pressures lower, Gold should be bid higher potentially into 1710. Crude Oil did chop higher but, due to the fact it was not loaded short, we did not see the same squeeze up as with Gold and Indexes. Oil traders will be focused on OPEC output cuts and will be positioning accordingly so I expect another kick higher. If cuts do not meet expectations, then a move lower is on the cards. USD Index came under pressure but remained above the 111.768 level which I expect may be at least flushed today. Price also held a lower high around 112.660 so we may see some unwinding of longs considering the change in sentiment for interest rates although the big Employment data release later this week remains the focus.
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SPI200 Index
ASX200 Index
DOW Index
US Tech 100 Index
Hang Seng Index
Nikkei Index
DAX Index
UK100 Index
Spot Gold
Crude Oil
USD Index
Bitcoin
Ethereum
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