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 5/10/22
US Indexes had another big bullish session to beat the previous days rally and start the new week off with a mighty bang. US jobs numbers came out less than expected to add to the view that the Global economy is cooling so traders are gambling that the Fed will shift to a less aggressive stance. The early RBA surprised the ASX with a smaller than expected rate rise which sent the index spiking higher and it seems the positivity flowed over into European and US trade. It was a basic follow on from the previous session with the risk on tone into shares and a further unwind in the USD and Bond yields which sent Gold and Oil higher again. The problem I see is that markets generally do not see a ‘V-shaped’ recovery which is more or less what we have seen the last two days. I would expect a pullback to hold a higher low prior to a decent leg higher. The daily charts in major Indexes are reacting up off support levels but do remain in a downtrend. The reaction is expected considering the extended nature of price action so I am still awaiting some confirmation support will hold for the longer term. CNY Bank Holiday, AUD Retail Sales at 11:30am AEDT, NZD CASH Rate and RBNZ Rate Statement at 12pm, OPEC Meetings ALL DAY, USD ADP Non-farm Employment Change at 11:15pm AEDT, USD ISM Services PMI 1am AEDT and Crude Oil Inventories at 1:30am AEDT.
Asian markets will again open very extended making longs difficult without some kind of a pullback and hold. Hang Seng will open up very volatile and play catchup so happy to let the open play out and find a level.
The ASX200 is expected to open UP 110 points after the SPI200 had another big overnight session to add to the days gains.
Prices below as at 7:45am AEDT
SPI200 (Dec) overnight futures up 107 pts to 6803
SP500 up 112.50 pts to 3790.93
NASDAQ Composite up 360.98 pts to 11176.41
Dow Jones up 825.43 pts to 30316.32
FTSE100 up 177.70 pts to 7086.46
DAX30 up 461.00 pts to 12670.48
GOLD (Spot) up $26.25 to $1726.05 an ounce
COPPER futures US session (Comex Dec) up $0.0850 to $3.4950 a pound
OIL futures US Session (Nymex Nov) up $2.64 to $86.27
CRB Index up 7.61 pts to 280.43
AUDUSD trading at 0.6503
EURUSD trading at 0.9987
GBPUSD trading at 1.1478
USDJPY trading at 144.1000
USD Index US Session (ICE Dec) down 1.589 to 110.067
The SPI200/ASX200 continued to march higher adding another 100 points to the move up. Price is now very extended making longs difficult without some flush lower to clear out some buyers. Watching for action around 6817 on the open and expect to see an extension to the rally into 6871 on the current bullish sentiment. If not then an unwind of longs is on the cards. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW added to gains with a spike up through 29957 on the US open. Price found some sellers into the close around 30360 but I expect that this was day traders closing longs. For a move lower, I want to see a good push lower and lower high to hold ideally below EMAs but watching for the action to be heavy around 30360. The US Tech 100 also pumped higher on the US open to move and hold above 11500. Price is extended and momentum up is stalling so want to see how a pullback is treated by bulls. I expect that a move into 11710 is possible but need to see price hold above 11474 today. The Hang Seng should have a volatile open as the Index plays catchup to the bullish action after being closed. I want to see the opening action play out in order to confirm support and resistance levels and the bias of the market prior to looking for entries. Could see an opening gap up through 17660. The Nikkei continued to add to the days gains with a move up into 27310. I expect to see the open action test up into 27310 where I will look for some profit taking of longs off a lower high. The DAX ramped up through 12437 on the European open and bulls never came under pressure all session. Price is bias up in the short term which I expect will see a move into 12750 before some potential profit taking kicks in. The UK100 extended up into 7074 where we saw a reaction and some minor profit taking from buyers into the US close. Watching to see if the level holds for a squeeze lower but expect to see some chop prior to any potential move down.
Cryptos continued to edge higher with Bitcoin pushing into 20530 resistance and Ethereum trading around 1352 resistance. I do not feel that BTC and ETH bulls are enthusiastic as they could be considering the move up into share Indexes so feel that resistance may hold for now. Still, I am looking for a flush through resistance and then a potential squeeze lower.
Spot Gold again moved higher to add to gains as the USD broke support and headed lower. Price has pushed up into 1730 resistance so expecting this level to hold today but of course, this will depend on the USD which could easily see more selling to support gold bulls. Crude Oil moved higher into 86.05 resistance before bulls took their foot off the accelerator. The anchor to the move up is at 85.80 so as long as this level holds, the action is bullish and could see another higher low hold for a move up off 86.05. USD Index moved below 111.768 and into lower support around 110.198. Watching to see if this level holds and we see a reaction higher but suspect that bears are in control at the moment and another squeeze lower could be on the cards.
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US Tech 100 Index
Hang Seng Index
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