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 (AEDT) for underlying indexes are SPI200 at 10am, N225 at 11am, HSI at 12:30am, DAX and UK100 at 6pm and DOW and USTech100 at 12:30am .
OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 12/10/22
US Indexes ended down as they gave back early gains in a session largely dominated by day traders. Markets were happy to chop around in a range ahead of the key CPI report Thursday with neither side willing to commit to the action. Investors looked happy to remain on the sidelines as price action remains heavy. FOMC Mesters comments pointed to the need to keep tight monetary policy and stay the course for aggressive rate rises. The comments kept the pressure on bond prices through supporting higher yields while the USD spiked higher off support. The Pound took a late hit as BOE’s (Bank Of England) Bailey says there is serious risk to UK financial stability and intervention will be temporary…told Funds to get there act together and unwind bad bond positions to prevent a fire sale hitting the bond market and driving up interest rates and the cost of debt. It seems that the general consensus is that Fed Reserves do not have inflation under control as bulls go quiet…which to me points to a lot more downside potentially capitulation…but tonights PPI and then CPI will be telling. GBP GDP, Goods Trade Balance and Industrial Production 5pm AEDT, GBP MPC Member Pill Speaks 10:35pm AEDT, USD PPI Data 11:30pm AEDT, EUR ECB President Lagarde Speaks at 12:30am AEDT and USD FOMC Meeting Minutes 5am.
Asian markets will be weaker on the open and I expect a choppy session with rallies to be capped. I do not expect to see a trend day either way and will look for a range market as longer term investors stay out of the action.
The ASX200 is expected to open DOWN 20 points after a choppy overnight session for the SPI200.
Prices below as at 7:45am AEDT
SPI200 (Dec) overnight futures down 22 pts to 6621
SP500 down 23.55 pts to 3588.84
NASDAQ Composite down 115.91 pts to 10426.19
Dow Jones up 36.31 pts to 29239.19
FTSE100 down 74.08 pts to 6885.23
DAX30 down 52.69 pts to 12220.25
GOLD (Spot) down $1.91 to $1666.20 an ounce
COPPER futures US session (Comex Dec) down $0.0100 to $3.4205 a pound
OIL futures US Session (Nymex Nov) down $1.78 to $89.35
CRB Index down 1.10 pts to 281.96
AUDUSD trading at 0.6270
EURUSD trading at 0.9704
GBPUSD trading at 1.0971
USDJPY trading at 145.8100
USD Index US Session (ICE Dec) up 0.099 to 113.170
The SPI200/ASX200 moved between support at 6604 and resistance at 6670 as there was a lack of commitment for a clear move. The action ended down on lows so I would expect to see a flush below 6604 on the open and then for price to push back up into the range off a higher low. I do not expect a further selloff yet as traders await for more info on inflation in the US. Still, the ASX200 is bias down and could easily take a hit later in the week. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW again lacked any real conviction with the intraday trading dominated by algos and day traders. Price pushed up off support early but then gave back gains into the close. Watching for a grind higher but for 29480 to hold the action down ahead of PPI when things could change quickly. The US Tech 100 was much the same as the DOW with early gains giving back into the close. Price action remains heavy and any push below 10745 will see a selloff. Watching for 10745 to hold ahead of PPI and feel that the market may want to squeeze out some sellers with a move up prior to CPI release. Hang Seng flushed lower into the close (which is earlier than the US close) to continue the trend down. The underlying index remains under pressure so watching for any rally to be capped and sellers to remain in control. The Nikkei held a support area at 26305 but was very heavy into the close as any intraday longs were squeezed out. Watching for an early flush below 26305 to clear out some stops and trap some sellers prior to a squeeze higher. The DAX was also choppy and held support at 12125 while and rally was capped into resistance at 12273. The current bias remains down so watching for a grind up early and then a lower high to hold. The UK100 also came under pressure which I expect to continue after comments from the BOE on the local Bond market problems. I do not expect investors to provide much if any, support so will be watching for a lower high and continuation down.
Cryptos continue to press lower with Ethereum looking particularly weak while Bitcoin hovers around support. Watching ETH for a move down off a lower high, into 1254 to test the bulls. Bitcoin looks like it wants to hold 18850 for now but this could change if the USD finds more buyers.
Spot Gold kicked higher into 1677 to clear out some sellers before a rally into the USD smothered the bullish enthusiasm. Momentum is in a prime position to expand lower which means that 1658 is the key level today. If the USD kicks higher expecting to see the level break but for now, expect price to hold ahead of US data release. Crude Oil pressured lower and found minor support for now into 88.15. It will be interesting to see if the level can hold today but I do not expect a move down unless the action increases into the USD. USD Index continues to be the centre of attention…which can seen from comments above…with most markets awaiting a clear move into the USD either up or down although I expect more range action and chop ahead of, potentially PPI, and then CPI releases for a better picture on inflation.
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US Tech 100 Index
Hang Seng Index
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