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 MONDAY 17/10/22
US Indexes had an initial flushed higher on the open before sellers took control and pushed prices lower into the close. Seems that the market had a delayed reaction to the CPI numbers after stronger retails sales figures added to the inflationary concern. The USD reversed the losses from the previous US session while Bond yields continue to be bias down. The word ‘recession’ is again being pushed by news outlets and will be keeping bulls on the sidelines which I expect is fair until we see what the US Fed has in store for interest rate rises. The main concern for investors is that we have not seen peak inflation as the data suggests continued strength in the consumer and we can add higher energy prices to the mix. Feds Bullard said in an interview that the Fed needs to keep ‘front loading’ interest rate rises which points to more 75 basis point hikes in the near future. All in all, I expect to see bias down continue along with the big rallies and controlled selloffs until traders fell the Fed is getting inflation under control. (All times AEDT) CNY Trade Balance TENTATIVE, EUR German Buba Monthly Report at 9pm, USD Empire State Manufacturing at 11:30pm and USD Federal Budget Balance TENTATIVE.
Asian markets are going to open weaker and gap lower on the open. Bias on each is down but getting into extended territory making shorts more difficult without a pullback. Longs would need to wait for a constructive base build.
The ASX200 is expected to open DOWN 90 points after the SPI followed the US lower in Fridays overnight session.
Prices below as at 8am AEDT
SPI200 (Dec) overnight futures down 102 pts to 6660
SP500 down 86.84 pts to 3583.07
NASDAQ Composite down 327.76 pts to 10321.39
Dow Jones down 403.89 pts to 29634.83
FTSE100 up 8.52 pts to 6858.79
DAX40 up 82.23 pts to 12437.81
GOLD (Spot) down $21.68 to $1644.45 an ounce
COPPER futures US session (Comex Dec) down $0.0350 to $3.4055 a pound
OIL futures US Session (Nymex Nov) down $3.50 to $85.61
CRB Index down 5.80 pts to 276.69
AUDUSD trading at 0.6199
EURUSD trading at 0.9722
GBPUSD trading at 1.1172
USDJPY trading at 148.6700
USD Index US Session (ICE Dec) up 0.917 to 113.170
The SPI200/ASX200 initially pushed up into resistance at 6791 before trending lower into the close. Lower highs are holding the action down with the most recent at 6683 being the anchor to the move lower. Watching for an early flush of the anchor and then for price to remain heavy. Not discounting the usual bullish move up during the day for the overnight selloff so expect that 6683 is key today to either hold or break intraday. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW reversed some of the gains from the CPI pump as price ended into potential support around 29600. The anchor down is at 29795 which I expect will hold through the Asian market session as the DOWs momentum is down. The US Tech 100 flushed up above 11055 to trap some buyers on the open and then dumped into 10745. Watching the 10745 area to see if sellers keep price below or we see a flush and push back above the level for a retracement up. Hang Seng added to the day sessions losses with a move below 16530 and into potential support at 16382. Expecting more downside momentum for the day but will be looking for an early ramp higher to trap some bulls first. The Nikkei was much the same as the Hang Seng with an early pump up and then failure into the session close. Watching for the 26750 level to hold and for sellers to pressure into 26530 and potentially lower. Share investors will be spooked with the move down and gap lower on the index after Fridays session ended on highs. The DAX had a relatively choppy session with a test up into 12672 before a selloff along with the US. Price is below the EMAs so I expect to see sellers hold lower highs today looking for a move down off 12402. The UK100 tried early to be bullish but failed miserably once the US opened for action. The 6788 level will be key for me today as the price action is suggesting it may hold in the near term. Problem will be if the rest of the major indexes continue to be bearish then the momentum down will continue.
Cryptos also moved lower to join the risk off mood. Bitcoin is holding below 19525 which I expect to at least continue until the US opens. Watching for a test into 18850 for BTC and for the longer term range to continue to hold between 18330 and 20530. Ethereum is also edging lower with price currently reacting up off 1319. Watching for lower highs to hold for now potentially off a retest into 1314.
Spot Gold pressed lower into 1645 and is now starting to find a few buyers no doubt trying to squeeze out some sellers ahead of the Europe or US open. Watching for another lower high to hold and for gold to continue down remembering that the daily trend is also down and very weak. Crude Oil pressed down into $86 where it held into the US close. Ideally I would like to see a flush lower and then a move back above the level for a short squeeze potentially into $88.10. USD Index has opened today a little weaker but I expect this is a minor squeeze on buyers before a move up into 113.600. The bias remains up with inflation remaining strong and traders awaiting to see just how aggressive the Fed will be with rate rises in the near term.
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US Tech 100 Index
Hang Seng Index
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