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 TUESDAY 18/10/22
US Indexes were happy to rally from the open to reverse Fridays losses and keep traders on their toes. The US open was buoyed by a strong European session after Britain reversed policy proposals on tax cuts and eased off on energy subsidies. The news triggered a ‘risk on’ move in Europe which flowed over to the US open. The US was also supported by Bank of America quarterly results that beat estimates…which they generally do considering the conservative estimates. The USD fell hard as share market bulls took control while US bonds consolidated the lows. US indexes may be attempting to make a short term bottom expecting support from corporate earnings. I expect that any rally will again be a corrective move up of the longer term downtrend. With the economy continuing to show strength, I feel that it is only time until economic data starts to show weakness as higher interest rates constrain growth. This would mean continued pressure on the share market longer term. (All times AEDT) AUD RBA Deputy Gov Bullock Speaks at 11:05am, AUD Monetary Policy Meeting Minutes at 11:30am, EUR ZEW Economic Sentiment at 8pm and USD Industrial Production at 12:15am.
Asian markets are going to open stronger and gap up making longs difficult. Looking to work off lower highs at key levels for shorts while looking for a pullback and buyers to hold a higher level for a long.
The ASX200 is expected to open UP 65 points as the SPI200 reversed a lot of the day sessions losses.
Prices below as at 8am AEDT
SPI200 (Dec) overnight futures up 61 pts to 6723
SP500 up 94.88 pts to 3677.95
NASDAQ Composite up 354.41 pts to 10675.80
Dow Jones up 550.99 pts to 30185.82
FTSE100 up 61.45 pts to 6920.24
DAX40 up 211.22 pts to 12649.03
GOLD (Spot) up $6.79 to $1650.69 an ounce
COPPER futures US session (Comex Dec) down $0.0155 to $3.4080 a pound
OIL futures US Session (Nymex Dec) up $0.05 to $84.70
CRB Index down 1.37 pts to 275.33
AUDUSD trading at 0.6288
EURUSD trading at 0.9843
GBPUSD trading at 1.1358
USDJPY trading at 149.0200
USD Index US Session (ICE Dec) down 1.252 to 111.950
The SPI200/ASX200 have a contained US session to consolidate the gains from European trade. Price held a higher low at 6715 which I expect will trigger some bulls into action on the open. I expect to see an early ramp higher but will be watching for a flush lower, potentially into 6705, and then run higher. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW is moving up and set to test into 30493. I expect that we may see some profit taking again off this level but I will be on guard for price to potentially consolidate around 30493 and build the higher low for a move up. The US Tech 100 has extended up into 11132 resistance where I expect we will see some minor profit taking. The move up into the US may have been overdone considering the rate rise concerns. On the flip side, if bulls can push up through 11132 and then consolidate, I expect some continuation up into the US open. Hang Seng added to the day sessions gain this time, and pushed above 16730. Momentum of the move up is slowing so I am looking for a flush up into 16986 and then a lower high for a short opportunity. The Nikkei had a good overnight session as price rallied 400 points after a range bound day. Watching for price to flush 27173 and even see an opening drive up into 27385 before some sellers trigger profit taking from longs. The DAX moved up off 12402 support and pushed up through 12672 resistance. I expect that bulls want to extend the move up into the 12965 level so will be watching for higher lows to hold for long setups. The UK100 also held a support area at 6958 on the back of the policy backflip. I expect that the rally may have been an over-reaction so will be watching for 6958 to find some selling pressure as the underlying economy has a few issues with pension funds that may continue to weigh on sentiment.
Cryptos found some love thanks to the risk on move into the share market although the move up does not look very convincing. Watching Bitcoin to see if buyers can hold 19525 for a move up or if they anticipate some renewed weakness into the share market into the coming session. Ethereum looks set to test into 1345 where I will be watching for a higher low and extension up.
Spot Gold initially rallied as the USD moved lower but then sellers capped the gains and sent gold lower. This is the unwind of safe haven trades although the market missed the safe haven buying part. Watching to see if gold can hold above 1641 or whether lower highs are going to continue to pressure price lower. Crude Oil found pressure from sellers as price held below 85.88. Buyers remain relatively strong though as they easily soaked up spikes into 84.23. I expect that any new lower high below 85.88 will lead to a break down below 84.23 to trigger sell stop losses. USD Index moved lower being weighed down by a risk on move into the share market and a rally into the GBP and EUR. We may be seeing the start of a short term unwind of USD longs so I expect some follow through selling below 112.200.
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US Tech 100 Index
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