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 26/10/22
US Indexes moved higher from the open to add to gains as economic data was weaker than expected. Housing data came in weaker than previous along with manufacturing data while Consumer Confidence also edged lower. Housing data was the focus and pushed US Bond prices higher and yields lower as the USD spiked down through support. The data, although concerning for the economy, was bullish for shares on hopes that the Fed will ease off on rate rises. High bond yields remain a concern for the cost of Debt so any negative news on economic numbers will be taken as a positive by the share market in the short term. With the move down into the USD, we could be seeing the start of longer term repositioning and some bigger unwinding of USD long bets….which in turn suggests bulls may become more active into shares with bad news on interest rates all but factored into price. (All times AEDT) AUD CPI Data at 11:30am, USD Goods Trade Balance and Prelim Wholesales Inventories at 11:30pm, CAD BOC Overnight Rate and Rate Statement at 1am, USD New Home Sales at 1am, USD Crude Inventories at 1:30am and CAD BOC Press Conference at 2am.
Asian markets may see a mixed open with the Nikkei and SPI200 expected to show strength on the open while the Hang Seng continues to find some relative weakness.
The ASX200 is expected to open UP 50 points after the SPI200 fended off an early selloff to ramp higher along with the US.
Prices below as at 8am AEDT
SPI200 (Dec) overnight futures up 56 pts to 6848
SP500 up 61.77 pts to 3859.11
NASDAQ Composite up 246.51 pts to 11199.12
Dow Jones up 337.12 pts to 31836.74
FTSE100 down 0.51 pts to 7013.48
DAX40 up 121.51 pts to 13052.96
GOLD (Spot) up $3.41 to $1653.00 an ounce
COPPER futures US session (Comex Dec) down $0.0280 to $3.4025 a pound
OIL futures US Session (Nymex Dec) up $0.74 to $85.32
CRB Index up 2.17 pts to 273.99
AUDUSD trading at 0.6393
EURUSD trading at 0.9966
GBPUSD trading at 1.1472
USDJPY trading at 147.9600
USD Index US Session (ICE Dec) down 1.154 to 110.755
The SPI200/ASX200 initially pushed lower into support around 6764 before ramping higher once the US opened. Price is showing signs of consolidating the gains above 6828 which is a good sign for further bullish action from the open. Expecting to see an opening ramp up into 6868 resistance and potentially further prior to a grind lower although it will be interesting to see how the market takes the budget news. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW extended on recent gains with a move up off 31240. Expecting to see the bullish sentiment continue and price to test up into 32000. Watching for a minor pullback to clear out some longs and hold a higher low. The US Tech 100 moved up off 11390 and into 11700 before finding sellers once the underlying index closed. Like the DOW, I expect to see buyers continue to provide some support so will be looking for minor consolidation above 11468 for a long entry setup. If not, then we could see a bigger squeeze on longs and a move down. The Hang Seng saw some very choppy action yesterday and then a tame and range bound overnight trading session. There is a lack of new sellers willing to jump in after the recent selloff and buyers remain tentative…which sets up for another potentially choppy session. Watching for an opening flush lower and then buyers to hold a minor higher low. Question is whether buyers can provide support for a good squeeze higher or whether rallies get capped. The underlying index remains in a very strong downtrend but is extended. The Nikkei also moved up but was heavy into the close. Price action is extended which my see some profit taking on the open. Watching to see if price can move below 27476 and hold a lower high for a squeeze lower. The DAX moved up off support and extended into highs around 13115 before finding some minor selling into the close…more than likely from intraday buyers. Watching for a move lower off resistance so want to see a lower high hold. The UK100 reacted down off 7015 as price action had a relatively lacklustre session compared to other indexes. With momentum easing, I am watching for a lower high off 7015 and a squeeze down.
Cryptos had a good US session thanks to the selloff into the USD. Bulls took the opportunity to ramp Bitcoin and Ethereum up through resistance and trigger a load of stop losses that added fuel to the move up. Expecting to see both BTC and ETH work lower off resistance though to squeeze out late buyers before any new leg up can play out.
Spot Gold was initially moving down until the selloff into the USD provided support for bulls. Price spiked into 1661 before finding some sellers to pressure price lower into the close. With momentum up fading, I am watching for another lower high to hold…but this depends on the USD finding some support. Crude Oil was happy to ramp higher off support at 83.35 with the USD move down. Price then edged lower off 85.90 so watching to see if price action can hold a higher low ahead of US Oil inventories. USD Index spiked down through support at 111.865 and then found some buying support into 110.670. Expecting that we could see a further unwind of the USD potentially for an extension into 110.090 or lower.
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US Tech 100 Index
Hang Seng Index
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