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 THURSDAY 27/10/22
US Indexes initially ramped higher from the open but could not hold onto the gains and fell over into the close. The tech heavy Nasdaq was weighed down with a negative open thanks to a few Tech giants taking a big hit…namely Amazon, Meta and Apple. The Focus remains on the USD as price continues to slide with more buyers unwinding long positions. The fall in the USD helped boost commodities with Copper seeing a 4.3% rally and Oil over 3%. The fall also helped boost USD denominated currencies like AUD, EUR and GBP. Hopes that the Fed will pivot on rate rises has helped to support share prices recently but higher inflation means that the Fed still has some rate rising to do. Higher inflation is filtering through to corporate balance sheets and pressuring growth stories. A lot of the gains shown on balance sheets are due more to raising of prices (potentially creative accounting and in many cases price gouging) than growth, which the Consumer will not tolerate for long as they are forced to tighten on personal spending. I feel that we are at a bit of a juncture and with more earnings to come which could easily disappoint and pressure share prices to new lows. (All times AEDT) AUD Import Prices at 11:30am, RBA Annual Report TENTATIVE, EUR Main Refinancing Rate and Rate Statement at 11:15pm, USD Advance GDP, Unemployment Claims and Durable Goods Orders Data at 11:30pm and EUR ECB Press Conference at 11:45pm.
Asian markets will again opened mixed although the late selloff into the US may see buyers hold off from adding more risk on the open.
The ASX200 is expected to open UP 15 points after the SPI200 initially ramped higher at the start of the US session only to give back most of the gains into the close.
Prices below as at 8am AEDT
SPI200 (Dec) overnight futures up 26 pts to 6825
SP500 down 28.51 pts to 3830.60
NASDAQ Composite down 228.13 pts to 10970.99
Dow Jones up 2.37 pts to 31839.11
FTSE100 up 42.59 pts to 7056.07
DAX40 up 142.85 pts to 13195.81
GOLD (Spot) up $12.21 to $1665.21 an ounce
COPPER futures US session (Comex Dec) up $0.1435 to $3.5405 a pound
OIL futures US Session (Nymex Dec) up $2.96 to $88.28
CRB Index up 3.35 pts to 277.35
AUDUSD trading at 0.6498
EURUSD trading at 1.0082
GBPUSD trading at 1.1627
USDJPY trading at 146.3700
USD Index US Session (ICE Dec) down 1.320 to 109.510
The SPI200/ASX200 rallied at the start of the US session as dip buyers supported prices. It was not long until the momentum shifted off 6868 resistance and price fell back down again. I expect that we may see a weak open although supported into 6815 thanks to commodity stocks. Watching for an early flush lower and then a higher low to hold. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW popped up above 32000 before being sold back down again into the close. Watching the 32000 level to see if sellers defend the level and a lower high holds or not. I feel that the DOW is more bullish than the Nasdaq and may see further support for a run higher into the US open. The US Tech 100 is under pressure as an early spike up was sold straight back down again. A minor lower high is holding at 11490 that could cap any bullish action today and see more sellers jump into the action. Watching for lower highs to hold into the US open. The Hang Seng held support at 15226 through European trade before launching a 470 point rally at the start of the US session. Buyers held on to the gains but momentum slowed so I expect to see some profit taking on the open and for price to push down below 15586. The Nikkei also went up and then straight back down again along with the US and is currently toying with support at 27385. I am watching for a flush of the level at 27385 before a higher low holds. From there, I will be watching to see if the lower high at 27510 continues to hold or not as the underlying index is still retracing the daily down trend. The DAX edged its way higher and looks set t hold a higher low off 13115. That will of course depend on whether Asian and US markets are supported today or not. The 13115 level is key today and I feel that bulls will try to add to the recent gains for a move up into 13465. The UK100 was heavy from the European open before spiking higher on the US open. Watching to see if the 7015 level can hold for a spike up into 7080 off a higher low.
Cryptos had another good session to add to the recent gains thanks solely to the continued selloff into the USD. Bitcoin broke up through 20530 resistance while Ethereum went up through 1508 and is holding nicely. I expect that both BTC and ETH will add to the gains today in the Asian market as long at the USD holds the momentum down. If the USD rallies into the European or US opens, then expect there will be some unwinding of buyers as prices squeeze lower.
Spot Gold moved up through resistance at 1661 before fading lower. Price is currently holding above 1661 and gold bulls will be watching for the USD to add to its losses today for a move up into 1682 for the precious metal. Crude Oil spiked up through 85.90 as expected and the pushed into 88.50 before stalling into the close. The move up was mainly attributed to a weaker USD even as Inventory data came out a lot stronger than expected. Traders expect supply to tighten in coming months so may keep the bullish pressure on Oil. USD Index moved down through 110.090 lows and looks set to extend lower into 109.400. I will be watching the support area to see if buyers edge back into the action to provide some support. If not, then a much bigger unwind of longs is on the cards.
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US Tech 100 Index
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