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 FRIDAY 28/10/22
US Indexes generally drifted lower from the open with tech taking the brunt of the selling pressure. In after market trading the Nasdaq spiked down through support hard dropping over 2% and taking other major markets with it. I feel that coming tech earnings are making traders nervous while the DOW was supported by Caterpillar and Boeing. Meta took a beating and is in for a rough ride as earnings were a train wreck and highlight major issues at the company. Economic data out showed that the US rebounded in the third quarter with the economy growing at a 2.6% annualised rate thanks largely to a jump in exports and the stronger USD. The data may keep the pressure on the rate rise narrative although a weakening USD and US Bond yields point to expectations the Fed may be reaching peak levels to contain inflation. Focus will be on the inflationary PCE Price Index ahead of the US open and could see volatility jump if it comes out stronger than expected. (All times AEDT) AUD PPI at 11:30am, JPY BOJ Monetary Policy Statement and Policy Rate TENTATIVE, JPY BOJ Press Conference TENTATIVE, CAD GDP at 11:30pm, USD Core PCE Price Index at 11:30pm and USD Pending Home Sales and Consumer Sentiment at 1am.
Asian markets may have a choppy open as bulls digest an after market selloff into the major Indexes especially the NASDAQ. Hang Seng could break down for another selloff so watch the open closely.
The ASX200 is expected to open DOWN 30 points after the SPI200 spiked down into support into the close. Markets took a hit after hours which may weigh on the open.
Prices below as at 8am AEDT
SPI200 (Dec) overnight futures down 26 pts to 6813
SP500 down 23.30 pts to 3807.30
NASDAQ Composite down 178.31 pts to 10792.68
Dow Jones up 194.17 pts to 32033.28
FTSE100 up 17.62 pts to 7073.69
DAX40 up 15.42 pts to 13211.23
GOLD (Spot) down $1.29 to $1663.45 an ounce
COPPER futures US session (Comex Dec) down $0.0168 to $3.5282 a pound
OIL futures US Session (Nymex Dec) up $1.17 to $89.08
CRB Index down 0.45 pts to 276.81
AUDUSD trading at 0.6451
EURUSD trading at 0.9966
GBPUSD trading at 1.1566
USDJPY trading at 146.3100
USD Index US Session (ICE Dec) up 0.873 to 110.425
The SPI200/ASX200 flushed lower into the close to end at support around 6815. With the spike lower in markets after the US close, I expect to see the negative sentiment flow over into a weak open. Watching for a flush lower into 6790 off a lower high. Because price action struggled to get through 6868, I would expect the action to be heavy today into the close. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW moved down off 32345 and pushed back below 32000 which could trigger some sellers into action today. I expect that the tech nervousness will at least cap rallies today so I am looking for lower highs to pressure price lower. The US Tech 100 dropped over 2% after the close and spiked into 10950 before bouncing back. The flush may have been a stop loss hunt so watching to see if sellers jump back into the action around 11220 to hold a lower high. The Hang Seng is teetering on a good selloff….or at least a move down to trap some sellers before a ramp higher. Price held a lower high at 15586 and I expect to see weakness on the open so will be looking for a lower high for shorts. The Nikkei sold off in overnight trading after resistance at 27385 held. Price action flushed 27119 before bouncing into the close. Watching to see if sellers hold price below 27119 on the open for a move down to 26870/26805 or whether a short squeeze is on the cards. The DAX had a generally messy session with a push down in the European session and then a v-shaped recovery followed by a late selloff into the US close. Watching to see if price holds below 13230 for a lower high and move down to 12965. The UK100 held below 7080 during the European session before spiking lower through 7015 to clear out some stop losses. Watching to see if a lower high holds for a move down off 7044. The way price rejected the selloff could mean that 7015 could hold a retest…we will see.
Cryptos could not add to recent gains as the US found some support. With the recent run up, I expect that there are late buyers getting a little nervous of a squeeze lower. If the USD extends on the overnight gains in the Asian session, I expect to see more downside pressure into Bitcoin and Ethereum. For now ETH is holding support at 1508 while BTC has broken below support at 20530 and edging lower.
Spot Gold was a slow grind lower from the start of the Asian market session. Price is still holding above 1661 but I expect traders will continue the grind lower with focus on the inflationary data tonight to see how the USD reacts. Crude Oil added to recent gains with a push higher into 90.02 resistance. Watching to see if buyers remain in control and hold above 88.50 or whether we see a further unwind of buyers on anticipation of weakness intro the share market…or strength into the USD. USD Index moved up off lows and back above 110.140. I do not expect any lively action today and will be watching for price to hold above 110.140 into the US PCE data release.
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US Tech 100 Index
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