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 1/11/22
US Indexes edged lower in a largely range bound session as recent buyers locked away some end of month gains ahead of FOMC. Markets are focused on a potential Fed pivot although the data so far has not suggested such a move from the Fed. Expectations are for a 75 basis point hike and then the Fed to hint at a 50 point rise next month. Traders will be hoping that the Fed will signal a likely top to inflation although the continued upward pressure into bond yields suggests inflation is not coming down soon and if the Fed is true its word, that means more hikes until it eases. Tech weighed on the action with Meta leading the fall with a 6% drop which flowed over into other big names like Google and Apple. A rally into the USD pressured commodities lower across the board. (All times AEDT) JPY Final Manufacturing PMI at 11:30am, CNY Caixin Manufacturing PMI at 12:45pm, AUD Cash Rate and Rate Statement at 2:30pm, AUD RBA Gov Lowe Speaks at 7:20pm and USD ISM Manufacturing PMI and Jolts Job Openings at 1am.
Asian markets could be setting up for an expansionary phase after having a narrow range bound session…especially the Nikkei.
The ASX200 is expected to open UP 15/20 points after a rather tame overnight session for the SPI200 in the US.
Prices below as at 8am AEDT
SPI200 (Dec) overnight futures up 10 pts to 6866
SP500 down 29.08 pts to 3871.98
NASDAQ Composite down 114.31 pts to 10988.14
Dow Jones down 128.85 pts to 32732.95
FTSE100 up 46.86 pts to 7094.53
DAX40 up 10.41 pts to 13253.74
GOLD (Spot) down $10.83 to $1633.68 an ounce
COPPER futures US session (Comex Dec) down $0.0495 to $3.3795 a pound
OIL futures US Session (Nymex Dec) down $1.37 to $86.53
CRB Index up 1.51 pts to 274.13
AUDUSD trading at 0.6397
EURUSD trading at 0.9882
GBPUSD trading at 1.1473
USDJPY trading at 148.7000
USD Index US Session (ICE Dec) up 0.874 to 111.480
The SPI200/ASX200 was generally supported in overnight trade although could not hold above the 6868 level. Price did hold a higher low at 6850 which could lead to a rally up and through 6880 but I do not expect bulls to get aggressive ahead of the RBA rate announcement at 2:30pm….and then the Melbourne Cup at 3pm! (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW essentially went sideways in a very lacklustre session. Price held below a minor level at 32868 which could see some selling pressure come in to the action in Asian market trading. Watching for a lower high and a grind lower. The US Tech 100 came under some pressure thanks to the selloff in Meta that spilled over into others shares. Price held a minor higher low at 11390 although did hold lower highs into the close. For any long, I would need to see the recent lower high at 11508 break and momentum to swing up…but for now the pressure remains down. The Hang Seng added to recent losses yesterday and held the lows in overnight trading. Watching to see if price initially flushes up through 14825 on the open before getting heavy again for a test down into 14620 or lower. The underlying index remains under pressure and trending down. The Nikkei went sideways between 27595 and 27490 in a very narrow range for the Nikkei. I expect that bulls will want to flush up through 27595 to trap some buyers before a lower high holds and we see a move down…but really anything could happen on the open with the lack of direction from the overnight session. The DAX edged its way lower back into the 13230 level where buyers may look to provide some support. If buyers can hold 13230, then looking for a higher low….if not then watching for a push below and bigger unwind of recent buyers. The UK100 kicked up above 7080 into the US open and managed to hold above the level into the US close. I would like to see a minor test into 7080 and for buyers to hold the level for a spike up into 7150…although momentum up is easing which may mean bulls are holding on the sidelines.
Cryptos were heading higher until a sharp selloff into the US open. Bitcoin flushed below 20470 and held below the level into the close while Ethereum saw the same price action and held below 1580. Watching both for more selling pressure today so looking for a lower high and short setup.
Spot Gold moved lower along with the rally into the USD. Price held a lower high at 1645 which led to a push below 1641. I expect that the selling pressure will continue and we may see a capitulation move down into 1620 so looking for a lower high to hold. Crude Oil was again choppy after price pushed down below 87.38 on China lockdowns. The recent price action is corrective of the leg up so I expect buyers will be looking for a level to defend and pressure price higher. Watching to see if 85.90 finds some buyers for a move up. USD Index continued its move up with a push through 111.026. I expect that most of the move is short covering into the FOMC release and then key employment data Friday in the US. Expecting price to hold above 111.026 for now.
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US Tech 100 Index
Hang Seng Index
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