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 2/11/22
US Indexes took the strong open as an opportunity to take some risk off the table ahead of the FOMC release. Traders are hoping for a ‘pivot’ from the Fed although economic data out overnight did not support that view. Job openings data unexpectedly rose which pressured bulls from the open and hinted that the Fed may have to stay the course with its aggressive rate rises…key employment data out Friday will be telling. Any signs of continued strength in the economy points to stubbornly high inflation and more rate rises therefore share markets will need to adjust lower. All markets are currently focused on inflation and Reserve Bank comments on the coming pace of rate rises and whether they will slow down. The Bank Of England is expected to raise by 75 basis points also this week and traders will be scrutinizing comments for a slow down in coming rate hikes hoping that the worst is over. The problem still remains that economic data out remains strong meaning inflation may remain high at best. The USD pushed back up into resistance after the US Jobs data release and US Bonds also spiked lower showing that stock market bulls may have been too early again…we will know soon enough. (All times AEDT) JPY Monetary Policy Meeting Minutes at 10:50am, AUD Building Approvals at 11:30am, EUR German Trade Balance at 6pm, USD ADP Non-Farm Employment Change at 11:15pm, Crude Oil Inventories at 1:30am, USD FOMC Statement and Fed Funds Rate at 5am and FOMC Press Conference at 5:30am.
Asian markets may see a choppy open as many are showing a pullback in an uptrend which could see more buyers or some profit taking on the open?! The expectations for FOMC tonight are still very much mixed and could go either way.
The ASX200 is expected to open UP 15 points after the SPI200 added to the day sessions gains.
Prices below as at 8am AEDT
SPI200 (Dec) overnight futures up 5 pts to 6978
SP500 down 15.88 pts to 3856.10
NASDAQ Composite down 97.30 pts to 10890.85
Dow Jones down 79.75 pts to 32653.20
FTSE100 up 91.63 pts to 7186.16
DAX40 up 85.00 pts to 13338.74
GOLD (Spot) up $14.05 to $1647.73 an ounce
COPPER futures US session (Comex Dec) up $0.0928 to $3.4678 a pound
OIL futures US Session (Nymex Dec) up $1.84 to $88.37
CRB Index up 2.21 pts to 276.34
AUDUSD trading at 0.6396
EURUSD trading at 0.9882
GBPUSD trading at 1.1487
USDJPY trading at 148.2700
USD Index US Session (ICE Dec) up 0.035 to 111.455
The SPI200/ASX200 rallied into the RBA release and then added to the gains into the close and at the start of the European session. Price found some profit taking and resistance at 7018 and then a potential lower high at 6984. The open may see some further enthusiasm from buyers but I expect the bullish action to be capped considering the US move lower. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW was edging higher into the US open but then failed miserably to give back all of the days gains plus more. It seems that the action was being pumped for the open before profit taking pushed price straight back down. I do not expect to see much support today and the key level to trigger sellers will be a push back below 32595. The US Tech 100 was also pumped higher into the open in a controlled tone before sellers stepped in to knock price straight back down again. The double top at 11568 could see further selling today so watching for a retest of 11390 and a lower high. The Hang Seng had a big day session yesterday as sellers were squeezed out of the action into 15580. Because the underlying index is down so much, these strong bounces on barging hunting are to be expected…its whether bulls can keep the pressure on or not today. The overnight action was sideways so I will be watching for a flush higher and then a lower high to squeeze out some buyers…or the reverse, a flush into 15298 then rally. The Nikkei also edged higher during the day but then gave back the gains overnight. Price action has a cluster of support levels below 27530 which may be targeted on the opening drive so watching for a flush down and then rally off a higher low. The DAX managed to push up into 13465 resistance before failing in the US session. Price action looks set to hold a lower high although this may just be a pullback in an uptrend. Watching for a minor lower high to hold and a move down into 13230. The UK100 was much the same as the DAX with an extended move up into resistance and then a reaction lower. Like the DAX, this could be a pullback in an uptrend to trap some sellers so watching for a push into 7150 and then a higher low ahead of the BOE rate announcement tomorrow…but a lot will depend on the FOMC statement.
Cryptos were heavy as the share market edged lower. Bitcoin held a lower high at 20655 and is currently toying with the 20470 level. I am watching BTC for a lower high and squeeze down as I expect buyers will be nervous. Ethereum kicked above 1596 before later failing back below the level. Watching for a lower high and some unwinding of buyers today.
Spot Gold was all smiles at the start of the European session as price rallied…then the bears stepped back into the action once the USD bounced back up. Gold tested into 1641 which held but I am watching for the lower high at 1650 to trigger a flush below 1641 and take out some stop losses….from there it will depend on the USD and FOMC. Crude Oil managed to rally up off 85.90 as expected and ran into sellers at 88.50. The 88.50 level is key for me today and I am watching to see if sellers hold it or whether we see an extension up into 90.02. USD Index was moving lower thanks to a strong share market session in Asia and Europe but then spiked on the US data release as bonds powered lower. Price pushed into resistance which may hold today although we may see some further short covering into the US open.
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