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 3/11/22
US Indexes took a hit after the FOMC statement as they realised a ‘pivot’ on interest rates is off the cards for a while yet. The FED raised interest rates by 0.75% as expected and signalled that future ‘smaller’ hikes were on horizon but it was far too premature to be thinking of ‘pausing rate hikes’ yet. This shattered bulls confidence and sent indexes sharply lower as many had factored in a potential top to interest rate hikes. The economic data continues to show strength and give support to the Feds continued aggressive tone as ADP non-farm employment came out a lot higher than expected and higher than previous….which now setups up for an interesting payroll number Friday. Bond prices also spiked lower which will also create more headaches for the Fed and their QT program if the lack of buying liquidity lessens, while the USD kicked up. What the FOMC release and reaction to the release highlights, is that stubbornly high inflation remains the key problem for the US Fed and corporations alike. (All times AEDT) JPY Bank Holiday, AUD Trade Balance at 11:30am, Caixin Services PMI at 12:45pm, EUR ECB President Lagarde Speaks at 7:05pm, GBP Official Bank Rate and Monetary Policy Summary at 11pm, GBP BOE Gov Bailey Speaks at 11:30pm, USD Unemployment Claims at 11:30pm and USD ISM Services PMI at 1am.
Asian markets will come under fire on the open after the late selloff in the US session. Expecting a negative session but weary of another ramp off support levels.
The ASX200 is expected to open DOWN 115 points after the SPI200 a hit along with other major Indexes after the FOMC statement.
Prices below as at 8am AEDT
SPI200 (Dec) overnight futures down 113 pts to 6876
SP500 down 96.41 pts to 3759.69
NASDAQ Composite down 366.05 pts to 10524.80
Dow Jones down 505.44 pts to 32147.76
FTSE100 down 42.02 pts to 7144.14
DAX40 down 82.00 pts to 13256.74
GOLD (Spot) down $12.52 to $1635.21 an ounce
COPPER futures US session (Comex Dec) down $0.0370 to $3.4355 a pound
OIL futures US Session (Nymex Dec) up $1.63 to $90.00
CRB Index up 4.32 pts to 280.66
AUDUSD trading at 0.6354
EURUSD trading at 0.9817
GBPUSD trading at 1.1395
USDJPY trading at 147.8500
USD Index US Session (ICE Dec) up 0.636 to 111.995
The SPI200/ASX200 saw a big flush lower after the FOMC statement and ended down on support around 6868. The weak open on the ASX will scare recent bulls so I expect to see some follow through selling into the SPI open for a move into 6849 and potentially lower. Watching for an early flush higher to trap some buyers and unwind some overnight sellers before a lower high can hold. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW initially spiked higher after the rate rise but then fell over after the FOC statement. Price flushed straight through 32345 as buyers who got it wrong the past few sessions, were forced to cut and run. Watching for further downside ahead of the BOE rate announcement so looking for a kick up into 32345 to test the level before a lower high holds. The US Tech 100 dropped 4.4% from 11390 to 10910 after the Fed statement. Like the DOW, I am expecting to see further downside so watching for some buyers to be trapped off 10910 with a minor rally, and then a lower high to hold. If price moves straight below 10910, then watching for a retest and failure into 10735. The Hang Seng had a mixed session after being halted for a while due to tropical cyclone warnings. Price also missed the bulk of the move down in the US so I expect a very weak open. Watching to see if a lower high can hold around 15580 for a short opportunity potentially into 15298. The Nikkei fell over with the rest of the indexes and closed down on support around 27335. The underlying index is closed so I do not expect to trade the N225 today. The DAX moved down below 13230 ended just above potential support around 13115. I am watching for further weakness today as markets reset for a continued high inflation environment. Watching for a lower high to hold for a push down into 13055. The UK100 was much the same as the DAX with price set to see further weakness ahead of the BOE interest rate release. Would ideally like to see a reaction up off 7080 to trap some buyers and squeeze out some sellers before another leg lower.
Cryptos took a hit along with the share markets and USD with both Bitcoin and Ethereum pushing down into support. BTC is hovering above 20050 while ETH is holding 1508 for now. I expect both will see some further weakness today in the Asian session so watching for a lower high to build.
Spot Gold was untradeable after the FOMC release as price spiked higher to flush sellers out and then lower to clear out buyers. Price is currently hovering above 1632 so may see bargain hunters dip their toes in the water for a grind higher. Crude Oil moved up into 90.02 resistance before failing lower after FOMC. With momentum easing on the push into 90.02, I am watching for a lower high to build for a push into 88.50 or lower. USD Index initially spiked down into 110.680 and then went straight back up into 112.115 potential resistance. Watching to see if there is some follow through higher as traders rebalance their exposure more to the long side.
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US Tech 100 Index
Hang Seng Index
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