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 9/11/22
US Indexes had a choppy session but ended with gains as US midterm elections unfold and the battle for Congress heats up. It is expected that Republicans will win a house majority therefore leading to a gridlocked senate preventing any major policy changes. This may benefit tech shares as a Democrat surprise victory brings back concerns for heavy regulation and more budget spending therefore adding to inflation. Experts suggest the results are not due for a few days yet so expect more volatility into US indexes. The USD took a hit lower as buyers continued to lock away some gains ahead of CPI. The fall in the dollar supported commodities such as Copper and Gold while Oil fell over after data released showing inventories unexpectedly rose. I feel the USD move lower is getting extended considering it is still unknown as to whether the Fed will look to raise rates 75 or 50 basis points next meeting. If CPI remains high, then the market will lean towards 75 meaning another selloff into the share market. The US bond market is showing a little uncertainty also as yields eased lower. (All times AEDT) JPY Bank Lending and Current Account at 10:50am, CNY CPI and PPI at 12:30pm, USD FOMC Member Williams Speaks at 7pm, AUD RBA Deputy Gov Bullock Speaks at 8:05pm, GBP MPC Member Haskel Speaks at 12am, USD Final Wholesale Inventories at 2am and USD Crude Oil Inventories at 2:30am.
Asian markets are expected to open flat after a lacklustre overnight session. The Nikkei and Hang Seng ended where they started so I expect to see a choppy ranging session.
The ASX200 is expected to open UP 35 points after a choppy overnight session on the SPI200.
Prices below as at 8am AEDT
SPI200 (Dec) overnight futures up 34 pts to 6990
SP500 up 21.31 pts to 3828.11
NASDAQ Composite up 51.68 pts to 10616.20
Dow Jones up 333.83 pts to 33160.83
FTSE100 up 6.15 pts to 7306.14
DAX40 up 155.23 pts to 13688.75
GOLD (Spot) up $37.82 to $1713.25 an ounce
COPPER futures US session (Comex Dec) up $0.0650 to $3.6685 a pound
OIL futures US Session (Nymex Dec) down $2.53 to $89.26
CRB Index down 2.87 pts to 284.05
AUDUSD trading at 0.6504
EURUSD trading at 1.0072
GBPUSD trading at 1.1542
USDJPY trading at 145.5900
USD Index US Session (ICE Dec) down 0.500 to 109.493
The SPI200/ASX200 was relatively choppy late in the US session and held below resistance at 7018. Any buyers from the run up from the start of the European session were squeezed out on a spike lower so I expect a choppy open. The general trend is up so I expect to see a flush lower then run higher to test into 7018. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW managed to hold gains into the close after breaking up through 32947 on the US open. Was a difficult session for day traders as price spiked, then dropped and spiked again. Expect further volatility until midterm election results become known. Looking for a flush up into 33420 before some minor profit taking. The US Tech 100 was choppy along with the DOW and the potential outlook remains in the balance. I expect that longer term investors are remaining sidelined with the unknown or elections and inflation hanging around. For me, the key level is 10910 to either hold and see a higher low and squeeze on sellers…or a lower high and push down below 10910. The Hang Seng had quiet overnight session after a very contained day of trading. It seems that recent bulls may have run out of steam in the short term so a correction lower could be on the cards. Watching for a lower high to hold for a squeeze on buyers and move down. The underlying index looks good though, so I am weary of another flush lower and run higher. The Nikkei was contained on the upside as sellers defended 28050 resistance. The underlying index is extended so may see a move down today. Watching for a lower high to bring in some sellers and profit taking from bulls. The DAX was casually moving up until the US open when the volatility kicked in. Price is holding above 13613 so this is the key level for today. Watching for the level to hold and a higher low see a continuation move up. If not, then a lower high and unwind of some longs is on the cards. The UK100 held above 7232 but is looking heavy. If price can consolidate around 7300 or so, then a move up into 7358 could be the play. If not, then a lower high will see a test or break of 7232.
Cryptos took a big hit with Bitcoin and Ethereum getting smashed…going to show markets are more sentiment driven and less fundamental when it comes to money. News that FTX exchange is insolvent sent bulls running. Bitcoin broke into new daily lows while Ethereum hit daily support…both down over 10%. For now, I am watching to see if buyers are willing to provide support or not…time will tell. Prices have spiked up off the levels but there will remain pressure on longs until a higher low holds when new buyers are willing to step in to the action.
Spot Gold took the opportunity to ramp higher with the continued move down in the USD. Price is extended and momentum is slowing so any bounce in the dollar will see buyers profit take into gold. Crude Oil nosedived through 90.60 support on news that supply is higher than expected. Watching for a push into test 87.82 today ahead of US inventory data just after the US open later. USD Index moved down through 110.150 support as expected leading to a rally in USD denominated assets. I expect that the move down is getting extended so may see some buyers flow back into the action. The problem remains the unknown for elections and inflation so expecting chop or a further move down until CPI is released.
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US Tech 100 Index
Hang Seng Index
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