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 10/11/22
US Indexes moved lower as recent buyers decided to lock away some gains into the CPI number and uncertain outlook on interest rate rises. Also, Republicans did not see the ‘red wave’ as many expected which was considered to be bullish for the share market. Crypto markets took another hit after Binance pulled out of the deal to buy embattled FTX. Bitcoin and Ethereum are in all sorts of pain which could flow over into other markets depending on major traders margin exposure. With CPI numbers out ahead of the US open, the USD also saw some buying up off lows which in turn pressured commodity prices. Expect that many will be waiting for the CPI release before making any more major risk on moves. US Bond market yields fell across the board as it seems that there was a squaring up of some positions before the data release. All in all, Asian and then European markets may also see some risk off today considering the uncertain outlook. (All times AEDT) AUD MI Inflation Expectations at 11am, USD FOMC Member Waller Speaks at 6pm, USD CPI Data and Unemployment Claims at 12:30am and CAD BOC Gove Macklem Speaks at 3:50am.
Asian markets may come under some pressure today ahead of the US CPI numbers and the unknown for inflation. SPI and Nikkei are at support so watching for a flush of sellers then lower highs.
The ASX200 is expected to open DOWN 60 points after the US saw some profit taking from recent buyers.
Prices below as at 8am AEDT
SPI200 (Dec) overnight futures down 61 pts to 6936
SP500 down 79.54 pts to 3748.57
NASDAQ Composite down 263.02 pts to 10353.18
Dow Jones down 646.89 pts to 32513.94
FTSE100 down 9.89 pts to 7296.25
DAX40 down 22.43 pts to 13666.32
GOLD (Spot) down $7.28 to $1705.30 an ounce
COPPER futures US session (Comex Dec) down $0.0098 to $3.6727 a pound
OIL futures US Session (Nymex Dec) down $3.29 to $85.62
CRB Index down 4.27 pts to 279.78
AUDUSD trading at 0.6427
EURUSD trading at 1.0009
GBPUSD trading at 1.1351
USDJPY trading at 146.4200
USD Index US Session (ICE Dec) up 0.826 to 110.368
The SPI200/ASX200 held lower highs all session and broke below 6942 into the close. If buyers can not reclaim back above 6942 on the open, I expect to see a continued move down to 6910 and potentially lower. Longer term the ASX200 is breaking down again after failing at 7007. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW was all one way action lower from the open with sellers clearly in control. I expect that a lot of the move down was simply profit taking and risk off prior to CPI so would look for some buyers to start to provide support into 32470 to squeeze out sellers prior to the US open. The US Tech 100 was much the same as the DOW with price under pressure. Price action is between support and resistance so I will be watching for a retest up into 10910 and then a lower high to hold for another leg down. This may depend on the CPI release though. The Hang Seng added to the days losses in overnight trading but was more contained than other major Indexes. For any short, ideally I expect a flush higher and then a lower high to hold. For any long, I feel that we have to wait for a clear level to be targeted…potentially 15815. The Nikkei also added to the day sessions move down in overnight trading. Price ended down at support around 27537 so this will be the key level for the open. Want to see either a flush lower and then reclaim back above for a higher low and long…or a lower high below 27537 for a move down. The DAX held up better than the US although they still have a session to come when I expect the DAX to play catchup and move lower. Watching for a lower high to hold for a squeeze down to 13465 and potentially below. The UK100 held a lower high at 7311 and also held up well considering the US move down. I expect that price was being held up for a selloff on teh European open today but we will see.
Cryptos Bitcoin and Ethereum took another big hit both being down around 15% at the time of writing. Both Ethereum and Bitcoin look set to add to recent losses as price action is in no mans land and fear is driving them lower. We have to remember that there are a lot of die hard BTC and ETH fans that could still be holding and it may only be a matter of time before many are wiped out. I feel that this kind of move will be hard to come back from and could be the end to the crypto mania for many.
Spot Gold basically went sideways as the rally into the USD kept buyers in check. Price failed to follow through higher after price rejected 1716 and edged lower. I expect that price will hold below this level and even see some recent buyers close longs ahead of CPI and a potential USD rally. Crude Oil continued the move lower as data showed US inventories spiked. Price pushed below 87.82 and into support around 85.60. With price action being extended lower, I am watching for a flush of sellers and move up. If not then 85.60 could become new resistance a price unwinds further. USD Index moved up off support around 109.620 ahead of CPI out before the US open. I feel that this was some squaring up of sellers as the risk is now that the numbers come out stronger than expected and the USD rallies again. Ahead of the number I would expect some chop or potentially a further grind up.
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US Tech 100 Index
Hang Seng Index
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