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 FRIDAY 11/11/22
US Indexes continued to power higher after gapping up strong on the open. The US CPI data release was just what the bulls were waiting for…signs of a potential peak in inflation…lets see now if this flows on to the Consumer in the form of lower prices. Tech stocks led the charge ending up over 7% while the SP500 was up 5.5% and DOW lagged up a ‘measly’ 3.7%. The rally was broad based as the USD sank and US bond yields fell like a stone. Major FX pairs and commodities benefitted with the Dollar weakness as Gold and Copper spiked while Oil found support to fend off supply concerns. The rally was not really proportional to the fall in the CPI which shows the focus on inflation and the amount of money on the sidelines as funds would have flowed in hard on the news and risk assets reigned supreme. Traders are now betting on smaller rate hikes to come as the Fed eases its aggressive hiking stance which could mean there is some strong upside to come into share markets. The bigger picture remains for earnings as companies will continue to battle with higher costs of debt. (All times AEDT) JPY PPI at 10:50am, GBP GDP Data at 6pm, EUR EU Economic Forecasts at 9pm and USD Consumer Sentiment and Inflation Expectations at 2am.
Asian markets will be tough intraday as everything will gap up strong and I expect bulls will keep pushing on the open making longs sketchy in an very extended market. On the short side, I will expect to be scalpy as potentially the dynamics have now changed and bulls may pressure higher for days.
The ASX200 is expected to open UP 192 points after bulls went on a rampage thanks to US CPI data.
Prices below as at 8:30am AEDT
SPI200 (Dec) overnight futures up 190 pts to 7148
SP500 up 207.80 pts to 3956.37
NASDAQ Composite up 760.98 pts to 11114.15
Dow Jones up 1201.43 pts to 33715.37
FTSE100 up 79.09 pts to 7375.34
DAX40 up 479.77 pts to 14146.09
GOLD (Spot) up $47.64 to $1754.76 an ounce
COPPER futures US session (Comex Dec) up $0.0763 to $3.7763 a pound
OIL futures US Session (Nymex Dec) up $0.43 to $86.26
CRB Index up 2.34 pts to 282.12
AUDUSD trading at 0.6622
EURUSD trading at 1.0206
GBPUSD trading at 1.1717
USDJPY trading at 140.9000
USD Index US Session (ICE Dec) down 2.695 to 107.765
The SPI200/ASX200 had a very big overnight session with all sellers squeezed out of the action as price pumped higher. It seems like an over reaction to the CPI release as buy side algos were let loose. I will be happy to let the dust settle on the open as any longs will be difficult in an extended market and I will need to see a good flush lower before looking for long entries. For shorts, it will also be tough as the ASX will gap up and ETFs/funds will all be trying to buy so clear lower highs will be key. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW was all one way action again from the open but this time it was up. Price extended up through 33420 which brings in the 34170 as the next target. Like all other Indexes, I will need to see a good pullback to squeeze out some late buyers before looking for any long setup. Shorts will need to be off a clear lower high and I expect will need a lot of patience. The US Tech 100 looks set to add to gains with a push into 11700. Price action has rallied nearly 8% with no pullback so longs are off the cards for now until a clear flush lower and higher low…same general approach as with the DOW. The Hang Seng spiked 670 points after the CPI release and managed to hold the gains into the close. I expect price to open stronger as the US rallied further after the HSI close. The underlying index will gap up so I am watching for some continuation higher into 17005 before bulls potentially run out of steam intraday and lock in some quick gains. The Nikkei like the HSI, also rallied hard and ended a touch below resistance at 28050. I expect this level to be flushed on the open so will be watching to see if buyers can keep the pressure on or whether we see a minor pullback to short into…but I expect shorts will probably be short lived especially early in the session. The DAX spiked after the number and ended above 13970 resistance. Same approach as with other indexes, shorts off a clear lower high while I want to see aflush lower ideally into a level before looking for longs. The UK100 spiked through 7358 and has held a retest of the level which could see higher prices. Watching for some minor consolidation, ideally after some late buyers have been put back on the sidelines, for any long.
Cryptos made back some of their recent losses mainly thanks to the risk on mood of the share markets and the fall in the USD. Bitcoin and Ethereum managed to push back up into resistance areas where I will be watching to see how buyers/sellers react…will long term holders continue to hold or will they take the opportunity to see on any hint of renewed weakness.
Spot Gold continued with its rally thanks to the continued selloff into the USD. If the USD goes into a daily corrective move lower we should see Gold benefit and bulls press price higher. For now watching the 1763 level for a reaction from buyers locking in gains. Crude Oil was choppy after the CPI release as the weakness in the USD offset the over supply concern weakness into oil. Watching to see if 85.60 will hold and a higher low sees price rally into/through 87.82. USD Index tanked after the data showed inflation potentially peaking and price moved straight through key support levels. Watching to see if 107.775 holds in the near term but I suspect that the USD is correcting off major highs on a daily basis which will mean pressure will be lower.
Join Our TRADERS HUB DISCORD CHANNEL for updates and trade ideas (email email@example.com for the link)
US Tech 100 Index
Hang Seng Index
Disclaimer: the contents of this post are presented for informational purposes only. They should not be viewed as investment advice, nor a solicitation to buy or sell any financial securities. Investments in financial products are subject to market risk. Some financial products, such as currency exchange, futures, contracts for difference, options and warrants are highly speculative and any investment should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. Trading currency exchange, futures, contracts for difference, stocks, shares, options and warrants on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in currency exchange, futures, contracts for difference, options, stocks, shares and warrants you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with currency exchange, futures, contracts for difference, options, stocks, shares and warrants trading, and seek advice from an independent financial advisor if you have any doubts.