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 16/11/22
US Indexes started the session with a gap up as PPI data showed inflation may really be weakening which confirms the CPI release. Later in the session sellers piled into the action as news hit of Russian missiles crossing over into Poland triggered a selloff. Concern is now that tensions between Russian and the US will escalate and that was shown in the jump in the USD, Oil and safe havens. Even though inflation may be easing, expect that any pause in rate rises will be months away which will lead to more volatility. Amazon is said to be laying off up to 10,000 workers in further signs that companies are tightening up which may not play well into higher share prices. Bond prices were again largely range bound and continued to consolidate recent gains even after the PPI data release. All in all it was a choppy session with apposing triggers which confused markets. I expect that all focus in the near term will be on how Russia and the US react to Poland news and whether tensions really do escalate which will see an unwind of risk assets. (All times AEDT) AUD Wage Price Index at 11:30am, GBP CPI and PPI Data at 6pm, EUR ECB Financial Stability Report TENTATIVE, CAD CPI Data at 12:30am, USD Retail Sales Data at 12:30am, GBP Monetary Policy Report Hearings ay 1:15am, EUR ECB President Largarde Speaks at 2am, USD Crude Oil Inventories at 2:30am and Day 2 G20 Meetings.
Asian markets will be tentative on the open after markets were spooked but the underlying bullish sentiment should continue to provide support. Hang Seng may struggle to kick on into new highs so watching for an unwind of yesterdays buyers.
The ASX200 is expected to open DOWN 5 points to flat as buyers were spooked by Russian Missiles news into the close.
Prices below as at 8:30am AEDT
SPI200 (Dec) overnight futures down 12 pts to 7141
SP500 up 34.48 pts to 3991.73
NASDAQ Composite up 162.19 pts to 11358.41
Dow Jones up 56.22 pts to 33592.92
FTSE100 down 15.73 pts to 7369.44
DAX40 up 65.21 pts to 14378.51
GOLD (Spot) up $6.85 to $1778.11 an ounce
COPPER futures US session (Comex Dec) down $0.0115 to $3.8220 a pound
OIL futures US Session (Nymex Dec) up $1.00 to $86.87
CRB Index up 2.20 pts to 284.36
AUDUSD trading at 0.6761
EURUSD trading at 1.0346
GBPUSD trading at 1.1865
USDJPY trading at 139.2700
USD Index US Session (ICE Dec) down 0.109 to 106.422
The SPI200/ASX200 spiked down into 7120 before finding buyers to rally price straight back up off the level. Sellers capped the run up into the US close at 7160 which could be the start of a lower high holding. Watching to see whether bulls ramp the open again or whether we see 7160 hold and selling pressure lower…technically price action looks heavy but the SPI200 does have its own mind and could easily brush aside the overnight weakness. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW did again react lower into the close and flushed below 33420 before recovering some of the losses into the close. Technically a lower high wants to hold so watching for a move down but I am not discounting another potential ramp higher in after market trading into the US open. The US Tech 100 spiked up into 12036 resistance before failing lower on Poland news. Price may look to hold up above 11842 and squeeze back up into highs but any new break back below 11842 opens up for a move down through 11700. The Hang Seng had a big session yesterday and held the gains into the close. Price action moved up into a big level so we may see some profit taking trigger a move down considering the overnight market sentiment. Watching for a minor flush higher and then a lower high to hold. The Nikkei was initially trying to move up through 28143 before news hit and price failed lower. The N225 found support into 27955 but watching for a potential break below this level today. If not, then expect buyers to again provide support for a grind up. The DAX held a retest up into 14430 before spiking down below 14246 support. The 14246 level will be key today to see whether either sellers continue the push lower or we get a bounce back up off the level. I do expect at least a bigger squeeze lower so biased for a move down. The UK100 could not get up through 7405 after data showing the unemployment rate rising. Price was already struggling into the US open and subsequent Ukraine news so watching for a continued push lower once European trade gets underway.
Cryptos were stuck in a narrow range with both Bitcoin and Ethereum holding below resistance levels. BTC did kick up into 17170 before moving lower while ETH failed again at 1285 resistance. I expect that recent buyers will be nervous with continued contagion concerns from the FTX fallout and now an escalation of the war in Ukraine. Watching both Bitcoin and Ethereum for further weakness.
Spot Gold was relatively buoyant considering the move up in the USD. I expect that the commodity may have found some safe haven buying although bulls were again capped at 1784. I am watching for a potential extension up into 1805 off a higher low. Crude Oil reacted up off 84.78 lows to squeeze out recent sellers. Price did spike up through 87.82 before ending below the level. I expect that there may be more upside to come so watching for a higher low to hold. If there is no escalation between Russia and the US/EU then expect price will head back down to 85.60. USD Index did spike lower after the PPI news but was quick to rally off the 105.035 support zone. Price was also supported by Poland missile news although the buying was not so convincing. I expect that the USD will chop around 106.263 until there is more clarity on the Ukraine situation.
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US Tech 100 Index
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