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 MONDAY 21/11/22
US Indexes opened stronger Friday as they followed on from the positive European session. Prices faded during the session but did manage to hold the gains into the close. The yield curve on US bonds has further inverted (2-year bond yields are higher than 10-year yields) which generally points to a recession although markets largely brushed this aside in the hopes that the Fed will then have to cut rates potentially as early as next year. Central Banks one job in a nutshell is to control inflation via rate rises and the US is now facing interest rates above 5% which previously were expected to peak below the level…so no easing off on rate hikes yet no mater what the market wants. CPI and PPI readings will need to be consistently lower for the Fed to start to reign back on rate rises, but for now the Consumer remains strong so coming economic data will continue to be the focus. I expect that the market will continue to anticipate a low but the data is not ‘clearly’ supportive as yet. With oil nosediving on China Covid concerns, I expect to see further swings lower in the near term. (All times AEDT) EUR German PPI at 6pm, GBP MPC Member Cunliffe Speaks at 8:05pm and EUR Buba President Nagel Speaks at 4:30am.
Asian markets should open stronger although watching for further pressure in to the Hang Seng to test lows. The day sessions have generally been bid up with the bulk of the action in the overnight sessions…so expecting the same today.
The ASX200 is expected to open UP 25 points after a good finish from the overnight SPI200 into the weekend.
Prices below as at 8:30am AEDT
SPI200 (Dec) overnight futures up 24 pts to 7192
SP500 up 18.78 pts to 3965.34
NASDAQ Composite up 1.10 pts to 11146.06
Dow Jones up 199.37 pts to 33745.69
FTSE100 up 38.98 pts to 7385.52
DAX40 up 165.48 pts to 14431.86
GOLD (Spot) down $9.54 to $1750.82 an ounce
COPPER futures US session (Comex Dec) down $0.0500 to $3.6380 a pound
OIL futures US Session (Nymex Jan) down $1.29 to $80.11
CRB Index down 1.20 pts to 276.40
AUDUSD trading at 0.6673
EURUSD trading at 1.0325
GBPUSD trading at 1.1890
USDJPY trading at 140.3700
USD Index US Session (ICE Dec) up 0.273 to 106.865
The SPI200/ASX200 ended the week with a rally pushing up into resistance around 7207. After holding support around 7116 and then clearing out the recent lower highs, I expect to see more bullish action from the open. Watching for a test into 7207 on the open and then some short term profit taking but ultimately for the anchor to the uptrend at 7170 to hold. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW continues to consolidate the recent gains from the CPI spike. Price broke up through 33678 Friday and held a higher low that will tempt some new bulls into the action today. Watching for a test into 33678 and then a higher low for a move up through 33815. The US Tech 100 has also consolidated the recent CPI spike but tech stocks are still uncertain in the higher interest rate environment. Sellers reacted down off 11807 resistance from the US open but could not recover the same as the DOW. Any failure to get back up to 11807, then a lower high could hold to send price down through 11586. Still, I am watching for a minor flush down to hold a higher low and a grind up into the US open. The Hang Seng came under pressure during the day session Friday and sellers continued to hold the action down into the close. The lower high which held at 18105 in overnight trade, could see an opening flush down into 17805/17740 where I would expect to see some buyers provide support. The Nikkei was generally range bound between the day sessions highs and lows into the US close. Buyers provided support into 27892 and sellers capped a rally into 27977. I expect that the same range will be the focus today and will look for an opening push up into 27977 before another reaction lower. The DAX is starting to work its way up and out of the recent consolidation between 14148 and 14360. Price held a higher low at 14360 and ended at 14430 resistance into the close. Watching for the 14430 level to hold a bid and see a drive up towards the 14610 area. The UK100 pushed up into 7416 resistance at the start of the European session before failing lower off the level. The 7372 level will be key today to see if it holds as a higher low which could trigger a move up through 7416.
Cryptos edged lower over the weekend with Bitcoin and Ethereum pushing down below where they closed into the end of the US session. Expecting BTC to test into 16440 on the open before finding some buyers to move back up. With ETH, I expect to see a weaker open into 1174 and much the same as BTC with a rally off a higher low. I do not expect to see a big move lower today ahead of the US open…but with the current sentiment into the Crypto space and the recent FTX blowup, anything could happen so know your risk levels.
Spot Gold struggled to find any buyers with a move down off 1763 and below 1754. If the USD starts to find another bid and move up, Gold will again come under pressure and move down so watching for a lower high off 1754. Crude Oil saw a big flush down through 81.36 as buyers disappeared but price action did manage to recover some of the losses into the US close. The losses came as China continues to battle Covid cases and a faltering economy. Watching to see if price will test back up into 81.36 and if sellers keep the pressure on for a lower high to hold. USD Index has held a nice base at 106.263 after the flush down into 105.035. Price action looks ready to move up through 107.270 and make back some of the recent losses.
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US Tech 100 Index
Hang Seng Index
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