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 TUESDAY 22/11/22
US Indexes opened flat and traded in a relatively tight range for the session. Price action is showing signs of contracting lower off recent minor highs which may be the prelude to another leg higher. Traders were focused on the fresh Covid concerns out of China and were happy to remain on the sidelines not adding any new risk to portfolios. Investors also had to contend with pushback from Fed officials on a pivot sooner rather than later. Officials said overnight that they feel that a move from 75 basis points rate rises to 50 is appropriate but to expect a pivot to stop rate hikes is a long way in the future as high inflation lingers. Focus will now be on the FOMC meeting minutes to be released later this week. Oil remained under pressure from China lockdown concerns while the USD made its way higher again and US Bond yields rallied. Not much in the way of economic data today or tonight so expecting to see the indexes again rangebound or edge lower. (All times AEDT) AUD RBA Gov Lowe Speaks at 6pm, EUR Current Account at 8pm, CAD Retail Sales Data at 12:30am, USD Richmond Manufacturing Index at 2am, USD FOMC Member Mester Speaks at 3am and USD FOMC Member Bullard Speaks at 6:45am.
Asian markets expected to open mixed as the Hang Seng edged lower while SPI and Nikkei moved up. The SPI saw chop in the final hours of the session so open is key and could go either way. Watching for opening weakness on HSI.
The ASX200 is expected to open UP 15/20 points after the SPI200 lifted up through resistance in the US session.
Prices below as at 8:30am AEDT
SPI200 (Dec) overnight futures up 32 pts to 7180
SP500 down 15.40 pts to 3949.94
NASDAQ Composite down 121.55 pts to 11024.51
Dow Jones down 45.41 pts to 33700.28
FTSE100 down 8.67 pts to 7376.85
DAX40 down 51.93 pts to 14379.93
GOLD (Spot) down $12.29 to $1738.53 an ounce
COPPER futures US session (Comex Dec) down $0.0520 to $3.5800 a pound
OIL futures US Session (Nymex Jan) down $0.05 to $80.06
CRB Index up 0.12 pts to 276.52
AUDUSD trading at 0.6603
EURUSD trading at 1.0238
GBPUSD trading at 1.1821
USDJPY trading at 142.1100
USD Index US Session (ICE Dec) up 0.911 to 107.737
The SPI200/ASX200 ended the session caught in a tight range while the US came under pressure. Price was locked between 7183 and 7176 so I expect a flush lower on the open before any further rally. Its seems that bulls were happy to lock in price above 7170 which could mean that the ASX finds some sellers into the open. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW was in chop mode during the US session as price initially flushed up through 33820 to trigger stops and then straight down in to 33560 before bouncing back up. It is the second session price has been locked between the two levels so feels like its is getting supported. Looking for a minor flush and higher low above 33560. If the support breaks, we could get a good unwind of longs and move down into 33425. The US Tech 100 edged lower and was more biased down than the DOW. Price pushed into 11555 potential support so watching to see if buyers are happy to provide support although this may be a tough ask with bond yields pushing back up. Still, watching for a flush of 11555 and then a higher low for a move up as share markets still look defiantly buoyant. The Hang Seng remained heavy in overnight trading with a lower high holding at 17740. Price held support at 17610 but I feel that the China covid news may be the trigger for another leg down today. Watching for a opening drive lower and then a lower high for shorts. Momentum is in a prime position for expansion down. The Nikkei reversed the days losses and rallied in overnight trade. Price held higher lows and pushed up into 28090 which I expect will be the target to break for bulls today. Watching for an opening flush lower and then a higher low for the later break above 28090. If price action breaks below 27977, then watching for a lower high and short setup. The DAX had a rather uncertain session with lingering buyers holding price action above 14360 into the close. Sellers were happy to defend 14430 again so watching for a lower high and a squeeze on recent buyers for a move down in the European session. The UK100 pushed up into 7416 resistance again and is showing signs of failure again. With slowing momentum up into the level, I am watching for a lower high and squeeze on buyers into 7364 and lower.
Cryptos have been spooked by fresh ‘blowup’ concerns an potential major selling into Bitcoin. Sellers were in force into Ethereum and Bitcoin from the open, and both are on the cusp of another major spike lower. BTC I expect will target a move below 15580 and any short term buyers off the level to be the later fuel for the move down. ETH is holding above 1077 for now but I expect that the negative sentiment will keep new buyers out and pressure lower for a potential move down to 1018.
Spot Gold played out to plan and moved down off 1754 as the USD rallied. Price has extended into 1730 where we may see some buyers dip their toes in the water and provide short term support. Ultimately, if the USD continues up gold will continue down which looks probable at this stage. Crude Oil saw a massive flush lower at the start of the US session to clear out the lows before bouncing back up. Price is just below resistance at 80.36 which I expect to be the target of a stop hunt and flush up through the level. If price can hold above 80.36 then a good short squeeze and move up is on the cards. USD Index moved to plan with a move up above 107.270. If price continues to consolidate above the level as momentum eases, then I would expect to see more gains and a move higher into the dollar in European or US trade.
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US Tech 100 Index
Hang Seng Index
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