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 24/11/22
US Indexes ended the session with gains thanks largely to the FOMC minutes into the close of the session. The reaction to the minutes was relatively contained with the bulk of the bullish work done in previous sessions. The Fed suggested that they ‘slow rate hikes soon’ and ease off on the outsized 75 basis point hikes. This is something that the market has expected for a while hence the muted reaction up into the close. US bond yields moved lower while the USD added to its move down after already taking a hit during the European session. Weaker housing and manufacturing data out overnight re-affirmed the view that the Fed will slow rate hikes into next year as the economy shows signs of cooling. Tech stocks did well on expectations of rate hikes slowing while energy shares weakened as Oil took a hit after US inventories showed a larger than expected drop in stockpiles and news that G7 countries will put a price cap on Russian oil around $65/70 a barrel. (All times AEDT) JPY Flash Manufacturing PMI at 11:30am, EUR German ifo Business Climate at 8pm, GBP MPC Member Ramsden Speaks at 8:45pm, GBP MPC Member Pill Speaks at 9:30pm, USD Durable Goods Orders Data at 12:30am, USD Unemployment Claims at 12:30am, EUR ECB Monetary Policy Meeting Accounts at 11:30pm and USD Bank Holiday.
Asian markets had a relatively contained overnight session with the Nikkei moving sideways, SPI holding below resistance and Hang Seng edging higher. I expect that we may see a choppy start to the session.
The ASX200 is expected to open UP 10/15 points after the SPI200 was well contained overnight.
Prices below as at 8:30am AEDT
SPI200 (Dec) overnight futures up 5 pts to 7254
SP500 up 23.68 pts to 4027.26
NASDAQ Composite up 110.91 pts to 11285.32
Dow Jones up 95.96 pts to 34194.06
FTSE100 up 12.40 pts to 7465.24
DAX40 up 5.24 pts to 14427.59
GOLD (Spot) up $9.60 to $1749.60 an ounce
COPPER futures US session (Comex Dec) up $0.0285 to $3.6430 a pound
OIL futures US Session (Nymex Jan) down $3.56 to $77.39
CRB Index down 2.37 pts to 276.87
AUDUSD trading at 0.6732
EURUSD trading at 1.0397
GBPUSD trading at 1.2052
USDJPY trading at 139.6100
USD Index US Session (ICE Dec) down 1.090 to 106.025
The SPI200/ASX200 generally went sideways as price held in a range between 7259 and 7230. Price held below resistance at 7259 which I expect will be the target for a stop loss hunt and short squeeze on the open. With the muted reaction to the FOMC minutes overnight, it is hard to see bulls charging higher on the ASX open although the trend remains up. I expect to see a pullback and higher low hold later in the session for a move up into the close. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW was in negative territory prior to the FOMC minutes being released when bulls pushed price back up into resistance. The 34180 level will be the focus today although I do not expect a lot of action ahead of the Thanksgiving holiday in the US. The US Tech 100 was also a little choppy but managed to end above 11790 resistance into the close. I expect that price will extend up into test 11912 so watching for a minor flush lower and then a higher low to hold. The Hang Seng edged higher after a choppy day session. Price held above 17572 but continues to lack conviction for a move up. The underlying index looks heavy so I am watching for a selloff if price holds below 17756. If price wants to move above the level, then expecting a grind up. The Nikkei was well contained in overnight trading with price action holding above 28325 but buyers were capped all session. Looking for a minor flush lower at open and then a higher low to hold above 28325 for a move up. If price consolidates at a lower price (ideally below 28325) then expecting a lower high and unwind of buyers. The DAX moved back below 14435 but held above 14380 in a choppy session. I feel that many were expecting a rally up into 14620, and positioned long, so they may be the fuel for a move down through 14380 if a lower high holds. If not, then watching for a grind up. The UK100 also had a lacklustre session and was generally caught in a narrow range between 7453 and 7475 for the bulk of the session. The 7475 and 7453 levels are my focus today for trade setups and I feel that a squeeze lower may be on the cards.
Cryptos edged higher with Bitcoin and Ethereum both moving up through resistance levels. BTC is finding some sellers below 16740 but I am watching to see if buyers can continue to push higher in the Asian session. Looking for a minor higher low to hold and extension up into 16740. ETH is struggling to get up and through 1174 so watching for failure off the level.
Spot Gold flushed 1730 and then ramped higher from the start of the US session. Watching to see if bulls can keep up with the momentum higher so looking for a higher low to hold off or above 1746. Crude Oil took another hit after US inventory data and pushed down below 78.13. Price is extended lower which I expect will tempt buyers although it is too early to buy without a clear higher low ideally above 78.13. I expect that sellers will pressure price into lows around 75.72 as there remains negative headwinds for bulls. USD Index took a big hit below 107.270 but this was from the start of the European session. The question is now whether we will continue to see an unwind of longer term buyers which I expect will be the case with the Fed largely expected to slow the pace of rate hikes. With the daily getting extended the downside, we could still see a push higher before a longer term lower high holds and a bigger move down.
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US Tech 100 Index
Hang Seng Index
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