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 1/12/22
US Indexes had a massive run up into the close after Powells comments hit the spot for the bulls. The Nasdaq rallied hardest gaining 4.6% after the speech while the broader market SP500 and DOW rallied around 3%. Powell said that the Fed could slowdown the ‘pace’ of rate hikes as soon as December…but warned that the fight against inflation is far from over and they are still unsure of how high rates will need to go. Markets took it as a positive which may also have something to do with the end of month window dressing from funds. There is still a long road ahead as interest rates will be high (at what level is unknown yet but above 4.6%) for a long time to ‘restrict’ inflation. Also, shares may remain buoyant until there is a clear change in the unemployment rate which has been very resilient in the face of high inflation. At some stage, the higher cost of debt and credit will bite and hit jobs as corporates are forced to cut back. Bond yields fell over and the USD also nose dived so for now, risk on into the share market. Major Indexes are all extended into daily levels so price action may get choppy!! (All times AEDT) CNY Caixin Manufacturing PMI at 12:45pm, EUR German Retail Sales at 6pm, USD Core PCE Price Index at 12:30am, USD Unemployment Claims at 12:30am and USD ISM Manufacturing PMI at 2am.
Asian markets are going to have an enthusiastic open but difficult for intraday trading. Markets are very extended so no longs for me until some buyers are cleared out on a pullback…shorts will need time to confirm.
The ASX200 is expected to open UP 65 points after a big rally into the US close across the board.
Prices below as at 8:30am AEDT
SPI200 (Dec) overnight futures up 51 pts to 7360
SP500 up 122.48 pts to 4080.11
NASDAQ Composite up 484.22 pts to 11468.00
Dow Jones up 737.24 pts to 34589.77
FTSE100 up 61.05 pts to 7573.05
DAX40 up 41.59 pts to 14397.04
GOLD (Spot) up $18.66 to $1768.23 an ounce
COPPER futures US session (Comex Mar) up $0.1440 to $3.7835 a pound
OIL futures US Session (Nymex Jan) up $2.35 to $80.55
CRB Index up 4.24 pts to 279.76
AUDUSD trading at 0.6785
EURUSD trading at 1.0405
GBPUSD trading at 1.2059
USDJPY trading at 138.0400
USD Index US Session (ICE Dec) down 0.846 to 105.922
The SPI200/ASX200 spiked hard after the comments from Powell and followed the rest of the market higher. I expect a tough open for intraday and will need to see a flush lower to clear out some buyers before looking for a higher low. Shorts will take some time to build…if they do at all..so patience will be required. Expect bulls to be excited on the ASX open. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW ramped higher through 24385 into the close. I am basically watching for one of two things at this level…some profit taking and a lower high for a short setup or some consolidation around the level for a higher low to hold and another leg up. Will be a tricky session into an extended market. The US Tech 100 will be much the same plan of attack as the DOW as price extended into 12010. Price action will need to take some time to play out after such a big move into a big level end of month. The Hang Seng added to recent gains in the overnight action and may look to play catchup with the US. Watching for an extension up into 19163 on the open and then potentially a selloff to clear out some buyers. The Nikkei also joined the party with a ramp up into 28360. Like other major Indexes, intraday trades will take some patience so I will wait for the opening excitement to clear before looking for a setup. Watching for a spike higher and then a squeeze lower off a lower high. The DAX extended up through 14572 and into a daily level around 14620. Expecting some chop as bulls try to hold the level for another leg up. Watching for a lower high and squeeze on buyers before any further rally. The UK100 also extended higher and I expect that there is more up side tonight into 7642. From there I expect some late buyers to get trapped so looking for a squeeze lower. Any long will need to be off a clear higher low.
Cryptos also joined in the party with a move up into resistance levels. Bitcoin extended up into 17100 and may see more bulls join in during the Asian market session. For any long I will need to see some minor consolidation around 17100 and then a higher low on the lower timeframe chart. For a short, I want to see a lower high hold to put pressure on late buyers. Ethereum is the same plan of attack as price traded into 1289 resistance.
Spot Gold lifted with the USD selloff. Watching for price to retest into and hold 1762 for a long or break back below the level. If the USD continues lower, then watching for the long. Crude Oil had a better session with a rally from the USD selloff. Price edged up through 79.78 and is holding the recent gains. If price holds a retest of 79078 then watching for a run up into 82.20. USD Index fell over after the Powell comments and broke back below 106.263. I am watching for price to hold below this level and find more selling to pressure down into previous lows.
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US Tech 100 Index
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