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 7/12/22
US Indexes again sold lower from the open as investors took risk off the table from the recent run up. Inflation and rate rise concerns had the tech sector leading the charge lower as recession talk again spook traders. Many still feel that the Fed has it wrong with inflation and should ease off on further rate rises as data shows inflation has potentially peaked which makes next weeks FOMC meeting key for bulls. Oil again took a hit on demand concerns even as China eases covid restrictions. US Bond yields were generally contained while the USD moved up and looks set to add to the gains in the coming session. All in all, it is still a mixed market with risk off contained to shares and Oil while BTC and ETH went sideways and Gold and Copper held up well and European Indexes did not see the same pressure in selling. (All times AEDT) AUD GDP at 11:30am, CNY Trade Balance TENTATIVE, EUR German Industrial Production at 6pm, CAD BOC Rate Statement and Overnight Rate at 2am and USD Crude Oil Inventories at 2:30am.
Asian markets will see a mixed open as the SPI200 was weak in overnight trade along with the Nikkei while the Hang Seng was stronger than would have been expected.
The ASX200 is expected to open DOWN 40 pts after the SPI200 again sold lower along with the US markets.
Prices below as at 9am AEDT
SPI200 (Dec) overnight futures down 37 pts to 7255
SP500 down 57.58 pts to 3941.26
NASDAQ Composite down 225.05 pts to 11014.89
Dow Jones down 350.76 pts to 33596.34
FTSE100 down 46.15 pts to 7521.39
DAX40 down 104.42 pts to 14343.19
GOLD (Spot) up $2.18 to $1771.00 an ounce
COPPER futures US session (Comex Mar) up $0.0270 to $3.8220 a pound
OIL futures US Session (Nymex Jan) down $2.68 to $74.25
CRB Index down 2.90 pts to 267.45
AUDUSD trading at 0.6688
EURUSD trading at 1.0468
GBPUSD trading at 1.2131
USDJPY trading at 137.0000
USD Index US Session (ICE Dec) up 0.276 to 105.515
The SPI200/ASX200 moved lower along with the US and saw a minor short squeeze into the close. Sellers were again in control from the start of the overnight session so it will be interesting if price gets ramped from the open again. I expect after the RBA raised rates, many might start to feel the pinch so see the SPI holding lower highs today. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW added to recent losses and pushed below 33660 before some short covering into the close. Watching to see if price can squeeze out more shorts through Asian and European trade or whether a move down into 33290 is on the cards. Key level is 33660 to see how buyers react. The US Tech 100 also was hit from the US open and pushed down into 11492 to complete the ‘offer to bid’ move (12055 to 11492). I will be watching to see if buyers again react higher off the 11492 zone. The Hang Seng was relatively strong compared to the US markets but could be just a setup for a negative day and unwind of longs. Key resistance is at 19520 which if it holds, I expect to see a selloff. I would ideally like to see an opening drive up into 19520 to trap some buyers before a lower high holds for a move down. The Nikkei sold lower from the start of the European session and found some buyers to bounce off 27536 into the US close. Price action was much the same the previous overnight session before an opening rally so we could see much the same off 27633 and a higher low from the open today. The DAX moved down below 14339 into the US close as bulls were squeezed out of the action. Key level is at 14339 for either a test and hold for a lower high and further downside or a move back up above the level off a higher low. The UK100 looks defiantly strong as price reacted hard up off 7511 support. The problem is that a key lower high has held at 7600 so any further downside in US markets could see the UK100 play catchup and fall over through 7495. Key level is 7542 to either hold for a move up or break for a move down.
Cryptos were very well contained and range bound through all of the three main trading sessions. Bitcoin held above 16874 but below 17100 as both new buyers and sellers sat on the sidelines. Ethereum edged below 1258 but lacked an conviction from sellers. The price action for both BTC and ETH is not really hinting at a move either way so I will need to see more price action unfold today but expect to be biased down.
Spot Gold held minor support at 1768 even as the USD edged higher. I expect a flush of the 1768 level at least to take out sell stops before either a move up or move down through 1762….I am biased down though with eyes on the USD for continuation up. Crude Oil continued lower in the path of least resistance into 73.89 where a selloff was previously supported. I expect that OPEC may not be happy with this move so may start to fire up the production speech again. Price action is ripe for a short squeeze so watching for a higher low…again. USD Index moved up off a higher low around 104.920 and looks ready to extend up into 106.263 as long as the 105.620 level breaks. If not then I expect more chop around 105.035.
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US Tech 100 Index
Hang Seng Index
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