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 12/12/22
US Indexes were generally holding up okay until a late surge lower into the close. Stronger than expected PPI data held buyers on the sidelines as traders had to digest the new data release. PPI (Producer Price Index) data pointed once again to resilient inflation and again many bulls may have come out of the gate too hard looking to pick up some bargains on the recent bounce higher. The Fed is expected to raise rates by 50 basis points this week but the new data has many having to re-assess expectations of a pivot from the Fed and move back to a ‘higher rates for longer’ scenario. US Bond yields moved higher as the USD also gained for the session. The rally into the USD generally pressured dollar denominated assets lower such as Gold, Oil, Copper, Ethereum and Bitcoin. The three major US indexes now look set to push down into new lows ( Check out my daily view of key indexes here ) through key support levels as I feel that the PPI data has now offset the CPI bullishness. (All times AEDT) GBP GDP, Goods Trade Balance and Industrial Production at 6pm, USD Federal Budget Balance at 6am and CAD BOC Gov Macklem Speaks at 7:25am.
Asian markets will find a weak open with the potential for a good selloff into the SPI200 and Nikkei. The Hang Seng is still showing some strength so may bounce off support.
The ASX200 is expected to open DOWN 30 points after a sharp selloff into the close saw the SPI200 push into negative territory for the overnight session.
Prices below as at 9am AEDT
SPI200 (Dec) overnight futures down 35 pts to 7183
SP500 down 29.13 pts to 3934.38
NASDAQ Composite down 77.38 pts to 11004.62
Dow Jones down 305.02 pts to 33476.46
FTSE100 up 4.46 pts to 7476.63
DAX40 up 106.16 pts to 14370.72
GOLD (Spot) up $8.21 to $1797.30 an ounce
COPPER futures US session (Comex Mar) down $0.0270 to $3.8565 a pound
OIL futures US Session (Nymex Jan) down $0.44 to $71.02
CRB Index down 0.12 pts to 266.28
AUDUSD trading at 0.6795
EURUSD trading at 1.0540
GBPUSD trading at 1.2259
USDJPY trading at 136.5600
USD Index US Session (ICE Dec) up 0.144 to 104.900
The SPI200/ASX200 took a big hit into the close as longs unwound with the late US selloff. Price action on the ASX200 looks very weak so it will be interesting to see whether bulls will try to support the open again. Watching for at least a squeeze higher to clear out some sellers prior to a lower high and short…7178 will be the key level on the open. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW held a key lower high at 33925 with the selloff into the close. I expect to see further weakness today and into the FOMC later in the week (end of Wednesdays US session). Ideally, watching for a retest up into 33660 and then a lower high to hold. The US Tech 100 is pushing back down into a daily level after holding a lower high at 11740. If the level breaks, then there will be a lot of sell stops below that will be targeted and we could see a good selloff lower. Like the DOW, looking for a flush higher to clear out some shorts prior to a lower high holding. The Hang Seng found strength during the day session to push up through 19625 and then tested back into the level in the overnight session. This will be the key level for me today to see whether bulls defend it for a run higher or whether the general negativity sees a break down and move into 19383 or lower. The Nikkei has some major divergence off 27970 that could see a big move lower. Price flushed 27970 before failing off the level into the close. Ideally, I would like to see an opening squeeze higher to trap some buyers off 27775, and then for a lower high to hold for a move down. The DAX was relatively strong compared to US indexes after the PPI release. Price made back the PPI losses and ended around 14339. This could be a sign of strength for a move up or could be bulls holding price awaiting the share market open today where a selloff could follow. Watching for further weakness and a lower high to drive price lower. The UK100 was much the same as the DAX with relative strength compared to the US. Price did end below a support level at 7465 so watching to see if sellers continue the push lower today.
Cryptos were heavy into the US close and then followed that up with a range bound weekend session. Both Ethereum and Bitcoin have held a minor lower high so may find more weakness today. I expect that BTC and ETH are awaiting to see how the USD opens and trades today along with the US tonight.
Spot Gold held up well in the face of USD strength. Price held above 1787 but also held below 1807 and remains in a short term uptrend. It will be interesting to see if Gold diverges from the USD and can find some safe haven buying although I still expect if we see Dollar strength, gold will head lower. Crude Oil remains under pressure and the PPI release will keep the pressure on to the downside. If 72.86 holds today, then expect that we will continue to see lower prices. USD Index held onto some gains after the PPI release and is at a level and showing price action that could go either way. Price could easily head lower off 104.873 and into 103.802 or find a bid off higher lows (which may be more likely today after PPI) to edge up into 105.642.
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US Tech 100 Index
Hang Seng Index
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