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 13/12/22
US Indexes went into short squeeze mode as prices were ramped higher from the open. I do not expect that this was sentiment driven but more of a short squeeze ahead of the CPI data release prior to the coming US session open. I also feel that there was some bargain hunting by traders expecting another stock market friendly inflation number (showing easing inflation), but I feel that the risk is that we may get a stronger than expected print and shares will head lower….considering the recent PPI release. US bond yields were higher for the session while the USD also ended with gains. Oil also found some buyers to run price higher in US trading suggesting that many traders were closing out some shorts and taking some risk off the table. ( Check out my daily view of key indexes here ) (All times AEDT) AUD NAB Business Confidence at 11:30am, EUR German Final CPI at 6pm, GBP Claimant Count and Average Earnings Index at 6pm, EUR German ZEW Economic Sentiment at 9pm, GBP BOE Financial Stability Report at 9:30pm, GBP BOE Gov Bailey Speaks at 10pm and USD CPI at 12:30am at 12:30am.
Asian markets are solely focused on inflation and the coming CPI release so I expect a choppy Asian session. Many will be expecting more weakness into the number and then a rally into shares. Prices extended on SPI and Nikkei so tentatively looking for shorts.
The ASX200 is expected to open UP 40 points as the SPI200 ramped into the US close to brush aside yesterdays negative ASX day session.
Prices below as at 9am AEDT
SPI200 (Dec) overnight futures up 49 pts to 7233
SP500 up 56.18 pts to 3990.56
NASDAQ Composite up 139.12 pts to 11143.74
Dow Jones up 528.58 pts to 34005.04
FTSE100 down 30.66 pts to 7445.97
DAX40 down 64.09 pts to 14306.63
GOLD (Spot) down $16.03 to $1781.27 an ounce
COPPER futures US session (Comex Mar) down $0.0710 to $3.8075 a pound
OIL futures US Session (Nymex Jan) up $2.15 to $73.17
CRB Index up 3.09 pts to 269.37
AUDUSD trading at 0.6747
EURUSD trading at 1.0535
GBPUSD trading at 1.2269
USDJPY trading at 137.6800
USD Index US Session (ICE Mar) up 0.146 to 104.625
The SPI200/ASX200 was all one way action higher up off 7178 and into 7230. This was a strange reaction considering the previous sessions selloff and may be a setup into the ASX open. Price is extended into 7230 so I am obviously watching for a lower high and squeeze on buyers. For any long, I will need to see a flush to clear out some buyers or a clear higher low hold to trap sellers for the squeeze up. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW ramped straight up off 34425 from the start of the European session. Price is clearly extended so I do expect that longs will want to lock in some gains ahead of the CPI release and price will edge lower so watching for a lower high. The US Tech 100 is also extended up into resistance around 11708 so may edge lower as buyers close longs ahead of CPI…much like the DOW. Watching for a lower high entry setup while also on guard for further upside. The Hang Seng moved lower during the day session and then again in overnight trade. Price held below 19370 which could trigger further selling into 19075 off the open. The underlying index may still want to go higher so watching also for the potential for a move up off 19370 to clear out some sellers. The Nikkei also extended higher into the US close and I do expect a push up into resistance around 28115 on the open. From there, we may see a squeeze lower to clear out some buyers so watching for a lower high as the underlying index looks set to hold a key lower high. The DAX was caught between 14268 and 14383 and did not show the same enthusiasm as the US. Still, the 14268 level could hold as a higher low which would see a positive open for the underlying share market…but I do not expect major bullishness prior to CPI. The UK100 was choppy and really lacked any clear direction as price action grinded lower. I expect a further grind into 7420 support but do not expect to see any clear lower high setup…more just pop higher and then grind lower.
Cryptos initially flushed lower as expected and then rallied to make back all the Asian sessions losses plus more. Both Ethereum and Bitcoin were risk on and correlated to the share market sentiment but both are a little extended. BTC moved back above 17100 so expected to see a lower high and squeeze on buyers. ETH pushed back up into 1274 where I would like to see some profit taking and a lower high.
Spot Gold moved lower as the USD rallied and price pushed down into 1780 potential support. I would like to see some minor buying off the level to build a lower high for a move down. Again, if the USD adds to gains and moves up, then gold will move down. Crude Oil flushed down into 70.30 lows from the start of the European session to trap some sellers prior to a spike higher through 72.86 to clear out some sellers. Watching to see if bulls can add to the gains and move up above 73.84. USD Index held support around 104.677 before moving up in the US session. Watching to see how buyers and sellers react around 105.210…buyers break above and hold, then looking for higher prices…bad for shares. Price holds below, then looking for a run lower…good for shares.
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US Tech 100 Index
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