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 14/12/22
US Indexes had a seesaw session as prices spiked after a better than expected CPI number and then gave back all the gains from the open and into the close. I expect that bulls will be happy to see that inflation is easing and will now be waiting to see what the Fed has to say about future rate rises in the coming FOMC meeting. Many will be expecting (potentially demanding) that the Fed will finally pivot and talk up slowing or pausing rate hikes. As expected, the USD and US Bond Yields took a beating and managed to hold the lows into the close as the stock market lost ground. Traders will now be looking ahead to assess what this means to corporate earnings as margins come under pressure from a weaker consumer who will continue to ‘pay more for less’. I feel that the reaction lower from the open today is again driven by intraday traders putting the squeeze on longs from the data release so we may see a grind higher today after support levels prove themselves. ( Check out my daily view of key indexes here ) (All times AEDT) AUD RBA Gov Lowe Speaks at 9:30am, JPY Tankan Manufacturing and Non-Manufacturing Index at 10:50am, GBP CPI at 6pm, USD Crude Oil Inventories at 2:30am, USD FOMC Statement at 6am and FOMC Press Conference at 6:30am.
Markets across the board reacted lower after the CPI release after clearing out resistance levels. The depth of the pullback may be a surprise to many bulls which may see a tentative open for Asian markets.
The ASX200 is expected to open UP 15/20 points and see an interesting open after US inflation data.
Prices below as at 9am AEDT
SPI200 (Dec) overnight futures up 16 pts to 7230
SP500 up 29.09 pts to 4019.65
NASDAQ Composite up 113.07 pts to 11256.81
Dow Jones up 103.60 pts to 34108.64
FTSE100 up 56.92 pts to 7502.89
DAX40 up 191.26 pts to 14497.89
GOLD (Spot) up $29.37 to $1810.64 an ounce
COPPER futures US session (Comex Mar) up $0.0465 to $3.8470 a pound
OIL futures US Session (Nymex Jan) up $2.22 to $75.39
CRB Index up 5.66 pts to 275.03
AUDUSD trading at 0.6856
EURUSD trading at 1.0635
GBPUSD trading at 1.2373
USDJPY trading at 135.5700
USD Index US Session (ICE Mar) down 1.179 to 103.585
The SPI200/ASX200 spiked close to 100 points after the CPI release and then gave back all the gains into the US close. Many stops were triggered in a thin market and then those buyers would have been squeezed back out of the action. I will need to see 7206 hold the action up on the open and then will be watching for a higher low to build for a move up. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW dropped over 1000 points after the initial spike which would have chopped up a lot of traders from the CPI release. I feel that the pullback would have surprised many considering the previous reaction to the CPI. Bulls will need to see 33925 hold otherwise a deeper move lower is on the cards considering the Daily price action is extended up. The US Tech 100 ended higher led by bargain hunters into the beaten down Meta. Like the DOW, the reaction lower would have caught many bulls off guard. Buyers will want to see the 11740/11708 zone hold otherwise we may see a bigger unwind lower. The Hang Seng spiked up through the days highs around 19655 and then price came straight back down to end around the level into the close. Price action remains in a rising channel so I am watching for an initial flush lower on the open to trap some sellers before we see a move up off a higher low. The Nikkei also took out the day sessions highs and resistance around 28115 before ending back below the level. Price remains trending higher as long as 27972 holds on the open. Watching for the level to hold and then a higher low to build for a move up. The DAX also saw the spike then dump as the other indexes. Price held below 14485 into the close which may mute the open today at the start of the European session. Still, with the good news out, I expect to see a higher low hold and provide bulls with support. The UK100 moved up off 7420 from the start of the European session and spiked into 7542 after the CPI release. Price ended below previous resistance at 7495 so watching the level for a break tonight and a higher low to hold. In saying that, this will depend on local CPI release ahead of the underlying index open but I feel traders will bet on the release to be weaker than expectations.
Cryptos gained on the USD weakness after the CPI release and managed to hold onto the bulk of the gains into the US close. Bitcoin 17470 to clear out shorts while Ethereum spiked through 1305 and into 1343 before fading lower. Prices for both BTC and ETH are extended in the short term so may need to pullback further to entice more buyers for another leg higher.
Spot Gold spiked up through 1807 and held above the level into the close. I feel that this will be the key level today to see whether buyers hold and pressure higher off a higher low, or whether we see some profit taking for a lower high move down. Crude Oil was happy to move up and through recent lower highs to clear out some shorts. Price is extended but ongoing supply constraints may provide support for a test up into 77.00 resistance. USD Index took a good hit lower as longer term bulls have to re-assess an easing inflationary environment. Price pushed down into 103.802 support which will be the focus today and I expect will hold into the FOMC late in the US session.
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US Tech 100 Index
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