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 15/12/22
US Indexes came under fire after the FOMC lifted interest rates and signalled a ‘higher for longer’ interest rate outlook. The Fed lifted there peak interest rate target from 4.6% to 5.1% which saw sellers pile into the market. I expect that there will be flow on tonight from sellers as the key indexes hold a lower high. There will have to be a re-adjustment from investors for their expected earnings outlook as companies now potentially have to deal with a higher debt repayment schedule and a more constrictive growth environment. US bond yields spiked but then faded into the close as the USD held below support. I expect that yields and the USD will be supported in the near term on the back of the higher rate environment and may also find a safe haven bid on expectations that the Fed may push the economy into recession. Looking at the past year, the DOW has been resilient as price is around 8% off all time highs and over 15% off lows…compared that to the Nasdaq which is 41% off highs and 11% off lows….easy to see where stock portfolios have been concentrated and what sector suffers most form higher interest rates. ( Check out my daily view of key indexes here ) (All times AEDT) JPY Trade Balance at 10:50am, AUD Employment Change and Unemployment Rate at 11:30am, CNY Retail Sales, Industrial Production and Unemployment Rate at 1pm, CHF SNB Monetary Policy Assessment and Policy Rate at 7:30pm, GBP Monetary Policy Summary and Official Bank Rate at 11pm, EUR ECB Main Refinancing Rate and Monetary Policy Statement at 12:15am, USD Retails Sales Data and Empire State Manufacturing Index at 12:30am and EUR ECB Press Conference at 12:45am.
Asian Markets are expected to come under pressure on the open. The Nikkei and the SPI may look to react up off support to trap buyers while the Hang Seng missed the selloff so may open very weak.
The ASX200 is expected to open DOWN 60 points after the SPI200 sold off late in the US session.
Prices below as at 9am AEDT
SPI200 (Dec) overnight futures down 57 pts to 7143
SP500 down 24.33 pts to 3995.32
NASDAQ Composite down 85.92 pts to 11170.89
Dow Jones down 142.29 pts to 33966.35
FTSE100 down 6.96 pts to 7495.93
DAX40 down 37.69 pts to 14460.20
GOLD (Spot) down $3.30 to $1807.34 an ounce
COPPER futures US session (Comex Mar) up $0.0210 to $3.8630 a pound
OIL futures US Session (Nymex Jan) up $1.89 to $77.28
CRB Index up 1.60 pts to 276.63
AUDUSD trading at 0.6863
EURUSD trading at 1.0683
GBPUSD trading at 1.2427
USDJPY trading at 135.4600
USD Index US Session (ICE Mar) down 0.327 to 103.240
The SPI200/ASX200 moved below 7157 and flushed 7137 after the FOMC release. Price looks heavy and could easily hold a lower high but we may see the usual bargain hunting and support on the open to squeeze out sellers. Ideally, looking for a lower high and move down as the longer term charts momentum (30min) is down. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW dumped 660 points after the number before grinding back up into the close. Price held below 34385 and may extend lower in the coming US session if the European data out tonight has the same tone (ECB and BOE). The US Tech 100 may also see an extension lower if sellers hold price below 11933. If we see a lower high hold, then I am looking for a move down into 11492 daily support. With the change in the interest rate outlook, it is hard to see buyers taking control in the US session later. The Hang Seng missed the selloff action after the FOMC release so may play catchup on the open. Still, I want to see a flush higher to trap buyers if the Hang Seng wants to move lower. The underlying Index looks heavy and set to hold a lower high. The Nikkei moved lower off the day sessions highs and resistance around 28179. Price spiked lower into 27912 before finding support so I expect a choppy open and potentially for price to trap some buyers on a grind up prior to a selloff. The DAX was largely rangebound as they have a lot to deal with tonight in the way of economic data and the ECB rate release. I expect that price will flush the lows around 14383 but then rally back above to hold in the range prior to ECB. From there, it will depend on the statement and outlook for interest rates but I am looking for a push into 14263. The UK100 price action looks much the same as the DAX so watching for 7502 to hold the action down and a lower high to pressure price down into 7428. Expect levels to be flushed ahead of the Official Bank Rate release.
Key Cryptos gave back earlier gains to spike lower after the FOMC release. Both Bitcoin and Ethereum rallied up into resistance ahead of the rate hike to trap bulls before the spike lower. ETH is sitting on support at 1305 and may grind higher to suck in some buyers before another leg lower. For a long, I would like to see a failed retest into 1305 and a higher low hold. BTC is much the same but more likely to hold a lower high for a flush down into 17470.
Spot Gold spiked lower off 1807 but then rallied back to end just below the level. Price does look ready to rollover but I feel that the USD will hold below support and see more unwinding of longer term buyers as we head towards peak inflation. Watching for chop around the level and then a higher low and squeeze up. Crude Oil moved up to add to recent gains. Price moved up through 77.00 and has a minor level at 77.82 which may be the area to be flushed prior to a squeeze lower. Higher Oil means inflation which could scare bulls. USD Index fended off a spike higher to end below 103.802 support into the close. Price momentum is in a prime position to expand lower which means that bears will look to push price lower.
Join Our TRADERS HUB DISCORD CHANNEL for updates and trade ideas (email email@example.com for the link)
US Tech 100 Index
Hang Seng Index
Disclaimer: the contents of this post are presented for informational purposes only. They should not be viewed as investment advice, nor a solicitation to buy or sell any financial securities. Investments in financial products are subject to market risk. Some financial products, such as currency exchange, futures, contracts for difference, options and warrants are highly speculative and any investment should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. Trading currency exchange, futures, contracts for difference, stocks, shares, options and warrants on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in currency exchange, futures, contracts for difference, options, stocks, shares and warrants you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with currency exchange, futures, contracts for difference, options, stocks, shares and warrants trading, and seek advice from an independent financial advisor if you have any doubts.