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 7pm and DOW and USTech100 at 1:30am .
OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 21/12/22
US Indexes managed to fend off another weak session as traders digested the unexpected policy pivot from the BOJ (Bank Of Japan). European markets opened down but managed to claw back the losses early in the session which provided support for the US open. The BOJ said that they will let longer term interest rates rise which is in line with global markets tightening policies to combat inflation. Japan is a big supplier of funding for global markets so the fact that more returns can be attained in local markets is an issues for share and bond markets. The USD took a hit after the BOJ release and Gold rallied on the dollar weakness while US Bond yields jumped. The YEN also spiked which pressured the USD and dragged in some safe haven bids. I expect that this will only strengthen the bears resolve and add to the concern for a recession to pressure share markets lower as economic data plays catchup with the Feds tightening this year and we see further signs of a restrained US consumer less willing to spend. Expect that the tightening will also flow through in time to company balance sheets which makes coming earnings interesting. ( Check out my daily view of key indexes here ) (All times AEDT) AUD MI leading Index at 10:30am, CAD CPI Data at 12:30am and USD Consumer Confidence at 2am.
Asian Markets may see further weakness today depending how the Nikkei trades. I expect that the Nikkei will see increased volatility as traders have had time to digest the BOJ news. Lower highs and Higher lows will be key for entry setups.
The ASX200 is expected to open UP 45 points after the SPI200 made back most of the day sessions losses in overnight trade.
Prices below as at 9am AEDT
SPI200 (Mar) overnight futures up 58 pts to 7025
SP500 up 3.96 pts to 3821.62
NASDAQ Composite up 1.08 pts to 10547.11
Dow Jones up 92.20 pts to 32849.74
FTSE100 up 9.31 pts to 7370.62
DAX40 down 58.21 pts to 13884.66
GOLD (Spot) up $30.17 to $1817.89 an ounce
COPPER futures US session (Comex Mar) up $0.0248 to $3.8078 a pound
OIL futures US Session (Nymex Jan) up $0.90 to $76.09
CRB Index up 1.71 pts to 272.27
AUDUSD trading at 0.6677
EURUSD trading at 1.0625
GBPUSD trading at 1.2179
USDJPY trading at 131.7700
USD Index US Session (ICE Mar) down 0.747 to 103.597
The SPI200/ASX200 took a hit after the BOJ release but managed to make back the losses in the thin overnight session. Price action looks heavy as the 7050 level held into the US close. It will be interesting to see if we once again get the opening ramp higher which I expect has been to suck in buyers. Watching for a lower high off the 7039 area as the linger term ASX200 looks primed for another leg down. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW edged its way up off 32622 holding minor higher lows. I expect that bulls will at least test up into the 33047 level where I will be looking for further selling pressure. The DOW, along with other major indexes, are consolidating lows as momentum down eases. This to me points to the potential for further downside to come. The US Tech 100 held below 11135 as buyers were capped into the level. I expect that the selling pressure will remain but am on guard for some bargain hunting and a squeeze higher through 11135 which would trigger some stop losses from shorts. The Hang Seng flushed back up into the days highs around 19230 before moving lower into the close. I will be watching for the 19230 level to hold and a lower high to continue to pressure price lower. Longer term I expect we will see a move down into 18720 as the underlying index is rolling over. The Nikkei remained under pressure in the overnight session as sellers held lower highs into the US close. The anchor to the move down is at 26465. I expect that there may be some good opportunities with the increased volatility. Looking for any break above 26465 to lead to long setups and any lower high below 26465 to lead to a squeeze down through 26290. The DAX held below 13972 again for the session as buyers were reluctant to provide support. I expect that the 13972 level will be key today and any lower high below will lead to a push into or through 13768. If price can edge higher and consolidate around the level, then a squeeze on shorts will be on the cards. The UK100 rallied after the European open to test back up into 7385 and confirmed a double bottom at 7315. I expect that the double bottom will drag in some buyers but I feel that they will only be the fuel for a move down off 7385.
Key Cryptos were happy with the fall into the USD and buoyant share market as prices held onto Asian session gains. Bitcoin spiked into 17100 resistance before moving back down into the US close. Ethereum could not get above 1218 as sellers capped the buying pressure into the level. Watching for ETH to hold a lower high and squeeze back down while BTC to build a lower high.
Spot Gold had a good day thanks to the fall into the USD. I expect that the move up was exacerbated by some safe haven buying which extended the price up through 1813. If buyers can hold price above 1813, then I am looking for a extension up into test 1823. With price being stretched, any break below 1813 could see an unwind of some longs. Crude Oil was choppy as support come from the USD weakness while concerns for a major US winter storm capped the bulls (expecting travel curbs). Looking for the 76.52 level to hold and see a lower high squeeze price action down potentially into 73.55. USD Index initially failed hard off 104.738 after the BOJ release, and then held lower highs through European and US trade. This hints at further weakness but we do have a major level at 103.546 that will provide support.
Join Our TRADERS HUB DISCORD CHANNEL for updates and trade ideas (email firstname.lastname@example.org 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.