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 MONDAY 16/01/23
US Indexes ended the week with further gains as the DOW and SP500 were up over 2% while the Nasdaq added over 3% continuing a great start to the new year. European markets also kept the bullish momentum up with the DAX and FTSE up 3.05% and 1.95% respectively while Asian markets were mixed with the HSI up slightly, Nikkei down and ASX200 charging up 3.10%. Bulls are in control as the USD presses lower and breaks below daily support levels on expectations and data shows that inflation is easing. Traders also start to look to US earnings as Banks kick off quarterly results and generally beat estimates as they stockpile for a rainy day (ie recession) and were helped by higher interest rates. Data out showed that consumer sentiment improved as inflation expectations shifted to a more subdued outlook which is being reflected in Bonds as yields ease. Gold and Copper are powering higher as bulls take advantage of the USD weakness and many analysts talk up a strong year for commodities. (All times AEDT) AUD MI Inflation Gauge at 11am, ALL Day 1 WEF Annual Meetings, ALL Eurogroup Meetings and GBP BOE Gov Bailey Speaks at 2am.
Asian Markets will open mixed with a positive open expected in ASX200 and the Hang Seng while the Nikkei is expected to open lower.
The ASX200 is expected to open UP 30 points to start the new week on a positive note.
Prices below as at 9am AEDT
SPI200 (Mar) overnight futures up 35 pts to 7310
SP500 up 15.92 pts to 3999.09
NASDAQ Composite up 78.06 pts to 11079.16
Dow Jones up 112.64 pts to 34302.61
FTSE100 up 50.03 pts to 7844.07
DAX40 up 28.22 pts to 15086.52
GOLD (Spot) up $23.50 to $1920.41 an ounce
COPPER futures US session (Comex Mar) up $0.0210 to $4.2175 a pound
OIL futures US Session (Nymex Feb) up $1.47 to $79.86
CRB Index up 2.14 pts to 275.91
AUDUSD trading at 0.6968
EURUSD trading at 1.0830
GBPUSD trading at 1.2227
USDJPY trading at 127.8700
USD Index US Session (ICE Mar) down 0.030 to 101.965
The SPI200/ASX200 rallied into the close to add to the day sessions gains. The SPI200 price action took out the days highs through 7298 which means that there may be a lot of stops to be targeted for a move down. For any short, which will be against the bias up, I will need to see a move back below 7298 and lower high hold otherwise I expect bulls to again take charge and push higher. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW flushed lower ahead of the open to trap shorts before ramping higher to end near previous sessions highs. Momentum is in a prime position to expand higher so I will be looking for a higher low to hold for a move up through 34300. The US Tech 100 also flushed lower into the open and then ramped higher into a major resistance area around 11575 where I would expect to see some choppy price action. Higher lows are holding the bias up so watching for either another clear higher low for a long or price to failed lower off the level on the back of a lower high. The Hang Seng remains choppy but biased up as the underlying index comes into a key zone and is extended on a daily basis. I expect that bulls will look to add to recent gains so will be watching for an early flush lower to clear out some late buyers and trap some sellers for the later squeeze higher into the 22000 zone. The Nikkei took a big hit Friday as the Bank Of Japan (BOJ) said it would step up its bond buying program as inflation hits new highs. The negative day session move continued into the overnight session with the Nikkei pressing down into potential support around 25675. I expect that buyers will be very tentative on the open and may continue to stand aside leaving the Index to press lower for a retest of 25675 or even a break below the level. The DAX generally consolidated between 15122 and 15050 for most of the session before breaking above 15122 late in the US session and into the close. I expect that this was a stop loss run so will be watching for 15122 to hold a retest before any new long. The UK100 broke above 7844 early in the US session and consolidated above the level into the close. Price action looks set to add to the gains today but I will not discount a flush lower to trap sellers ahead of the European open before another leg higher….but either way, the price action remains bullish and holding higher lows.
Key Cryptos powered higher over the weekend and have gapped up strongly today. I expect that price will take some time to build any clear tradable price action and will be leaning to a potential gap fill for both Bitcoin and Ethereum. BTC has opened up into potential resistance at 21000 so may get choppy but I still expect that some short term profit taking will weigh on the action. ETH is just below previous higher and potential resistance so may still find more buying before a selloff. Either way, I expect that new buyers will remain on the sidelines until the intraday outlook becomes a little clearer.
Spot Gold added to previous sessions gains after holding up above 1894 which is the anchor to the move up on the 30min timeframe. Price is extended into 1918 and will need to see further downside into the USD before clearing up through the level. If the USD finds some buyers on the open, then we could see a good squeeze lower into gold as buyers lock in some gains. Crude Oil is holding higher lows and is looking set to test into 81.13 resistance. I would like to see a minor flush lower and another higher low for a long potentially off 79.13. If we see a spike and then rejection, we could easily see a squeeze lower and buyers unwind longs. USD Index is holding above 102.080 and will need to continue to hold this level to fend off another spike lower. If it breaks lower, then to me this would confirm the break of the daily trend higher and could unleash a wave of shorts.
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US Tech 100 Index
Hang Seng Index
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