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 TUESDAY 17/01/23
US Indexes were closed for Martin Luther King Jr day leaving the other major Indexes to fend for themselves. In Europe, the DAX edged higher in a well contained session as to did the FTSE100 with both markets currently extended up into major levels. The USD flushed the previous sessions lows to hunt stop losses before bouncing back up to consolidate in a quiet session. Gold and Copper saw some minor profit taking on the back on of the USD move but both remain in their respective uptrends for now. If the USD wants to start squeezing out some sellers, then expecting Gold and Copper to take a hit. Markets are extended but I expect they will find support for now with the US earnings underway. Earnings will be interesting and traders will again focus on projections. Any company that fails to beat expectations will potentially be punished while companies that do beat I expect to have limited upside as investors continue to digest high inflation. (All times AEDT) AUD Westpac Consumer Sentiment 10:30am, ALL Day 2 WEF Annual Meetings, CNY GDP and Industrial Production at 1pm, EUR German Final CPI at 6pm, GBP Claimant Count and Average Hourly Earnings at 6pm, EUR German ZEW Economic Sentiment at 9pm, CAD CPI Data at 12:30am and USD Empire State Manufacturing Index at 12:30am.
Asian Markets may be contained on the open with no lead from the US. I expect that we may see a flush of recent buyers then price edge back up. Nikkei could see another move lower on inflation concerns.
The ASX200 is expected to open DOWN 15 points after the SPI200 edged lower in a quiet overnight session.
Prices below as at 9am AEDT
SPI200 (Mar) overnight futures down 19 pts to 7319
NASDAQ Composite closed
Dow Jones closed
FTSE100 up 16.00 pts to 7860.07
DAX40 up 47.52 pts to 15134.04
GOLD (Spot) down $4.86 to $1915.55 an ounce
COPPER futures US session (Comex Mar) down $0.0770 to $4.1390 a pound
OIL futures US Session (Nymex Feb) down $1.01 to $78.85
CRB Index closed
AUDUSD trading at 0.6952
EURUSD trading at 1.0822
GBPUSD trading at 1.2196
USDJPY trading at 128.5100
USD Index US Session (ICE Mar) up 0.169 to 102.115
The SPI200/ASX200 edged its way lower from the start of the overnight session as would have been expected with the US closed. Weakness into commodities may be a sign of some profit taking to come which may weigh on the SPI today. Still, I would expect to see a retest of yesterdays highs prior to any move down of a major lower high so looking for strength on the open. If not, then expecting a flush down to test below 7310 into 7298. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW chopped around the 34273 zone in a contained session with stock markets closed. With the trend still up, I expect that bulls will continue to provide support so looking for a flush lower, to hold above the anchor at 33910, and a higher low to build for the move up through 34273. The US Tech 100 also floundered but did see a retest and hold of 11475. The 11555 level is a big daily level so I would not expect it to break without some resistance from sellers so I expect to see a choppy session at best. Ideally I would like to see a kick higher to trap buyers prior to a move back down off a lower high. The Hang Seng initially kicked higher during the day session before finding sellers to press price back down into the close with the move continuing to edge lower in overnight trading. Price held the days lows around 21615 which I expect will be a good zone for an opening flush prior to a grind higher. The Nikkei remains under pressure with price holding below 25912. The move up is lacking momentum which suggests there may be another leg down in the pipeline or at least a test down into 25675. Looking for an opening flush of 25912 and then a lower high for a short. The DAX was well contained between 15150 and 15084 and does look like it may move lower to clear out some buyers. Watching for 15150 to hold the action down and a lower high for a move below 15084. The UK100 also had a contained session but did hold above 7844. Bulls will not be too willing to give up longs so I expect more chop into the European open. Watching for a flush of 7844 and then a higher low to hold for an extension up.
Key Cryptos gapped up hard on the open yesterday with Bitcoin and Ethereum testing up into resistance zones. With the US closed for the session, BTC and ETH held the gains but I do expect to see some downwards pressure on the back of some profit taking as I expect new buyers will remain on the sidelines for now.
Spot Gold initially kicked higher above 1918 on the back of the USD flush lower but then reversed the move to end slightly down. The 1918 is a relative strong level so I expect new buyers to be very tentative after such a good rally, which may trigger some profit taking…especially of the USD grinds higher. Crude Oil tested into 79.88 before a grind lower in a relatively uneventful session. I will be watching for a flush of 78.48 and then buyers to hold a minor higher low. With price holding below the EMAs, we could see a grind lower ahead of the US session open. USD Index did flush lower prior to bouncing back above 102.075 and remains to be seen whether it as a trap of sellers or a setup for continuation lower. I expect that it was a trap which would suggest we will see a higher low hold.
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US Tech 100 Index
Hang Seng Index
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