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 25/01/23
US Indexes were mixed with the DOW higher while the Nasdaq and Broader market SP500 edged lower. Tech earnings are the focus now which I expect to provide short term support for the Nasdaq and in turn the broader market. Earnings are showing that the US economy is struggling with the continued high inflation as many companies warn of a tough year ahead and data showed business activity contracted for a seventh straight month. US bond yields managed to react lower leaving bond prices to move up off support as traders digested weaker than expected data. For now I expect that major indexes will be supported thanks to earnings although the weakness in the economy may cap any major stock market rally. Oil traders are concerned with the economic slowdown while weakness into the USD is providing support to commodities. If we see another share market selloff, then expect the USD to rally and traders to go risk off again. (All times AEDT) CNY Bank Holiday, AUD CPI Data at 11:30am, EUR German ifo Business Climate at 8pm, CAD BOC Overnight Rate and Rate Statement at 2am and USD Crude Oil Inventories at 2:30am.
Asian Markets may again be mixed as SPI opens near yesterdays highs while the Nikkei could unwind more buyers on a move down. Hang Seng is closed again. Hard to see a big selloff while US Tech earnings still to come but also hard to see a rally. AUS CPI OUT AT 11:30AM!!
The ASX200 is expected to open DOWN 10 points but it could have been worse if the SPI200 did not bounce off support.
Prices below as at 9am AEDT
SPI200 (Mar) overnight futures down 10 pts to 7425
SP500 down 2.86 pts to 4016.95
NASDAQ Composite down 30.14 pts to 11334.27
Dow Jones up 104.40 pts to 33733.96
FTSE100 down 27.31 pts to 7757.36
DAX40 down 9.84 pts to 15093.11
GOLD (Spot) up $6.38 to $1937.35 an ounce
COPPER futures US session (Comex Mar) up $0.0042 to $4.2607 a pound
OIL futures US Session (Nymex Mar) down $1.40 to $80.22
CRB Index down 2.28 pts to 277.97
AUDUSD trading at 0.7041
EURUSD trading at 1.0887
GBPUSD trading at 1.2332
USDJPY trading at 130.1800
USD Index US Session (ICE Mar) down 0.244 to 101.672
The SPI200/ASX200 initially moved lower through European trade to test the day sessions lows before ramping back up into the US close. Bulls remain in charge but I do expect to see sellers edge in from the open. Watching for a flush of 7428 to trigger stop losses and then will be watching for a move below 7418 before another late session rally. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW again flushed lower on the open to trap sellers before a ramp up into test 33809 resistance. The bias is up although I feel that sellers will look to defend 33809 so watching the level for a lower high and short setup. If we do not see any selling pressure then looking for buyers to again flush and rally. The US Tech 100 was generally well contained until Microsoft earnings came out slightly better then expected (which is worse that previous) and spiked Nasdaq higher. Still expecting support at 11795 to send price higher into the 12060 level as focus remains on big tech earnings. The Hang Seng is closed again today. The Nikkei sold off after the days session close but held support at 27110. I expect that buyers will flush price above 27258 on the open and then potentially squeeze lower for a short opportunity. I expect that the market is now in contraction mode off the highs so expecting choppy price action. The DAX sold off from the European open into 15027 before bouncing back up into highs. Price also spiked after MFTS earnings and rejected 15150. I expect that buyers will again be active on the open so watching for a move up off 15084 or a failed low. The UK100 broke the minor uptrend as expected and the price action is looking weak to me. I feel the key level tonight will be 7781 and I will be looking for it to hold as a key lower high for a second leg down.
Key Cryptos Bitcoin and Ethereum were generally range bound with ETH looking to come under pressure of daily resistance. I expect that a selloff into ETH may be a flush to get some buying liquidity back on the sidelines but still will be watching for a lower high. BTC is ranging between 23140 and 22550 and could also see a flush lower. I do not expect a selloff unless the US share market falls over in a risk off environment.
Spot Gold moved up through 1935 before spiking down into 1920 and then recovering…just to give traders a few headaches. The choppy action was thanks to the USD which I expect to continue to be choppy but generally hold support. Watching for a lower high and move back down below 1935. Crude Oil had a good move down before finding support at 79.88. Prices fell on expectations for a global economic slowdown and build in US stockpiles. I expect to see buyers push higher to squeeze out some shorts ahead of the US open so watching for a minor higher low. USD Index came under pressure as data showed business activity contracted again while the ECB are expected to raise rates which led to a rally in the Euro and therefore some selling into the USD. I expect to see pressure down early but do expect to see the USD hold support at 101.622.
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US Tech 100 Index
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