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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 FRIDAY 27/01/23
US Indexes continue to kick higher as bulls brush aside positive economic numbers to focus on earnings. Economic data came out better than expected which points to continued robust inflation making the next FOMC meeting more important. Traders are expecting a ‘soft landing’ for the economy so happy to be risk on looking for bargains especially into tech which led the charge overnight. The ASX is within 2% of all time highs at a time when inflation remains high and the RBA reluctant to raise rates leaving consumers costs to edge higher. It may be simple case that there is a lot of money on the sidelines that needs to be in the market and ‘earning’. US Bond yields spiked as bonds tested into recent lows which builds the case for continued rate rises from the Fed. The USD is finding longer term support which could see a push into new recent medium term highs and pressure commodities…we can see gold found some selling pressure overnight while Copper remains bullish. All in all, it remains a hard market to navigate so focus on risk management must be a priority.
(All times AEDT) JPY Tokyo Core CPI at 10:30am, CNY Bank Holiday, AUD Import Prices and PPI at 11:30am, USD Core PCE Price Index at 12:30am and USD Pending Home Sales and Consumer Sentiment at 2am.
CLICK HERE FOR FULL ECONOMIC DATA OUT TODAY (AEDT) 27/01/23
Asian Markets will open bullish as SPI, Hang Seng and Nikkei continue to pressure into highs. Shorts will need to be off clear lower highs with a scalping mindset while longs will need to see a clear flush lower and higher lows.
The ASX200 is expected to open UP 50 points as bulls continue to charge for all time highs on the ASX.
Prices below as at 9am AEDT
SPI200 (Mar) overnight futures up 31 pts to 7463
SP500 up 44.21 pts to 4060.43
NASDAQ Composite up 199.05 pts to 11512.41
Dow Jones up 205.57 pts to 33949.41
FTSE100 up 16.24 pts to 7761.11
DAX40 up 51.21 pts to 15132.85
GOLD (Spot) down $17.11 to $1929.21 an ounce
COPPER futures US session (Comex Mar) up $0.0385 to $4.2830 a pound
OIL futures US Session (Nymex Mar) up $0.86 to $81.01
CRB Index up 2.07 pts to 279.55
AUDUSD trading at 0.7113
EURUSD trading at 1.0891
GBPUSD trading at 1.2411
USDJPY trading at 130.2000
USD Index US Session (ICE Mar) up 0.179 to 101.595
The SPI200/ASX200 moved up from t he start of the overnight open and ended up at session highs. Price continues to be strong overnight and contained during the day so I am watching for a spike on the open and then a potential short opportunity in an extended market. Ideally I would like to see a squeeze lower on buyers prior to a potential late rally as longer term price action is heading higher. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW trapped buyers on an opening squeeze prior to pushing to intraday highs into the close. Watching for a spike up into 34008 to hunt some stops before a squeeze back into 33809 or the EMAs. If price pulls back into EMAs and holds, then looking for a higher low and long. The US Tech 100 did much the same as the DOW and is extending up into a major resistance zone where I would expect a reaction from sellers. Looking for a spike up and then a lower high short setup or a move back down into EMAs or 11923 for a higher low long setup. The Hang Seng opened stronger then ‘chopped’ and ‘grinded’ higher (my favoured technical terms). Price is holding in a upwards channel into a major level where I will be looking for a spike up on open to trap buyers and then a lower high setup short. The Nikkei clearly wants to be higher as price continues to flush lower in search of liquidity prior to a move up into new short term highs. Looking for an opening flush higher to trap buyers and then a short entry setup. The DAX moved down at the start or the session into 15084 before moving back up. To me the move up is not convincing, just a reaction to the US markets so I expect to see any move into new intraday highs to find sellers. Looking for a move up off 15150 potentially into 15245 prior to the US open. The UK100 broke up out of the recent downtrend as sellers failing to break into new lows. Price held a higher low at 7749 which I expect to lead to a move up so watching for a higher low and squeeze up through 7781.
Key Cryptos Bitcoin and Ethereum had an early spike higher prior to the Asian session open yesterday but failed to follow through. It seems that the spike up was a squeeze of shorts and triggered some profit taking. Still, both BTC and ETH look set to kick higher as both are still finding some buyers on the grind lower. If we see a clear higher low into Bitcoin and Ethereum then looing for a run higher.
Spot Gold found some profit taking from the start of the European session as price fell away from 1950 and spiked into 1920 before recovering slightly. To me, this shows the building uncertainty for the USD to move down so I am on guard for some follow through lower today. Still, watching for a reaction up from buyers and test back into 1939 ahead of the US session. Crude Oil rejected a sharp move up into highs and then also rejected a spike into lows….leaving traders a little confused. There is a case for easing demand on a global slowdown wo watching for a lower high. USD Index is holding major support and looks to be finding some buyers or shorts are starting to cover. Data overnight, and the reaction from the bond market, shows inflation and rate rises are still a problem meaning that any Fed ‘pivot’ is not on the cards yet. So looking for more pressure higher into the USD.
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SPI200 Index
ASX200 Index
DOW Index
US Tech 100 Index
Hang Seng Index
Nikkei Index
DAX Index
UK100 Index
Spot Gold
Crude Oil
USD Index
Bitcoin
Ethereum
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