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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 3/02/23
US Indexes were mixed with the DOW spending most of the session in negative territory while the Nasdaq rallied hard. Bulls were supported by the BOE and ECB rate rises and expectations that inflation is coming under control globally…even though central bankers are trying to push back on that idea so markets do not get ahead of themselves. DAX had a big night while the FTSE lagged. We may be seeing some safe haven buying back into the USD (also safe haven buying into the YEN) which triggered a sharp move lower into Gold although US bonds ended roughly flat awaiting key Employment Data Friday in the US. Big tech was the main support into the close thanks to some serious bullishness into Meta but Nasdaq saw some profit taking into the close which could flow over into Asian markets. Again markets are extended making new buyers think twice about adding to risk which leaves a lot of long fuel that could be squeezed out of the market is Employment data disappoints. All in all, it remains a hard market to navigate so risk management must be a priority.
(All times AEDT) CNY Caixin Services PMI at 12:45pm, USD Non-Farm Employment Change and Unemployment Rate at 12:30am and USD ISM Services PMI at 2am
CLICK HERE FOR FULL ECONOMIC DATA OUT TODAY (AEDT) 3/02/23
Asian Markets may see a mixed open after Hang Seng found weakness overnight while Nikkei and ASX200 edged higher. I expect to be looking for shorts off lower highs on expectations we see profit taking ahead of US employment.
The ASX200 is expected to open UP 25/30 points but could see a move lower after US Tech earnings after the bell disappointed.
Prices below as at 9am AEDT
SPI200 (Mar) overnight futures up 25 pts to 7472
SP500 up 60.55 pts to 4179.76
NASDAQ Composite up 384.50 pts to 12200.82
Dow Jones down 39.02 pts to 34053.94
FTSE100 up 59.05 pts to 7820.16
DAX40 up 328.45 pts to 15509.19
GOLD (Spot) down $37.45 to $1912.69 an ounce
COPPER futures US session (Comex Mar) down $0.0245 to $4.0865 a pound
OIL futures US Session (Nymex Mar) down $0.53 to $75.88
CRB Index down 0.17 pts to 271.63
AUDUSD trading at 0.7075
EURUSD trading at 1.0908
GBPUSD trading at 1.2229
USDJPY trading at 128.6600
USD Index US Session (ICE Mar) up 0.547 to 101.575
The SPI200/ASX200 held within the days session range as price tested both the highs and lows. I expect a pump higher into 7485 on open for a short setup off a lower high. The earnings from tech after the close could bring in some early negativity and the strength into the USD could hamper buying into local commodity stocks so not seeing a lot of love today for the ASX. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW was choppy through the session as price held between 34135 and 33800. I expect that traders will be awaiting Employment prior to either adding to risk for a move up or unwinding some longs. I am looking for a test into highs around 34135 early for a lower high short setup. The US Tech 100 spiked into 12865 where we saw some profit taking from recent buyers. I expect that the disappointing earnings may see further risk off in the Asian session and into European trade. Looking for a lower high to hold below 12865 for the short opportunity…not interested in longs without a good flush lower. The Hang Seng drifted lower in overnight trade to add to the days session weakness. Price has moved into support around 21790 which I will be looking to be tested and hold early in the session. If this support level gives way then We could see a good move lower so will be looking for continuation trades (lower highs) short. The Nikkei flushed 27589 and then closed below the highs. I expect to see some weakness today and a grind lower as I do not expect buyers to be enthusiastic today. Looking for a flush higher into 27540 to trap some longs before a move down. If price opens weak, then looking for a lower high and push down into 27310. The DAX rallied hard into 15530 as traders brushed aside ECB comments and rate rise expectations. I feel that we will see some profit taking into the European open so looking for a lower high and short of resistance around 15530 or below. The UK100 was more contained after BOE raised rates and pointed to easing inflation. Price rejected a spike into 7830 so I expect to see more pressure lower today for a squeeze on longs. Looking for a lower high above 7796 (refer to chart).
Key Cryptos Bitcoin and Ethereum saw an unwind of some recent buyers late in the US session and just after the close. I expect that we may see a further unwind so watching for BTC to react lower off 23740 and then ETH for a lower high above 1630. I want to see some minor buying and then for another lower high hold.
Spot Gold had a bog move down as bulls rushed to close longas as the USD reclaimed back above daily support. If the dollar sees more buyers provide support, then expect gold to move lower. Looking for a retest up into 1920 and then a lower high to hold for a short setup. Crude Oil held below 77.05 as traders see a global slowdown and demand easing. I expect to see some chop below 77.05 but will be watching for an extension lower into 74.45. If not, there is a good case for a squeeze higher. USD Index moved back above 101.534 as it seems that there may be some safe haven buying (also into the YEN) with US indexes being extended. I am watching to see if overnight lows hold for another leg higher but this will depend on the US employment release.
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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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