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 8/02/23
US Indexes ramped higher after Powells speech in a choppy session. Investors once again are looking for a Fed pivot as they digest Powells comments about how long the central bank may need to tame inflation. Traders did not need much to trigger the march higher which was exaggerated by intraday traders and algos. It feels that the comments were engineered to offset Fridays strong jobs data and support bulls (ie a soft landing). Still, inflation remains high and does not seem to be coming down as quick as many expect which will cap longer term gains until it cools significantly and we can see a clear end to rate rises. The USD did flush lower along with US bond yields but did make back the losses not long after. European markets followed on from weakness in the Asian session and sold from open only to turn around and push straight back up. The ASX200 dumped on the RBA rate rise and comments on stronger than expected inflation….but the SPI200 was able to make back the losses in a thinly traded overnight session. Oil rallied up in a move to squeeze out some shorts while Gold looks unconvinced of the move down into the USD. All in all, it remains a hard market to navigate so risk management must be a priority.
(All times AEDT) JPY Bank Lending and Current Account at 10:50am, USD President Biden Speaks TENTATIVE, USD FOMC Member Williams Speaks at 1:15am, USD Crude Oil Inventories at 2:30am and USD FOMC Member Waller Speaks at 5:45am.
Asian Markets were ramped higher with the US into the close making for a potentially bullish open from Retails traders. The Hang Seng has some catching up to do on the open so wait for the dust to settle.
The ASX200 is expected to open UP 30 points as the SPI200 brushed aside the rate rise fears to ramp higher into the US close.
Prices below as at 9am AEDT
SPI200 (Mar) overnight futures up 34 pts to 7465
SP500 up 52.92 pts to 4164.00
NASDAQ Composite up 226.34 pts to 12113.79
Dow Jones up 265.67 pts to 34156.69
FTSE100 up 28.00 pts to 7864.71
DAX40 down 25.03 pts to 15320.88
GOLD (Spot) up $4.19 to $1871.88 an ounce
COPPER futures US session (Comex Mar) up $0.0335 to $4.0685 a pound
OIL futures US Session (Nymex Mar) up $3.03 to $77.14
CRB Index up 4.58 pts to 270.79
AUDUSD trading at 0.6954
EURUSD trading at 1.0725
GBPUSD trading at 1.2041
USDJPY trading at 131.0900
USD Index US Session (ICE Mar) down 0.283 to 103.215
The ASX200 saw a choppy night late in the US session along with other major indexes. Price held a major support zone at 7464 and rallied into the close. The move up has not had a pullback so lucky longs off lows may want to lock in gains off the open. If price holds below 7554, I am looking for a lower high and short setup. If price flushes lower on open and potentially holds 7507, then looking for a squeeze up into 7554. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW held the 33655 level and squeezed straight up to 34140 into the close. I expect to see price action look to squeeze out some buyers especially if it wants to rally in the US session later. If price holds below 34140, then looking for a lower high and short setup. The US Tech 100 also flushed higher to join in the party on Powells comments. Price will need to squeeze out some buyers prior to another leg lower. The minor resistance at 12725 held into the close so if price can hold below in the Asian session, I am looking for a lower high and squeeze down into 12550. The Hang Seng missed all the fun and games late in the US session so expecting to see price play catchup. Ideally, I would like to see an opening flush down into 21090 and then a higher low off the support zone. As long as price holds above 21090, any higher low will confirm the double bottom and I expect bring in the bulls. The Nikkei managed to trap traders on a flush below 27438 before the bounce and rally into 27655. If price holds around or below 27655, then looking for a squeeze lower. I expect that retail will support the open though and see a spike higher so watching for a higher low off 27655 for a potential long. The DAX was hit on the European open before charging higher through 15405. If price can hold above the 15405 level, then watching for a higher low and push up into 15476. Ideally, I would like to see a move back below 15405 and a short setup for a bigger move back into the lows. The UK100 was bullish from the open unlike the DAX which suggest bulls are looking for a push up into new all time highs. To me thins will mean a stop hunt and breakout traders get trapped so will be looking for a lower high sell setup as long as price holds above 7888 in Asian trade. I feel that adding any longs into new highs without a clear flush lower is very low probability trading.
Key Cryptos Bitcoin and Ethereum worked higher off Asian session lows to react to the share markets bullishness. BTC and ETH now seem more like a proxy for share markets risk on/off than a separate asset. Ideally I would like to see a flush lower on Ethereum into 1630 for a higher low and entry long while looking for Bitcoin to hold above 23150 for a buy setup.
USD Index managed to squeeze out some nervous longs on the Powell comments and move back below 103.580. If price can hold above 102.935, then a higher low may lead to another push higher. Spot Gold does not convinced of a move down into the USD as price holds below 1880 and tests into 1863. If price action continues to hold below 1880, then looking for a lower high and move to at least hunt stops below 1863…which will depend on the USD holding 102.935. Crude Oil moved up off 74.40 and is extending into 78.00 potential resistance. Looking to see how sellers react around 78.00 prior to any potential buy or sell setup.
Join Our TRADERS HUB DISCORD CHANNEL for updates and trade ideas (email firstname.lastname@example.org for the link)
ASX200 Index 5 Min Chart
US Tech 100 Index
Hang Seng Index
Disclaimer: the contents of this post are presented for informational purposes only. They should not be viewed as investment advice, nor a solicitation to buy or sell any financial securities. Investments in financial products are subject to market risk. Some financial products, such as currency exchange, futures, contracts for difference, options and warrants are highly speculative and any investment should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. Trading currency exchange, futures, contracts for difference, stocks, shares, options and warrants on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in currency exchange, futures, contracts for difference, options, stocks, shares and warrants you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with currency exchange, futures, contracts for difference, options, stocks, shares and warrants trading, and seek advice from an independent financial advisor if you have any doubts.