TRADESETUP

February 13, 2020

The Morning Jumpstart

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OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 13/02/20 (as at 8:15am AEDT)

  • SPI200 (Mar) overnight futures up 42 pts to 7061
  • SP500 up 22.20 pts to 3379.95
  • NASDAQ up 87.02 pts to 9725.96
  • Dow Jones up 275.08 pts to 29,551.42
  • FTSE100 up 34.93 pts to 7534.37
  • DAX30 up 121.94 pts to 13,749.78
  • GOLD futures (April Contract) down $0.50 to $1569.60 an ounce
  • COPPER futures (Comex Mar) up $0.018 to $2.601 a pound
  • OIL futures US Session (Nymex Mar) up $1.61 to $51.55 a barrel
  • CRB Index up 2.15 pts to 171.76
  • AUDUSD trading at 0.6738
  • EURUSD trading at 1.0875
  • GBPUSD trading at 1.2959
  • USDJPY trading at 110.0800
  • USD Index US Session (ICE March) up 0.276 to 98.870

US Indexes again opened stronger but managed to hold onto the gains into the close as waning coronavirus fears silences the bears. News that the number of new cases is decreasing set buyers into action along with Washington as Treasury Secretary Steven Mnuchin said that the negative economic impact from the virus outbreak is a one-time event which will not last beyond 2020. Fed Reserve Chair Powell reiterated his views on the economy saying that there is no reason why the current situation of low unemployment, rising wages and high hob creation can not continue. He also continued to highlight the threat from expanding federal and household debt levels. The DOW closed up 0.94% while the broader SP500 was up 0.66% and the Nasdaq ended up 0.90% for the session. In Europe, Indexes also rallied on easing virus fears as stronger iron ore and base metal prices helped to support China-linked commodity and auto stocks. A Beijing senior medical adviser forecast the outbreak to end by April. Investors looked past data that showed the EU’s industrial production fell more than expected for December.

US fourth quarter reporting season is over the hump, with 351 companies in the SP500 having posted results. Of those, 70.9% have surprised analyst expectations to the upside, according to data. Earnings are now seen growing at an annual rate of 2.4% compared to 0.3% forecast on Jan 1st.

The USD Index initially pushed lower at the start of the European session which buoyed the major crosses and supported the bulls. Once the US session kicked off the Dollar rallied strong to squeeze out the sellers as price held higher levels and traders flowed into US shares. The EURUSD was holding well and consolidating up until the USD rallied at which stage the Euro fell apart and moved lower. Bulls will be hoping to see if price can find support build around current levels at 1.0870 which is a previous major low. The GBPUSD initially pushed higher at the start of the European session and actually weathered the USD rally well which shows signs that the pair may be heading higher in the near term. The AUDUSD is showing signs of being supported by the change in tone for the coronavirus as buyers stack up to hold higher lows. The USDJPY rallied hard and held the gains even as the USD rallied. The move highlights the risk on tone into shares as the YEN safe haven bid fell apart.

SPOT GOLD held its ground quite well as spikes lower were soaked up by buyers. The recent action has been edging lower although price continues to hold higher lows over the longer term. Watching now to see if buyers can hold a higher low to put the squeeze on short term sellers for a pop higher. Crude Oil did well in a very strong session even as inventory data came out stronger than expected. Price pushed back above the $50 mark and there is a chance that we may see a big short squeeze if price can push back above the $52.20 level. Copper also continues to react nicely off major support levels and expect that the move up will continue as major headwinds for bulls ease.

Cryptocurrencies had another solid session with Ethereum leading the charge higher. Bitcoin is currently trading at $10334.8 up 0.83% while Ethereum is at $265.87 up 10.45% and Ripple is trading at $0.30100 up 6.69%. The longer the prices can consolidate the highs, the more buyers will come in to push price higher.

The ASX200 backed up the previous day with another good session yesterday. The open was strong as buyers stepped in and held the gains into the close. In the end the index ended up 32.9 points to 7088.2 within striking distance of new all time highs. The Financial sector surprised and rallied 1.79% while Consumer Discretionary was the runner up. Materials and Resources stocks lagged along with the Energy sector as Oil continues to struggle. Rising stocks outnumbered declining ones by 606 to 550 and 359 ended unchanged.

The ASX200 is expected to open up another 40 points as the SPI200 again does the heavy lifting in the overnight markets following the US higher.

ECONOMIC DATA OUT TODAY (AEDT)

AUD RBA Gov Lowe Speaks and Inflation Expectations 11am

CAD BOC Gov Poloz Speaks 11am

EUR German Final CPI 6pm

EUR EU Economic Forecasts 9pm

USD CPI Data and Unemployment Claims 12:30am

SPI200 INTRADAY LEVELS TO WATCH

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