Inventory was pressed long overnight, with prices in both the S&P and NASDAQ futures continuing higher. The bullish action started early this morning at about the time European markets opened. The move was dynamic enough to press us into short term overbought conditions.
My early expectation is to see sellers entering the marketplace who are gunning for an overnight gap fill. Focusing our attention to the NASDAQ via the /NQ_F contract, I will be watching for selling down to 3574 which is the VPOC and closing print from yesterday. Sellers will have to contend with a naked VPOC at 3583.50 which dates back to 12/31/13 on their way to filling the gap.
Should they succeed in filling the gap, they will focus on secondary targets down to 3566.50 then 3562.50.
This does not mean I am recommending shorting. It is instead my expectation for early trade. If we see a strong gap-and-go drive by the buyers it will be clear the long term timeframe is still asserting itself and we should look for dips to add exposure into.
Given the wide ranges of the past two days however, I am looking for a more balanced, two-way tape.
Upside targets are 3587.50, 3592.25, & 3595.75.
I have highlighted these levels on the following volume profile chart:
ignore it all and BTATH