The 14 Year Gap

Nasdaq futures are trading a touch higher overnight in a balanced session of trade.  ADP Employment change came in better than expected this morning and there was a brief pop in the futures which was quickly faded.  This suggests yesterday’s price action might have been sufficient to bake in some optimistic economic data points.  We have US Factory Orders at 10am, crude oil, distillate, and gasoline inventories at 10:30, and a lecture from Yellen at the IMF in Washington at 11am.

Tomorrow is a holiday shortened trading session and the day is loaded with economic releases including an European Central Bank Rate decision at 7:45 am and NFP stats at 8:30.

As the Nasdaq Composite climbs into 2000 price levels, what jumps to my attention is March 31, 2000.  We closed the 1^st quarter of trade in 2000 with a big red week.  April started with a gap lower and the market never looked back, falling into the abyss for a good two years.  Nature is effective at filling voids or vacuums or gaps, and when the market left one behind for 14 years I know it drove a few speculators nuts to see this gap remain.  Well, here we are 14 years later, pressing back up into this gap.  This is a Nasdaq Composite Index price level, thus I do not have a specific future’s contract price level to reference, but I think it is likely we fill this gap up to 4572.83, see below:

On the intermediate term timeframe we can see the in-control buyers exhibited a high degree of confidence yesterday.  There order flow was crystal clear from the opening bell when they gapped up and drove higher.  It was essentially off to the races for the duration of the morning.  The market finally came into balance late into the session and the balance carried through into the overnight.  We are left with an interesting low volume node which aligns well as an early pivot point for today’s expected consolidation-type trade:

I have noted my short term observations on the following market profile: