Friday’s Nasdaq auction took on an odd formation which in part was news driven. The profile itself does not provide much short term signal, but it does provide many juicy opportunities if we auction through it early next week.
First off, both price extremes, the high and low, were poorly formed. Thus if we open for trade inside this range Monday and price action begins pushing toward one the extremes, it is likely to break. Second, when news of the Russians withdrawing troops they had postured along the Ukrainian border hit the wires price lurched higher leaving a series of single prints on the tape. This thin area received no auction. If you look to the left you can see we already spent a significant amount of time deliberating these prices, thus we may not need to auction them again. However, if price pushes into this slider range from above or below, we are likely to sweep right through it fast. Finally, all of the action took place inside of Thursday’s range, an inside day.
An inside day is often used to signal indecision because neither the buyers nor the sellers are able to push the price beyond the prior day range. It may suggest the recent index weakness is coming to an end.
Be sure to tune in Monday morning, when we have more updated prices to template against this profile.
