Nasdaq futures ticked higher overnight and peaked out around midnight before settling back to about the midpoint of the session. Interestingly, we made a new swing high overnight and the swing high is rarely set outside of normal market hours.
The economic calendar is quiet today. We have the Alibaba IPO set to price out today and also Leading Indicators at 10am.
Revisiting the weekly chart, you can see the strong responsive buy that occurred throughout the week which resulted in a long tail on the composite index. What we need to wonder is whether buyer expended all their energy in this response, or whether they will be able to make a fresh push higher. See below:
Intermediate term, we are in the precarious position of hanging out on the fringe of intermediate term balance. As we saw Monday and Tuesday, the gravitational force of the mean can cause a rapid revision. As we press the upper boundary, we need to be cautious. Keep in mind however, this balance is old, and the market is likely to begin exploring soon. I have highlighted the intermediate term balance and some key levels within it below:
I have noted the short term levels I will be observing on the following market profile chart:
Primary hypothesis – sellers push from the open, test down to overnight VAL 4106 where we find responsive buyers who target measured move 4115 then overnight high 4118.75 before balancing out
Hypo 2 – open rejection reversal, buyers attempt higher off the open but are met with sharp opposition which starts a drive lower, take out 4106 effortlessly and close the range gap to 4099.75 where we find a responsive buyer before another leg of selling closes the gap to 4097 and tests VAH 4092.25
Hypo 3 – drive higher, take out overnight high 4118.75 and find buy stop order flow which pushes to 4120.50 fast and sets up another leg higher to MM target 4129
I see the drive lower off the open as well – will be looking for buying opportunities