Nasdaq futures spent the overnight session slowly drifting higher and did so on normal range and volume. One structural element currently stands out on the session, a weak high, seen clearly on the market profile as a double TPO print and an overall lopsided bell structure.
Today is the most action packed day of the week from an economic announcement standpoint. At 9:15am Industrial Production data is out followed by The May Preliminary reading of the U of Michigan Confidence number. The preliminary reading has recently been a successful number in generating a reaction from the market. Energy traders will be watching the Baker Hughes Rig Count at 1pm and at the close we have Net Long-Term Tic Flows.
Yesterday price opened pro gap up, above the prior day’s range and had an open auction that we briefly tested below before the market went one time frame up. The result was a trend day print. Market profile theory states any entry in the direction of a trend is a risk free entry into the following session. Therefore, expectation is for price to exceed the trend day high by at least a tick.
Heading into today, my primary expectation is for sellers to push into the overnight inventory. I expect some choppiness before 10am’s data. Look for buyers to defend north of 4493 and then work to take out the weak overnight high at 4507.50 to target 4517.25 before two-way trade ensues.
Hypo 2 we push down into the upper quad of yesterday’s trend day, taking out overnight low 4488 and looking for responsive buyers ahead of 4480 and two way trade ensues.
Hypo 3, gap and go higher, take out 4517.25 early and sustain trade above 4520, setting up a secondary leg up to 4538.75.