Nasdaq futures are trading a touch higher as we head into US open. The overnight session kicked off atop a 30 point afternoon bounce that buyers managed to put together after facing heavy selling most of the session. Range on the overnight session is normal on a normal amount of volume.
The economic calendar is open today. Overnight the Bank of Japan released the minutes from their April 30th meeting. It yielded little reaction from US equity futures however it has put continued upward pressure on the USD/JPY currency pair. We also had MBA Mortgage Applications at 7am this morning which came in a bit worse than expected and also yielded little reaction.
Yesterday we came into the holiday-shortened week gap down and had an open auction outside range before failing lower. Selling pressure was heavy throughout most of the morning and attributed to news about the Europe/Greek situation.
The nature of the move calls it into question. It was news driven and left behind a string of poorly auctioned prices. If the move is legitimately the start of a correction, then we likely won’t spend much time above the overnight high 4490.50.
Heading into today, my primary expectation is for sellers to push into the overnight inventory to close the gap to 4481.25 and a continuation lower to push into yesterday’s bounce. I will look for signs of buyers at 4470 who work us back up above 4485.
Hypo 2 is buyers push above the overnight high 4490.50 early and we begin “climbing the pole” up to 4525.
Hypo 3 is sellers push but struggle to close overnight gap before buyers step in and we begin the pole climb.
Hypo 4 liquidation continues. Look for buyers around 4460 who ultimately are overrun and we continue exploring lower prices. Stretch target is the open gap at 4424.25.