Nasdaq futures are up a touch overnight as overnight volatility continues to abate. Volume and range are low-end normal on a balanced session of 2-way trade. The action was contained within yesterday’s range.
The economic calendar is empty again this morning. The market will be tasked with digesting weak trade in IBM after their earnings fell short of investor expectations. More importantly we have Apple reporting earnings after the bell.
Yesterday sellers managed to close the overnight gap early on before initiative buyers stepped back in and continued pushing higher. The action was unidirectional for long stretches of time, but still manages to resemble a normal variation on the market profile. Selling was seen late in the session but was contained above the sessions IB.
Looking out a bit further, we can clearly see a ledge of volume formed at 4650. Keep this level in mind going forward. It can tell us two things—if sellers are unable to push us over the abnormal outcropping then bulls are incredibly strong. Otherwise, and more likely, we tip over the ledge which is likely to trigger some liquidation due to the air pocket structure below it.
Heading into today, my primary expectation is for the market to enter ‘wait-and-see’ mode. Look for two way trade with some profit taking. Look for the overnight low to be taken out 4667.50 setting up a test of 4660. Responsive buyers in this area but they’re contained south of swing high 4686.
Hypo 2 sellers push down through 4660 setting up a move toward the ledge at 4650. If they can push over it, then look for liquidation down to the LVN at 4640.
Hypo 3 buyers push up through overnight high 4683 to continue higher. Look for a move to the ATR target high 4708.50.
Levels:
