Nasdaq futures are priced to start the week down a touch. The overnight session featured normal volume and range and printed a balanced market profile. Looking it a bit more closely at the auction shows a few interesting events. Price pushed higher initially, right up to where the surprise Thursday afternoon sellers showed up. Responsive selling was found again in the 4545 range. Price action is interesting to with the entire overnight session resembling a head and shoulders pattern.
The week kicks off with two low-impact economic events. At 10am the NAHB Housing Market Index data is due out, and at 4pm the Net Long-term TIC flows. Investors will soon shift their attention to Wednesday afternoon when the FOMC will release the minutes from their July 28th meeting.
Last week index traders were taken for a wild ride. Price started the week with a big gap up and buying pressure most of Monday. Toward the afternoon the market showed signs of rolling over and Tuesday and Wednesday morning featured hard selling. By lunch Wednesday sellers dried up and in their wake came buyers who pushed us back through the range and closed a major gap. Thursday and Friday were grinder sessions.
Heading into today, my primary expectation is for sellers to work back into the tape. Look for sellers to take out overnight low and target 4468.25. Look for buyers in this area and two-way trade to ensue.
Hypo 2 buyers push into the overnight inventory to close the gap up to 4532.25. Look for buyers to continue working higher and take out overnight high 4546.25 to target 4572. Stretch target on the upside is the open gap at 4585.75.
Hypo 3 buyers sustain above 4500 and two way trade ensues south of 4540.
Levels:
