Nasaq futures are priced to gap up heading into Wednesday. The overnight session featured elevated range and volume but neither was extreme. Price was contained inside yesterday’s range in an overall balanced session. At 7am MBA Mortgage Applications came in much better than expected and at 8:15am the ADP employment change data was lower than expected.
Also on the economic agenda today are Factory Orders at 10am and the Fed Beige Book at 2pm.
Yesterday we opened to a big gap down with price well below the weekly ATR band (which is a wide one this week, due to recent volatility). Buyers worked into the market during the morning but stalled as they retested this bracket from below. Then, for the 6th consecutive day, price managed to push neutral. There was a decent rotation off the low after cash close, during the settlement period.
The Nasdaq was the only index that managed to go range extension up yesterday, with the other three indices (SPX, DJIA, and RUT) printing the more basic normal variation down.
Heading into today we have a decent looking structure. My primary expectation is for choppy trade through the morning with price contained from around 4215.25 – 4164.50. Then look for clearer direction after the 2pm beige book.
Hypo 2 is buyers run a gap and go up. They have the edge slightly because yesterday’s neutral extreme gave short conviction and now we are gap up. Look for buyers to push up through 4215.25 and test above yesterday’s high 4228.25. If they aren’t knocked back, look for continuation higher to close the Monday gap up to 4262.50. Look for responsive sellers up near 4282.
Hypo 3 sellers work into the overnight inventory to close the gap down to 4159.25 then continue lower to test yesterday’s low 4118.25. If they can do this, look for a move down to 4080.
Levels:
thanks for the lesson, brofessor.
yw!
no clear direction, we’re where we opened
curious the market behave the option you couldn’t scan
going up but no volumes