Futures are priced for a slight gap lower in the NASDAQ this morning after a balanced Globex session. Price was contained within yesterday’s range on normal volume overnight. At 8:30am Initial/Continuing Jobless claims data came out mixed. The initial reaction is a small amount of buying.
Today at 2pm The Fed releases Minutes from their September 16-17 FOMC meeting. Also, throughout the day several Fed cast members will be speaking at various engagements.
Yesterday we printed a normal variation down balance day. This was the second consecutive day where sellers managed to press a range extension lower. However, they have accomplished little else. Instead the week has seen price drift slightly higher. Wednesday closed near session high.
If you look at the below volume profile chart, you will see I added a red/green volume profile. When we have several sessions of overlapping action I add one of these to get a better picture of what is going on in the region.
Heading into today, my primary expectation is for buyers to push into the overnight inventory and close the gap up to 4324. This opens the door for a move to target overnight high 4328.75. There is a cluster of short-term resistance just above from 4328.75-4331.25 but it resembles a weak high so I will not be leaning on it. Instead I will look for responsive sellers around the open gap at 4341.25 and two-way trade to ensue as we wait for Fed minutes.
Hypo 2 sellers work lower off the open to take out overnight low 4288. We have a weak looking low on the overnight session which makes this test likely. Look for sellers to attempt a continued probe lower to close the weekend gap still open down to 4261.75 but stall out around 4277.25.
Hypo 3 buyers push up and close the 4341.25 open gap early on, some churn north of 4307 (LVN from the 3-day volume profile added to chart) which sets up a secondary leg higher to target the open gap up to 4366.25.
Hypo 4 is liquidation ensues. Price pushes down and closes the 4261.75 gap early and sellers set their sights on 4243.25. If they get down below this level we could see a fast, liquidation-type move.
Levels:
Late yesterday you mentioned 4304 as being key to hold, can i ask what you saw there? mid point on a renko chart? (or your charts see into the future) Thanks.
4304 – look at they way the LVN two profiles back lined up with the VAH of the profile in front of it on my market profile chart yesterday morning:
http://ibankcoin.com/raul3/files/2015/10/10072015_NQ_VP.jpg