NASDAQ futures are priced to start Friday with a small gap up after a globex session that featured normal range and volume. Price managed to exceed Thursday’s high overnight and formed a weak/vulnerable high up at 4357.75.
On the economic calendar today we have Wholesale Inventories and Wholesale Trade Sales at 10am. The Baker Hughes Rig Count is the only other scheduled event and will be released at 1pm.
Yesterday we printed a neutral extreme up day. After a gap down sellers pushed lower for most of the morning. Sellers probed below Wednesday’s low briefly before the auction reversed. At 2pm the FOMC minutes produced a buy on third reaction. Price went up and closed the overnight gap then continued to close the open gap at 4341.25 dating back to 09/21. Price closed near session highs earning the ‘neutral extreme’ moniker.
Heading into today, my primary expectation is for a slow tape. Look for sellers to work into the overnight inventory and close the gap down to 4345. Look for buyers to defend north of 4330 then make a move to target overnight high 4357.75. This sets up the gap fill up to 4366.25. Stretch target is 4370.
Hypo 2 buyers run higher off the gap, close the 4366.25 gap then stall around 4370 and turn lower to close the overnight gap down to 4345 then target overnight low 4324.25. Look for responsive buyers at 4311 and two-way trade to ensue.
Hypo 3 strong buying early, take out 4370, churn, then continue higher to 4378.50. Stretch target is 4392.
Hypo 4 sellers accelerate the tape, we take out 4310 and work down to the 4300 century mark.
Levels:
been working the primary hypo
For the last 4 sessions, NQ futures are churning around the lower channel line. From past observation, that won’t go on for much longer. Maybe it breaks upward. But I am more inclined to think that a BlueStar style sell-off is in the cards.
you need to show me these channels you speak of