We are currently priced for a gap up in the NASDAQ futures after an overnight session that featured normal volume. The range was also normal. It started by holding the Wednesday low then a rally up through the entire range resulted in a test above the high, briefly, before price settled back into it. At 8:30am Initial/Continuing jobless claims data was better than expected. We also had CPI data out better than expected—the initial reaction is selling.
We have a slew of medium impact events to wade through today. The Philadelphia Fed puts out their reading at 10am. We have natural gas storage at 10:30am followed by crude/distillate inventories at 11am. Then at 3:30pm a Monthly Budget Statement will be issued.
Yesterday we printed a neutral extreme down day. It started with a range extension lower which took out the overnight low and probed just below last Friday’s low before catching a bid at making a new high on the day. Said high was only made by 1-tick, a failed auction. We then travelled back through the entire range to close near session low, earning the day an ‘extreme’ addenda to its neutral nature.
Heading into today, my primary expectation is for chop. We have option expiration tomorrow and lots of medium impact economic events. The markets are also digesting several earnings announcements. Look for sellers to work down into the overnight inventory down. They will be targeting 4332 but may stall out beforehand. Then look for two-way trade around the MCVPOC at 4360.
Hypo 2 sellers work down to 4330 and set their sights on a gap fill down to 4326.50. Look for them to take out overnight low 4323.50 and probe Wednesday’s low 4317.50 before finding responsive buyers and two way trade ensues.
Hypo 3 buyers gap and go higher, target overnight high 4366.75 then set their sights on 4384.25. Stretch target is 4392.
Levels:
