All Lined Up and Ready for A Fresh Fade

I got an early start this morning and updated all my charts and levels to the March 2016 contract.  A younger Raul would stumble into roll forward after a hard night of cognac and Newcastle and be flat footed while the market ran amuck–like it tends to do during roll forward.  Not today my friend.  An older and wiser Raul is peculating.

NASDAQ futures are higher heading into Thursday after a globex session that featured normal range.  Volume metrics are n/a as the transactions are being spread between December and March.  Price traded the lower half of our Wednesday range in an overall balanced session.  At 8:30am Initial/Continuing Jobless Claims data came out worst than expected and the initial reaction is buying.

Also on the economic calendar today we have Household Change in Net Worth at 12pm and a Monthly Budget Statement and 2pm.

Yesterday we printed a neutral extreme down.  This day-type carries the third-most amount of directional conviction and suggests an active higher time frame participation from both buyers and sellers, with sellers being more aggressive.  It looked like some year-end positioning into the FOMC rate decision.

Heading into today my primary expectation is for sellers to work into the overnight inventory, take out overnight low 4612.75 and close the gap down to 4609.75.  Look for responsive buyers on a probe below yesterday’s low 4589 and two way trade ensues.

Hypo 2 buyers push early and take out overnight high 4640.25 setting up a short squeeze up to 4672.50 before two way trade ensues.

Hypo 3 tight balanced trade.  Hold a range from 4644.25 to 4600.

Hypo 4 full on liquidation.  Take out 4589 early (yesterday low) and set up a secondary leg to 4580.  Responsive buyers here are overrun by more supply and we trade down to 4553.25 before two way trade ensues.

Here are my levels, fresh and ready for fades:

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