NASDAQ futures printed an extreme, 3rd sigma range overnight on volume that is difficult to interpret since it is spread between the December and March contract. Price was balancing along the midpoint of Thursday trade before news came out the Chinese had devalued their currency. This news sent prices lower, down to new lows on the week. At 8:30am Advance Retail Sales data came out lower than expected, but ex auto and gas slightly better than expected. The initial reaction is buying.
Also on the economic docket today we have Business Inventories and U of Michigan Confidence at 10am.
Yesterday we printed a normal variation up day. Sellers worked the gap fill before buyers stepped in and worked price higher. Late in the afternoon responsive sellers managed to knock price down through the mid.
Heading into today my primary expectation is for buyers to work into the overnight inventory up to about 4615.25. From here look for sellers to step in and work to take out the overnight low 4585 and 4580 before two way trade ensues.
Hypo 2 sellers push off the open, take out overnight low 4580 early and set up a gap fill down to 4564.75 (11/17 open gap). Look for responsive buyers here and two way trade to ensue.
Hypo 3 the agressive thrust bid reemerges, negating the downward action with one hard rotation up through 4620 and targets an overnight gap fill up to 4637.75 before two way trade ensues.
Hypo 4 full on liquidation. Push through the 11/17 gap at 4564.75 to target 4550. Some responsive buyers here who are ultimately overrun as we continue to explore lower prices.
Levels:
Hypo 2 looks like it is working
otherwise sellers defend OSL 4575.25 and we work down to 4553.75
just worked hypo 2 back to OSL 4575.25, MID test next 4578.50 then open print 4582.75.
I f’ing hate roll over. Although, it didn’t matter much anyway. Did very little.