NASDAQ futures are priced to open pro gap down after an extremely abnormal globex session. Volume and range metrics are both running beyond 3rd sigma on trend down price action. Price managed to push near the low of December, set on 12/14 at 4471.25. The price action is being attributed to the Chinese stock markets being halted after trading 7% on their first session of the year.
On the economic calendar today we have ISM Manufacturing at 10am. Also released at 10am is Construction Spending (Nov, MoM). Also keep in mind the 11:30am the USA is auctioning 3&6 month T-bills.
Last week started out with fast selling which quickly dried up. By 11am the NASDAQ began auctioning higher. The strength continued into the close and led up to a pro gap up and drive higher Tuesday. Wednesday was a flat churn with a late-day liquidation.
Thursday was the last trading day of the week. Price opened gap down and two-way trade gave way to selling. We ended the week by printing a neutral extreme down.
Heading into today my primary expectation is for buyers to push into the overnight inventory a bit. Look for a push up to 4521.75. From here expect to sellers to show up and churn to ensue. Churn ultimately gives way to a second leg of buying up to 4535.75 before two way trade ensues.
Hypo 2 sellers push off the open to take out overnight low 4503.25 and give the 4500 century mark a test. Look for responsive buyers down at 4468.25 and two way trade ensues south of 4516.
Hypo 3 full on liquidation, gap and go down. Take out 4500 early and push into 4468.25. Responsive buyers are overrun and trade is sustained below 4466.25 setting up a secondary liquidation leg down to target the composite high volume node at 4450 then the NVPOC at 4432.50. Look for responsive buyers here but stretch target is 4421.25.
Hypo 4 the V-shaped gap fill. This requires major resources from buyers. Take out 4535.75 early and sustain trade above it, setting up a leg higher to target 4578.50. Sustain trade at these levels to set up a late-day push to close the gap up to 4591.50.
Levels:
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hypo 3 so far, full on liquidation morning