NASDAQ futures are coming into Tuesday down eight after an overnight session featuring elevated (but not extreme) range and volume. The globex session started out balanced before giving way to selling around 3:30am. Price worked down to test the value area high from yesterday where we found responsive buyers. Since then a strong rotation up materialized and we are trading in the middle of the overnight range.
The economic calendar is light today, with only some T-bill auctions (52-week & 4-week) occurring at 11:30am. I am noting these auctions because their health is important to the Fed liftoff story. Keep them in mind but also be aware that out on the horizon, tomorrow afternoon, we have the December FOMC minutes.
Yesterday we opened pro gap down and drove lower. Price managed to push below the composite VPOC at 4450. Responsive buyers showed up at the naked VPOC from back on 10/21 at 4432.75 (see yesterday hypo 3). Buyers managed to press up to new highs by close, resulting in a neutral extreme up print.
Heading into today my primary expectation is for buyers to press into the overnight inventory and close the gap up to 4504.50. From there look for buyers to continue on to take out overnight high 4523 which sets up a move to target 4536 before two way trade ensues.
Hypo 2 sellers push down to 4478, buyers defend this developing VAL setting up a move to fill overnight gap 4504.50 then target ONH 4523. Just above ONH responsive sellers step in and two way trade ensues.
Hypo 3 strong sellers reemerge, work down through 4475 setting up a move to take out overnight low 4466. Look for responsive buyers around 4447 and two way trade to ensue.
Hypo 4 full on liquidation. Take out overnight low 4466 early and press into 4447. Churn at the 4447 level gives way to more selling to test below Monday low 4429.75. Stretch target is the open gap down at 4398.75.
Levels:
for the novice like myself… why the preference for NQ instead of ES?
I find the /NQ auctions to be cleaner. It is a thinner product and makes bigger rotations which allow me to work my scales a bit more quickly. Also, I just picked it and stuck with it, developed lots of studies based on it, and over the years became tuned in with its order flow.
I may return to the /ES or even /CL one day, but for now I just focus on trading NQ.