Longs Liquidated in Extreme Globex Action

NASDAQ futures spent most of the overnight session trending lower after a series of events rocked the world.  There are rumors of at least 50 dead in a bombing in Libya, Police in Paris shot a man potentially wearing a fake bomb vest (poor fashion choice), and the Chinese stock market was halted for a second time this week after triggering a circuit breaker around -7%.  Both range and volume are extreme, volume is about as high as it gets.  Price pushed into the 4300 century mark which is a zone that was also resistance for several weeks back in late September, early October.  At 8:30am Initial/Continuing jobless claims came in worst that expected.

The economic calendar is otherwise open today.  Energy traders will be watching the 10:30am EIA Natural Gas storage reports.  Also remember we have Non-farm payroll tomorrow morning.

Yesterday we printed a normal variation up day.  Price started out pro gap down and buyers mounted an open drive higher.  After going range extension up by lunch, price faded back down near the session midpoint ahead of the FOMC minutes.  3rd reaction off the minutes was a buy, and after a small attempt higher price again rolled over but held the lows.  Late in the session we rallied back up into the upper quadrant of the day’s range.

Heading into today my primary expectation is for buyers to push into the overnight inventory and work price higher to target 4379.  From here look for supply to come in and two way trade to ensue.

Hypo 2 sellers drive off the open, working to target overnight low 4297.25.  From there look for a push down to target 4274.25 before two way trade ensues.  Stretch target to the downside is the open gap down at 4261.75.

Hypo 3 strong responsive buy surge takes price up through 4380 and sustains trade above it setting up a move to target 4400.  Look for sellers to reject price away from yesterday low 4400.75 and two way trade ensues.  Stretch target is a full gap fill up to 4447.

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