NASDAQ futures are coming into the week gap up after an extreme overnight session. Both range and sigma pushed beyond 3rd sigma as price pushed down to a new swing low before reversing. The market then managed to trade up to the scene of our late-Friday afternoon breakdown (which also aligns with last Thursday’s low). The market profile footprint left behind looks overall balanced.
On the economic calendar today we have Labor Market Conditions Change data at 10am followed by a 3- and 6-month Treasury Bill auction at 11:30am.
Last week we started Monday with a big pro gap down. By end of day Monday we found a strong responsive buyer. He was faded for most of Tuesday during a balanced session. Wednesday opened pro gap down again but was balanced with strong responsive buyers. Thursday opened pro gap down and after a strong responsive buy, the session rolled over and closed on the lows.
Friday opened gap up and slowly trended lower to close on the lows.
Heading into today my primary expectation is for sellers to push into the overnight inventory and close the gap down to 4262.75. Last Friday pushed into the October 2nd conviction (trend) day. I expect buyers to defend this area. However, I am looking for a move to take out overnight low 4226.25. Look for responsive buyers ahead of 4188 and two way trade to ensue with strong responsive buyers stepping in.
Hypo 2 buyers use the gap up to force a short squeeze rally. Look for a move to take out overnight high 4294 and target the 4300 century mark. Then look for responsive sellers at 4308.50 before two way trade ensues.
Hypo 3 strong buy, take overnight high 4294 early and sustains trade above 4308.50 setting up a leg to target 4332.75. Stretch target is 4348.
Levels:
