NASDAQ futures are priced for a gap up today after an overnight session featuring extreme range and volume. Price rallied after cash closed and continued higher early this morning before coming into balance around last Friday’s high. Price managed to rally through President Obama’s last State of The Union Address last night and bulls have been defending the progress since.
On the economic calendar today we have crude oil inventory data at 10:30am. This may carry elevated importance to stocks since the commodity broke the $30 handle yesterday. We also have a 1pm auction of 10-Year Treasury notes, and both the Monthly Budget Statement and Fed Beige Book at 2pm.
Yesterday price opened pro gap up and after buyers drove off the open the action was faded–first to recapture the Monday range then the entire gap was filled. Buyers stepped in late in the session and pushed price higher but we ultimately faded back to the mean.
Heading into today my primary expectation is for sellers to work into the overnight inventory, but look for buyers to defend around 4337.50. From there look for a move to take out overnight high 4365. Buyers accelerate from here to target the strange 10/21 gap left behind at 4398.75 before two way trade ensues.
Hypo 2 buyers test above overnight high 4365 and and find responsive sellers setting up a tight two way chop trade between 4350 and 4370.
Hypo 3 sellers work a full gap fill down to 4312.75 then set their sights on overnight low 4306.75. Look for responsive buyers around 4294.75 and two way trade ensues.
Levels:
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