NASDAQ futures are priced for a gap up heading into Thursday after a globex session featuring extreme range and volume. Price held the upper half of yesterday’s range and managed to briefly take out the high print from yesterday. At 8:30am the Philadelphia Fed data was slightly better-than-expected and the Initial/Continuing Jobless Claims data was mixed. There was a strong buy on the news.
Also on the economic calendar today we have crude oil inventory data at 11am and a 10-year TIPS auction at 1pm.
Yesterday we printed a neutral extreme up day, the market profile day-type carrying the third highest amount of directional conviction. Price opened pro gap down and at new swing low. After responsive sellers defended an early attempt back into Wednesday’s range they became initiative and pushed price down through the lower weekly ATR band. The first responsive bid attempt was overrun and we pushed a bit lower to close the 08/24/15 gap at 3997.50. If you recall, this is the gap created when China last cut their interest rate. We rallied hard from that point, traversing the entire range and closing the overnight gap to ultimately close the session flat.
Heading into today my primary expectation is for sellers to work into the overnight inventory at close the overnight gap down to 4134. Look for responsive buyers here (responsive relative to the open, initiative relative to yesterday’s close) who work to take out overnight high 4181.50. From here look for a move to target 4195.75 with a stretch target of 4202.75.
Hypo 2 sellers work the overnight gap fill down to 4314 then continue lower to test value area low 4123. Two way trade takes hold, but struggles to trade north of 4150. The market goes range bound between 4150 and 4100.
Hypo 3 buyers hold the overnight gap, sustaining trade above 4144. Take out overnight high 4180 then target 4202.75 early. Sustain trade in this area to set up a move up to 4255.
Hypo 4 liquidation continues. Early gap fill down to 4134. Fast move to take out overnight low 4085.75. Buyers make a responsive attempt at 4069 but are eventually overrun setting up a move to target 4007.
Levels:
