NASDAQ futures are priced to gap up after an overnight session featuring an elevated range on normal volume. Price managed to hold the top volume distribution of yesterday’s range before pushing up and finding sellers just below the upper quadrant of the 2/2 range. At 8:30am Philadelphia Fed was a slight beat and Initial/Continuing Jobless claims data was mixed. No directional reaction occurred so far.
Also on the economic calendar today we have Leading Indicators at 10am, oil inventories at 11am, and a 30-Year TIPS auction at 1pm.
Yesterday we printed a double distribution trend day. Price opened gap up and after a brief attempt lower buyers stepped in and aggressively initiated longs. The early afternoon consolidated the gains before a secondary leg came in and extended price higher, effectively recapturing the liquidation day from back on 02/05 and more. Value migrated to session high near end-of-day.
Heading into today my primary expectation is for buyers to squeeze higher off the open. Look for a move to take out overnight high 4227.50. then look for responsive sellers up near 4230 who work to close the overnight gap down to 4196.25.
Hypo 2 sellers push into the overnight inventory and close the gap down to 4196.25. Look for responsive bids down near 4186.50, but sellers continue and take out overnight low 4182.25. Look for responsive buyers down near 4162.75.
Hypo 3 aggressive buyers push up through overnight high 4227.50 and sustain trade above 4230 setting up a second leg up to 4240. Stretch targets are 4247.75 then 4262.
Hypo 4 sellers trigger a liquidation. Push the gap fill down to 4182.25, then sellers make a fast move down to 4162.75. Responsive buyers at this level are overrun setting up a move down through the air pocket to 4139.
Levels:
Volume profile, gaps, and measured moves:
hypo 2 or hypo 4 is playing out
bingo, that 4162 levels was solid support so far, if it gives way….liquidation, but I am leaning toward it being a hypo 2 kinda day
Hi Raul, can you point me to a series of posts of yours and/or additional resources on the internet that explains Auction Theory? A couple videos would be ideal in addition to the posts/websites because I learn much better seeing things play out. Thanks in advance for the help.
@Raul3 same here plz?
DM me on twitter /LinkedIn /FB if you have the time.