NASDAQ futures are set to begin Wednesday trade gap up after an overnight session featuring normal range and volume. Price spent most of the session working higher and managed to hold the Tuesday range. At 7am MBA Mortgage Applications came out significantly better than the previous month.
Also on the economic docket today we have Wholesale Inventories at 10am, crude oil inventories at 10:30am, and a 10-Year Note auction at 1pm.
Yesterday we printed a neutral day, the second consecutive neutral day. The market opened gap down and spent the morning filling the gap, much like Monday. In the early afternoon, the market attempted to continue going higher but formed a failed auction as it attempted to re-enter the mutli-day balance formed from March 1st-7th. We then traversed the entire range to push the session neutral before the settlement period saw enough buying the fend off the ‘neutral extreme‘ nomenclature.
Heading into today my primary expectation is for sellers to push into the overnight inventory and close the gap down to 4272. Look for responsive buyers ahead of overnight low, however. Buyers step in around 4265 and make a move to take out overnight high 4299. Range stays tight as responsive sellers defend the 4300 century mark and two way trade ensues.
Hypo 2 sellers push the gap fill down to 4272 then set their sights on overnight low 4263. From here selling continues to target 4251 before two way trade ensues. Should the selling accelerate, the stretch target is 4234.25.
Hypo 3 buyers gap and go, take out overnight high 4299 early on and sustain trade above 4300 setting up another attempt back into the March 1st-7th inventory, an attempt back above 4310. The achieve it setting up a move up through to 4315. Sellers likely respond here, at least on the first attempt. Stretch target is micro-composite value area high 4330 then 4337.75.
Levels, note the healthy balance distributions currently in place:
Volume profiles, gaps, and measured moves:
Always great stuff man. Thanks.