NASDAQ futures are heading into Thursday gap down after an overnight session featuring elevated range and volume. Price was pushing higher after the bell yesterday afternoon–perhaps some carryover from the FOMC rally, but also with the help of strong earnings from Facebook–and price briefly reclaimed Tuesday’s range. However just before midnight price spiked lower on disappointing actions from the Bank of Japan, pushing price back down to Wednesday’s midpoint before two-way trade ensued. At 8:30am Initial/Continuing Jobless claims data came out better than expected and first quarter GDP results were below expectation. The initial reaction is muted, sideways.
See Also: Bank of Japan Holds Off on New Stimulus, Nikkei And Futures Donkey-Punched With Vigor
Also on the economic docket today we have a 2-year floating rate auction at 11:30am and a 7-year note auction at 1pm. After the bell Amazon is reporting earnings. Amazon is the last major tech player to report.
Yesterday we printed a neutral extreme up. The session opened gap down after disappointing Apple earnings. An early attempt to buy the gap down was thwarted when sellers stepped in and continued working price lower. Just after 10:30am the market went range extension down and printed a failed auction before coming into balance ahead of the FOMC rate decision. 3rd reaction analysis yielded the buy and we had a strong post-FOMC rally to close out at session high.
Heading into today my primary expectation is for buyers to press into the overnight inventory and attempt a gap fill up to 4425. Responsive sellers step in here and begin working price lower, setting their sights on overnight low 4392.25. Just below overnight low responsive buyers step in and two way trade ensues.
Hypo 2 sellers push off the open and take out overnight low 4392.25 and continue lower to 4382.25 before two way trade ensues.
Hypo 3 buyers close overnight gap up to 4425 then become initiative, working price up through overnight high 4442.25. Patriotism kicks in and buyers continue higher to target 4450. Look for responsive sellers up at 4466.50 before two way trade ensues.
Levels:
Volume profiles, gaps, and measured moves:
“What do you mean, YOU people?”
Whenever I hear day traders say “I expect” my eyes glaze over.