NASDAQ futures are set to come into Wednesday gap up after an overnight session featuring normal range and volume. Price worked lower last night and found a firm bid on the low-end of our current value. The market then worked back up and settled into yesterday’s midpoint. At 7am MBA Mortgage Applications data came in stronger than expectations.
Also on the economic calendar today we have crude oil inventories at 10:30am and a 10-Year Note reopening auction at 1pm.
Yesterday we printed a normal variation down. Bulls struggled to push range extension up after a quiet open and a hard sell rotation came in. Through lunch the market steadily climbed higher, printing a weak high at 4532 before traversing the entire daily range again and closing near the session low.
Heading into today my primary expectation is for buyers to squeeze higher off the open. Look for a move up to target 4531 before finding responsive sellers and settling into two way trade.
Hypo 2 sellers work into the overnight inventory and close the gap down to 4514.75. From here they continue lower to take out overnight low 4505. Look for responsive buyers down at 4504 and two way trade to ensue.
Hypo 3 strong buyers push up through 4531 and test above the weak high 4532 setting up a move to target 4537. Stretch targets are 4544, 4546.50, and 4555.25.
Hypo 4 sellers sustain trade below 4504 triggering a liquidation down to 4470.75.
Levels:
Volume profiles, gaps, and measured moves:
Currencies driving