NASDAQ futures are coming into Thursday gap down after an overnight session featuring normal range and volume. Price worked lower, down through the lows set back on 05/24, a major reference day for the market. Just below the 05/24 lows, around 3am, buyers showed up and two-way trade ensued. At 8:30am Core CPI data came out inline [0.20% vs 0.20% est] and Philadelphia Fed Manufacturing Index beat expectations [4.70 vs 1.10 est].
Also on the economic docket today we have NAHB Housing Market Index at 10am.
Yesterday we printed a neutral extreme down. NASDAQ opened gap up and after a slow opening auction sellers pushed the market range extension down. Just after 2pm, after the FOMC rate decision, the market spiked to a new session high, putting the day into a neutral print. After nearly an hour of grinding debate, sellers broke the market lower and close it near session low, thus morphing the neutral profile into a neutral extreme.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4404.75. Look for sellers to defend this area aggressively and reverse the market. We then work lower to take out overnight low 4374. Look for responsive buyers down at 4367.25 and two-way trade to ensue.
Hypo 2 sellers gap-and-go, push down through overnight low 4374 early on and then sustain trade below 4367.25 setting up a liquidation down to 4350 before two way trade ensues.
Hypo 3 strong buyers close overnight gap up to 44047.75 then take out overnight high 4409. This sets up a move to target 4425.25 before two way trade ensues.
Levels:
Volume profiles, gaps, and measured moves:
real test is 4300. I am betting it breaks before brexit vote.
but that is 65 NASDAQs lower…what will you do until then?