NASDAQ futures are coming into the week gap up after an overnight session featuring normal range and volume. Price bounced around inside Friday’s range overnight, extending the balance formed back on 07/14. Bank of American reported earnings this morning and is trading slightly higher.
Also on the economic docket today we have the NAHB Housing Market Index at 10am, 3- & 6-month T-bills being auctioned at 11:30am, Long-term TIC flows at 4pm, and IBM, NFLX, and YHOO reporting after the bell (among others).
Last week the market worked higher. We opened gap up every day and most sessions were simply balanced, drifting trade after their respective gap up. Friday was the first day sellers managed to turn initiative and probe a bit lower, but overall the week was dominated by slow accumulation.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4579.25. Sellers take out overnight low 4577 and find responsive buying ahead of 4570 before two way trade ensues.
Hypo 2 buyers gap and go, work up and take out overnight high 4598.75 and test above last Friday’s high 4603.50. Sellers step in around 4621.25 and two way trade ensues.
Hypo 3 strong sellers work gap fill down to 4579.25, take out overnight low 4577 then sustain trade below 4570 setting up a move to target the open gap down at 4561 before two way trade ensues.
Levels:
Volume profiles, gaps, and measured moves:
