NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range and volume. The session was balanced overall, with price holding Monday’s range and eventually working up through the midpoint of the weeks first day. At 8:30am Housing Starts came in well below expectations.
Also on the economic calendar today we have a 4-week T-bill auction at 11:30am.
Yesterday we printed a double distribution trend down. It was somewhat odd, however, because it started with a gap up and drive higher to new swing high. Thus before we could begin trending lower we had to probe above the highs. This is balance play.
Heading into today my primary expectation is for bulls to hold the 4800 level before working up through the overnight high 4815.50. Look for choppy trade just above 4816 that eventually balances back into value around 4800.
Hypo 2 sellers work the gap fill down to 4794.75 setting up a move to take out overnight low 4790. Buyers are just below here and two way trade ensues.
Hypo 3 liquidation trigger. After taking out overnight low 4790 price accelerates into the slip zone (see below). Price works down to 4751.75 before two way trade ensues.
Levels:
Volume profiles, gaps, and measured moves:
