Market Behavior Normalizing at All Time Highs

NASDAQ futures are coming into Wednesday flat after an overnight session featuring normal range and volume.  Price was balanced and held the upper quadrant of Tuesday’s range before taking out the Tuesday high.  At 8:30am Durable Goods orders came in better than expected.

Also on the economic calendar today we have Fed Chair Janet Yellen testifying to a House Panel at 10am, crude oil inventory at 10:30am, a 2-Year floating rate note auction at 11:30am, and a 7-Year Note auction at 1pm.

Yesterday we printed a double distribution trend up.  The market opened flat, briefly probed lower, 2-ticked the Monday low, before driving higher and closing the gap left behind Monday morning.  Price consolidated and accepted last Friday’s range before buyers became initiative near the end of the session, shifting value to the day’s high.

Heading into today my primary expectation is for chop as we wait to hear from Yellen.  Look for a move to take out overnight high 4873.25 but sellers just above at 4874.50 and we settle into two-way trade.  Look for the market to find direction for the day during Yellen’s testimony.

Hypo 2 sellers work down through overnight low 4848.75 and we find buyers just below it, settling into two way trade.

Hypo 3 strong buyers continue initiating fresh risk and push the market up to close the gap at 4886.50.  Stretch target is taking out the weak high at 4892.25 and targeting 4900 then 4907.

Hypo 4 sellers drive price back down to 4835 and test the top-end of last week’s balance again.  If buyers do not defend prior value high aggressively, we could press down through the entire value to target 4800.

Levels:

Volume profiles, gaps, and measured moves:

 

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