NASDAQ futures are coming into Wednesday gap up after an overnight session featuring normal range and volume. Price held the Tuesday range, trading balanced before giving way to buying after 7am, after the MBA Mortgage Application data came out better than last week. At 8:15am ADP Employment data showed US Private Payrolls incresed by 154,000 in September, below economists’ expectations of 165,000 according to Bloomberg.
Also on the economic docket today we have Trade Balance at 8:30am. Then at 10am we will hear about Non-Manufacturing Composite and Factory/Durable Goods Orders. At 10:30am they will put out oil inventory stats.
However the biggest impact economic event is scheduled for Friday morning—Non-farm payrolls.
Yesterday we printed a double distribution trend down. The day started with a gap up and buyers driving higher to close the 09/22 gap. A few ticks above the gap the market found strong responsive sellers who closed the overnight gap. Rotations were erratic, choppy, and fast in the morning before ultimately giving way to a secondary leg lower. The NASDAQ was bullish divergent from the S&P, and when the S&P was tagging its weekly measured move target the NASDAQ was tagging last week’s MCVPOC. This zone revealed a strong responsive bid and we closed back up near the session midpoint.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4858.25. Look for buyers down here who work price back up through overnight high 4870.25 and ultimately make new swing high to target the 4900 century mark. Stretch targets are 4907 then 4916.
Hypo 2 buyers gap-and-go, take out swing high 4892.25, tag the 4900 century mark. Look for a move up to 4916 before two way trade ensues.
Hypo 3 gap fill down to 4858.25 then a push down through overnight low 4849.25 setting up a move to target 4831 before two way trade ensues.
Levels:
Volume profiles, gaps, and measured moves:
