NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range on abnormally low volume. Price worked higher overnight, slowly, taking out the Monday high just before cash open.
The economic calendar has a few low/medium impact events to be aware of today. At 9:45am Markit will announce the Manufacturing PMI number, at 10am Existing Home Sales, at 11:30am there’s a 4-week T-bill auction, and at 1pm a 2-year Note auction.
Yesterday we printed a normal variation down. Price started the week gap down. Sellers quickly pressed higher, closing the gap (and then some) before a responsive seller stepped in and reversed prices lower—down through last Wednesday’s low before a responsive bid stepped in. We then formed a sharp excess low and buyers spent the rest of the day reclaiming much of the morning sell off.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5063.25. This sets up a move to take out overnight low 5060. Look for buyers down at 5053 and two way trade to ensue.
Hypo 2, fifth consecutive day to start with a sharp spike higher early on, up through overnight high 5072.25 and a test above swing high 5083 before reversing the entire move and trading down to 5053..
Hypo 3 buyers work higher, up through swing high 5083 and sustain trade in this region, setting up a rally. Stretch target is 5095.75 then 5100.
Hypo 4 strong sellers press down through 5053 and sustain trade below it setting up a move to 5041.
Levels:
Volume profiles, gaps, and measured moves:
