NASDAQ futures are coming into Tuesday gap down after an overnight session featuring normal range and volume. Price took out the Monday high, briefly, during extended trading hours before a significant rotation lower pushed through. The down move stalled around the Monday RTH midpoint. At 8:30am Housing Starts came in below expectation and Building Permits above expectations.
Also on the economic docket today we have Industrial/Manufacturing production at 9:15am, and a 4-week T-bill auction at 11:30am.
Yesterday we printed a double distribution trend up. Price opened the week gap up and buyers bought into it before we spent much of the day churning sideways. Then, the afternoon featured a ramp higher.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 5394.50. From here sellers step in and work lower, down through overnight low 5375.50. Look for buyers down at 5374 and two way trade to ensue.
Hypo 2 sellers work a gap and go lower, down through overnight low 5375.50 and continue lower, targeting the weekly gap down at 5358.75 before two way trade ensues.
Hypo 3 buyers work a gap fill up to 5394.50 the continue higher, up through overnight high 5403.75 triggering a rally up to 5430 before two way trade ensues.
Volume profiles, gaps, and measured moves:
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