NASDAQ futures are coming into Wednesday flat after an overnight session featuring normal range and volume. Price was seen treading water overnight. We held the Tuesday range without much volatility present. At 7am MBA Mortgage Applications came out better than last week.
Also on the economic docket today we have crude oil inventories at 10:30am, the US Treasury is auctioning off $23B worth of 10-year Notes at 1pm, and there is a Monthly Budget Statement at 2pm.
Yesterday the NASDAQ printed a quite rare normal day which is anything but normal. According to my (needs to be updated) study, normal days only occur 5.66% of the time. The day began with a gap up beyond the Monday range. Then a strong rally pushed through, one that fizzled out a few ticks ahead of our measured move target. The dynamic morning action set a wide initial balance and we spent the rest of the day trading inside it. Investors were not initiating fresh risk for the rest of the day, as if they were expecting news.
Heading into today my primary expectation is for sellers to push down through overnight low 5667.75 and close the gap down to 5655. Look for buyers down at 5652.50 and two way trade to ensue.
Hypo 2 buyers work up through overnight high 5682.25 and probe all-time highs at 5687.75. Open air above, rally ensues.
Hypo 3 stronger sellers push down to 5639.25 before two way trade ensues.
Levels:
Volume profiles, gaps, and measured moves:
