NASDAQ futures are coming into Wednesday gap up after an overnight session featuring normal range and volume. Price worked higher early this morning while company-after-company issued earnings well beyond analyst expectations. At 7am MBA mortgage applications came in below last week.
Also on the economic agenda today we have the Fed Rate decision at 2pm. There are several other low-impact events before the announcement including New Home Sales at 10am, crude oil inventory at 10:30am, a 2-year floating rate note auction at 11:30am, and a 5-year note auction at 1pm.
Yesterday we printed a normal variation up. The day began with a gay down and push lower, but sellers were unable to take out the Monday low. Instead the auction reversed higher and spent most of the day working upward. Price was contained however inside of the Monday range.
Heading into today my primary expectation is for a squeeze higher off the open, up to 5967.50 before we pause ahead of the Fed decision. Look for third reaction analysis after the announcement to give direction into the end-of-day.
Hypo 2 sellers work into the overnight inventory and close the gap down to 5935 then continue lower, down through overnight low 5927. Look for buyers around 5920 MCVPOC as we wait for Fed decision.
Hypo 3 strong buyers press up through 5974 and sustain trade above it, causing the NASDAQ to trend higher up into the Fed decision.
Levels:
Volume profiles, gaps, and measured moves:
Are CBs in aggregate expanding their balance sheet? yes? Buy.