NASDAQ futures are coming into Wednesday gap down after an overnight session featuring normal range and volume. Price worked a touch lower overnight, ultimately trading inside of the Tuesday range. At 7am MBA mortgage applications came out in-line with last week and at 8:15am ADP employment change came out in-line with expectations.
Also on the economic agenda today we have ISM service/non-manufacturing composite data at 10am and crude oil inventories at 10:30am.
Yesterday we printed a normal day. The gap up was sold into and once the gap was closed a mild responsive bid stepped in. We never extended the range of the first hour during the calm drift, hence the ‘normal’ designation despite the day-type being anything but normal. It only occurs about 5% of the time.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 5998.25. From there we continue higher, up through overnight high 6000.75. Look for sellers up at 6027.25 and two way trade to ensue.
Hypo 2 sellers press down through overnight low 5984 and continue lower, down to 5974.25 before two way trade ensues.
Hypo 3 a tight chop between 6000 and 5985.
Levels:
Volume profiles, gaps, and measured moves:
