NASDAQ futures are coming into Wednesday gap up after an overnight session featuring elevated range and volume. Price was balanced overnight, briefly poking above the Tuesday high during the POTUS SOTU address. As we approach cash open price is hovering just above the Tuesday high.
Today is a transition day, economically and socially. A sad day for many. Fed chair Yellen, who has presided over one of the strongest market ever, will finish her final rate decision meeting today at 2pm.
Other less important economic items include pending home sales at 10am and crude oil inventory at 10:30am.
Also and remember, Microsoft and Facebook report earnings after the bell. Alibaba reports before market open Thursday.
It is also January 31st.
Yesterday we printed a normal variation up. The day opened pro gap down and a battle ensued off the open. Sellers pressed down through last Tuesday’s low before finding a strong responsive bid late-morning and choppy, two-way trade ensuing.
Heading into today my primary expectation is for a gap-and-go ‘farewell J.Yell’ rally higher. Look for buyers to reject a move back into the Tuesday range 6969.25 triggering a rally up to the gap at 6992.50 ahead of the FOMC decision. Use 3rd reaction after the Fed decision to dictate direction into the close.
Hypo 2 sellers to work back down into the Tuesday range 6969.25 and close the overnight gap 6936 before continuing lower thorough overnight low 6935.25. Look for buyers ahead of 6920. Use 3rd reaction after the Fed decision to dictate direction into the close.
Hypo 3 stronger buyers rally us to 7017.50 ahead of FOMC decision. Use 3rd reaction after the Fed decision to dictate direction into the close.
Levels:
Volume profiles, gaps, and measured moves:
interesting how it fulfilled primary hypo then worked through hypo 2, now we look balanced — market may be waiting to hear earnings after the bell before deciding direction