NASDAQ futures are coming into Wednesday gap down after an overnight session featuring extreme range and volume. Price was balanced overnight after an impulsive drop lower on the unexpected news that Gary Cohen would step down from his role as economic counsel to President Trump. Price worked down near the Monday low before discovering a bid. At 7am MBA mortgage applications came in worse than last week. At 8:15am ADP employment data was better than expected. At 8:30am Trade Balance data was below expectations.
Also on the economic docket today we have crude oil inventories at 10:30am, Fed beige book at 2pm, and consumer credit at 3pm.
Yesterday we printed a neutral day. The day began with a gap up and slow move higher. After briefly going range extension up sellers stepped in and close the overnight gap, taking us RE down along the way. The rest of the day we spent chopping along the daily midpoint.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the overnight gap up to 6906. Look for sellers ahead of 6922 and two way trade to ensue. A check back to the “scene of the crime” to see if sellers truly meant business.
Hypo 2 sellers arrive ahead of 6882 setting up a move to take out overnight low 6798.25 which triggers a liquidation down to 6764.50. Look for buyers ahead of 6740 and two way trade to ensue.
Hypo 3 stronger buyers rally up through 6920 and sustain trade above it setting up a move to target 6947.75.
Volume profiles, gaps, and measured moves:
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