NASDAQ sliding lower after spending most of night balanced, here is the Wednesday trading plan

NASDAQ futures are coming into Wednesday gap down after an overnight session featuring off-the-charts extreme volume and extreme range.  Price was balanced for most of the session, chopping along the lower-quadrant of Tuesday range before slipping lower rapidly around 8:55am, back to the Tuesday low.  At 8:30am advance good trades balance data was worse than expected and GDP was better than expected.

Also on the economic calendar today we have pending home sales at 10am, 2-year note auctions at 11:30am, and 7-year note auctions at 1pm.

Yesterday we printed a double distribution trend down.  The day began with about a 40 point gap up.  After a brief open auction price worked lower and closed the gap.  A strong responsive bid entered at that point and it appeared the market was in balance.  However, strong selling came in during the afternoon, with sellers becoming initiative, pressing us into a trend down.  We closed near session lows, and below last Friday’s low.

Heading into today my primary expectation is for buyers to work into the overnight inventory and trade up to 6650 closing the overnight gap.  Then sellers return us down through overnight low 6482.50 setting up a move to target 6439.25 before two way trade ensues.

Hypo 2 sellers gap-and-go lower, trade us down through overnigtht low 6482.50, pressing down to 6439.25 then continuing lower, down to 6414.50 before two way trade ensues.

Hypo 3 stronger buyers sustain trade above 6650 setting up a move to take out overnight high 6582.25.  Look for sellers to defend 6600 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

If you enjoy the content at iBankCoin, please follow us on Twitter