NASDAQ futures are coming into Tuesday gap up, out of range after an overnight session featuring elevated volume and extreme range. Price worked higher all night, at first rapidly after Netflix reported better-than-expected earnings and guided higher Monday evening, then slowly throughout the night to levels unseen since late March. At 8:30am housing starts and building permits both came in better-than-expected.
Also on the economic calendar today we have industrial/manufacturing production at 9:15am, a 4-week T-bill auction at 11:30am, and IBM earnings after-market-close.
Yesterday we printed a neutral extreme up. The day began gap up in range. Sellers worked the overnight gap nearly closed before a strong buy stepped in. Sellers worked a full gap fill later in the morning, eventually taking out overnight low by a few ticks before a responsive bid stepped in. We traversed the entire daily range and eventually closed at session high.
Heading into today my primary expectation is for buyers to gap-and-go higher. Price trades up to 6774.75 before two way trade ensues.
Hypo 2 sellers work into overnight inventory and close the gap down to 6712.75 then continue lower, down through overnight low 6698.50. Look for sellers down at 6694 and two way trade to ensue.
Hypo 3 stronger buyers sustain trade above 6774.75 setting up a move to target 6814.75 before two way trade ensues.
Volume profiles, gaps, and measured moves: