NASDAQ futures are coming into Thursday gap up after an overnight session featuring elevated range on elevated volume. Price briefly traded below the Wednesday low overnight before spending the rest of the session drifting higher. At 8:30am advance retail sales data came out better than expected and initial/continuing jobless claims data was worse that expected.
Also on the economic calendar today we have business inventories at 10am.
Yesterday we printed a neutral extreme down. The day began with a gap up and buyers driving higher. We made a new record high ahead of the FOMC rate decision. At 2pm the Fed raised their benchmark borrowing rate by 25 basis points. Sellers stepped in, and third reaction analysis ultimately yielded a sell signal.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7230.25. From here we continue lower, down through overnight low 7205.25. Look for buyers down at the open gap 7195 and two way trade to ensue.
Hypo 2 buyers gap-and-go higher, trading up through overnight high 7262.75 and setting up a move to target 7300 before two way trade ensues.
Hypo 3 stronger sellers sustain trade down below 7190 setting up a move to target 7155.50.
Volume profiles, gaps, and measured moves:
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