NASDAQ futures are coming into Monday gap up after an overnight session featuring normal range and volume. Price worked higher overnight, up beyond the Friday high and briefly into the upper quadrant of last Thursday before a responsive sell came in. As we approach cash open, price has fallen back into the Friday range.
On the economic calendar today we have a 3- and 6-month T-bill auction at 11:30am.
Last week markets began flat and with an early drive higher. The Monday morning rally discovered a strong responsive seller and we began rotating lower. The selling continued until late Wednesday morning when a strong responsive buyer reversed the auction. The rest of the week saw the Dow and S&P work higher while the NASDAQ bearishly diverged lower, in part driven by weak earnings from Nvidia. The last week performance of each major index is shown below:
On Friday the NASDAQ printed a normal variation up. The day began gap down and with a wide opening auction. Sellers then attempted a move down-and-away from the open but encountered a strong responsive bid ahead of low-of-week. We then spent the rest of the day working higher, eventually going range extension up and closed out the week in the lower quadrant of Thursday.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7388. From here we continue lower, down through overnight low 7385.25. Look for buyers down at 7369.50 and two way trade to ensue.
Hypo 2 buyers press out of Friday range right off the open, setting up a move to take out overnight high 7420.75. Look for sellers up at 7422.50 and two way trade to ensue.
Hypo 3 stronger buyers rally up to 7444 before two way trade ensues.
Levels:
Volume profiles, gaps, and measured moves:
