NASDAQ futures are coming into Monday gap up after an overnight session featuring extreme range and volume. Price worked lower Sunday evening, briefly trading below last week’s cash low [established Monday] before discovering a strong responsive bid. The rest of the globex session was spent rotating higher, uni-directionally. As we approach cash open price is hovering near Friday’s midpoint.
On the economic calendar today we have a 3- and 6-month T-bill auction at 11:30am.
Last week began with a choppy Monday, a normal day which is rare. Then Tuesday say a gap up and trend higher. Wednesday held the gains in choppy trade but then most gains were given back Thursday. Friday attempted to rally but was rejected and we closed above, but near the week’s low.
On Friday the NASDAQ printed a double distribution trend down. The day began with a gap up and and drive higher. The drive stalled before the first hour [initial balance] and responsive sellers stepped in. They erased the morning drive then quickly closed the overnight gap. The rest of the day was spent chopping along the lows. The market briefly took out Thursday’s low during the chop but could not sustain trade below it.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7107.75. Buyers step in here and two way trade ensues, eventually working back up through overnight high 7176.75 by end-of-day.
Hypo 2 buyers gap-and-go higher, sustain trade above 7188.25 setting up a move to target 7200. Stretch target is 7263.50.
Hypo 3 stronger sellers close overnight gap 7107.75, then take out last Monday’s gap 7076.25 on their way to taking out overnight low 7057. This sets up a move to target the 7000 century mark.
Levels:
Volume profiles, gaps, and measured moves:
primary hypo was golden!
the market is an auction, hopefully you guys are formulating your ideas in a similar manner