NASDAQ futures are coming into Tuesday pro gap down after an overnight session featuring extreme range and volume. Price worked lower overnight, trending down the entire globex session. As we approach cash open, we are trading at price levels unseen since early April. At 8:30am housing starts data came out below expectations and building permits came in above expectations.
Also on the economic agenda today we 4- and 8-week T-bills being auctioned off at 11:30am.
Yesterday we printed a trend down. The day began with a gap down into the week and selling drive lower. The selling was steady and methodical, with price closing near session low.
Heading into today my primary expectation is for violent chop. Price is way out of balance and the higher timeframe is likely to be active on the open. Look for buyers to work a half gap fill up to about 6600 before sellers step in and two way trade ensues.
Hypo 2 gap-and-go lower. Trade down to 6423.75 before two way trade ensues.
Hypo 3 full-on-liquidation. Prices sustain below 6400 setting up a move to target 6300 then look for buyers down at 6277.
Volume profiles, gaps, and measured moves:
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