I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
3,502 Blog Posts

Apple data suggests China slowdown, sending NASDAQ -150 but strong ADP data brings in buyers, -100 heading into Thursday open, here’s the trading plan

NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume.  Price worked sharply lower shortly after Wednesday settlement on news that Apple was cutting their sales guidance.  Per the Associated Press:

Cook said Apple’s revenue for the October-December quarter — including the crucial holiday shopping season — will fall well below the company’s earlier projections and those of analysts, whose estimates sway the stock market.

Apple now expects revenue of $84 billion for the period. Analysts polled by FactSet had expected Apple’s revenue to be about 9 percent higher — $91.3 billion. The official results are scheduled to be released Jan. 29.

By 10pm New York, NASDAQ futures were probing below the Wednesday cash low.  However by 7am responsive buyers had worked price back into the Monday range.  At 8:15am ADP employment change data came out much stronger than expected:

The ADP data brought additional buying into the morning pre-market, reducing the overnight losses to -100.  The Labor department remains funded despite the U.S. government shutdown, however the Commerce department is closed and no construction spending or unit vehicle sales will be released today.  At 8:30am initial/continuing jobless claims data from the Labor department was worse than expected.

Also on the economic agenda today we have ISM manufacturing/employment at 10am followed by a 4- and 8-week T-bill auction at 11:30am.

Yesterday we printed a double distribution trend up.  The first day of the 2019 trading year began with a pro gap down that started prices out in the middle of a conviction buying zone established on Thursday, December 27th.  Buyers were active on the open and drove price higher, filling the pro-gap by New York lunchtime.  Buyers managed to extend their gains in the afternoon, but the auction stalled out just after probing above last week’s high.  Mini failed auction.  The day ended with price in the upper quadrant of the session.

Heading into today my primary expectation is for buyers to work into the overnight inventory, trading up to the 6300 century market.  A two-way battle ensues here before buyers ultimately continue working higher to close the overnight gap at 6370 before two way trade ensues.

Hypo 2 buyers press down through 6220 on the open, setting up a move down through overnight low 6188.25.  This sets up a move to tag the naked VPOC at 6151.75 that we left behind on 12/27.

Hypo 3 stronger buyers work up through overnight high 6361 setting up a move to target 6406.75 before two way trade ensues.


Volume profiles, gaps, and measured moves:

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