NASDAQ futures are coming into Tuesday gap up after an overnight session featuring extreme volume on elevated range. Price worked higher overnight, trading up beyond the Monday high in the early evening and then catching a bid off the high later at night. As we approach cash open price is hovering in the lower quadrant of last Friday’s double distribution trend down.
On the economic calendar today we have case-shiller home price index at 9am, consumer confidence at 10am, a 52-week t-bill auction at 11:30am, and a 2-year note auction at 1pm.
Yesterday we printed a normal variation up. The day began with a gap down-and-away from the Friday range. Sellers drove down off the open but a strong responsive bid was found before we could go range extension down. When sellers attempted to push the market neutral during the afternoon, a responsive bid was again discovered and we worked back up near the daily high by end-of-day.
Heading into today my primary expectation is for buyers to gap-and-go higher. Look for a move up through overnight high 7403, then look for sellers up at 7414 and two way trade to ensue.
Hypo 2 stronger buyers trade us up to 7460.25 before two way trade ensues.
Hypo 3 sellers work into the overnight inventory to close the gap down to 7355.75. From here we continue lower, down through overnight low 7351. Look for buyers down at 7313.75 and two way trade to ensue.
Levels:
Volume profiles, gaps, and measured moves:
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