NASDAQ futures are coming into Wednesday gap down after an overnight session featuring elevated range on extreme volume. Price worked lower overnight, trading down below the Tuesday range before coming into balance. At 8:30am, consumer price index data came out and below expectations, suggesting inflation is below expectations. As we approach cash open, price is hovering just below the Tuesday range.
Also on the economic calendar today we have crude oil inventories at 10:30am followed by a monthly budget statement at 2pm.
Yesterday we printed a normal variation down. The day began with a gap up and probe higher, up beyond the Monday high (which was set after tagging an old naked value point of control from May 17th) which discovered strong responsive sellers. The rest of the early morning was choppy and volatile before giving way to sellers who eventually closed the overnight gap and pressed a bit below it, but never took out the Monday low before we balanced into the close.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7518. From here we continue higher, up through overnight high 7531. Look for seller ahead of 7550 and two way trade to ensue.
Hypo 2 sellers reject a move back into Tuesday range low 7492.75 setting up a move down through overnight low 7472.75. Look for buyers down at 7460.25 and two way trade to ensue.
Hypo 3 stronger buyers press up through overnight high 7531, tag the 7600 century mark and sustain trade above it setting up a move to target the open gap at 7645 before two way trade ensues.
Levels:
Volume profiles, gaps, and measured moves:
