NASDAQ futures are coming into Monday gap up after an overnight session featuring extreme range and volume, both are well beyond third sigma. At the forefront of volatility is ongoing tariff discussions between China and U.S., with today’s talking point being President Donald Trump saying China called and asked to restart talks. Price was careening lower Sunday evening and briefly exceeded the August cash low before finding responsive bidders and reversing higher. The rally that followed briefly took price up beyond the Friday midpoint before settling into a choppy balance along the Friday mid. At 8:30am durable goods orders came in stronger-than-expected. As we approach cash open, price is hovering below Friday’s mid.
Also on the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.
Last week U.S. equity markets began with a gap up and small rally before chopping sideways through Friday morning. Late Friday morning tarrif talk introduced heavy selling into the market and we went trend down into the weekend, across the board. The last-week performance of each major index is shown below:
On Friday, the NASDAQ printed a double distribution trend down. The day began with a gap down near the Thursday low. Buyers resolved the overnight gap and poked just beyond the Thursday mid before sellers took control of the tape. Price never went range extension up. Instead the morning gap fill trade was taken back and then price accelerated to the downside before settling into a methodical rotation lower. Late into settlement a bit of a ramp higher occurred.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7508. Buyers defend the 7500 century mark and we begin auctioning higher, eventually taking out overnight high 7626. Look for sellers up at 7670 and two way trade to ensue.
Hypo 2 gap-and-go higher, trade up to 7700 and sustain trade near hear, extended target is 7750.
Hypo 3 sellers close overnight gap then continue lower, down through overnight low 7353.25. Look for buyers just below at 7346 and two way trade to ensue.
Volume profiles, gaps, and measured moves:
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