NASDAQ futures are coming into Thursday pro gap up after an overnight session featuring extreme range and volume. Price worked higher overnight, drifting above the Wednesday high during the early evening hours before spiking higher around 9:30pm New York on news that the U.S. and China agreed to return to trade talks in October. The news sent the NASDAQ higher, trading up into the lower quadrant of the August first range before finding sellers and coming into balance. At 8:15am ADP employment change data came out better-than-expected. At 8:30am initial/continuing jobless claims data came out mixed. As we approach cash open, price is hovering inside the August first range, with price up beyond a choppy trading range the NASDAQ has been inside of since August second.
Pro gap up because we are entering the day out of intermediate-term balance.
Also on the economic calendar today we have factory/durable goods orders at 10am, crude oil inventories at 11am, and both 4- and 8-week T-bill auctions at 11:30am.
Yesterday we printed a normal variation up that nearly resembled a double distribution trend up. The day began with a gap up beyond the Tuesday high. During a two-way open auction that first attempted higher, then began to work lower, sellers were campaigning back down into the Tuesday range before the auction completely stalled and reversed ahead of 10:30am. Buyers had a slight battle at the daily midpoint before spending the rest of the day campaigning higher, ultimately ending the day near session high and in the upper quadrant of last Thursday’s range.
Heading into today my primary expectation is for sellers to press into the overnight inventory and trade down to the 7800 century mark. Buyers step in here and work up through overnight high 7839.75. Look for sellers up at 7842 and two way trade to ensue.
Hypo 2 buyers drive higher off the open, taking out 7842 then sustaining trade above 7853 to set up a move to target 7900 before two way trade ensues.
Hypo 3 sellers reverse the overnight news driven move, closing the overnight gap down to 7722.50 then continuing down through overnight low 7717.25 before two way trade ensues.
Volume profiles, gaps, and measured moves:
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