NASDAQ futures are coming into Wednesday gap down after an overnight session featuring extreme volume on normal range. Price was balanced overnight, chopping along the upper quadrant of Tuesday’s range. As we approach cash open, price is hovering in the upper quad.
On the economic calendar today we have business inventories at 10am, NAHB Housing Market index at 10:45am, Fed’s Beige Book at 2pm and Long-term TIC flows at 4pm.
Yesterday we printed a double distribution trend up. The day began with a gap up and and drive higher, with price rallying up beyond the 09/20 liquidation down day’s high early on. Price then formed a tight consolidation along the highs before extending the gains later in the session and closing near session high.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up at 7959.50 before continuing higher through overnight high 7962.50. Look for sellers up at 7976 and two way trade to ensue.
Hypo 2 strong buyers rally up to 8000 before two way trade ensues.
Hypo 3 sellers press down through overnight low 7925.75 setting up a move down to 7900 before two way trade ensues.
Volume profiles, gaps, and measured moves:
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