NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume. Price worked lower overnight, trading down near the Tuesday low before discovering a responsive bid. Then price worked back up near the Wednesday low but could not reclaim it. Sellers rejected a move back into Wednesday’s range, and we have been in a choppy balance below the Wednesday low since. At 8:30am GDP came out inline with expectations and initial/continuing jobless claims data came out mixed-to-slightly-worse than expected. As we approach cash open, price is hovering about -12 point below the Wednesday low.
Microsoft, Facebook and Tesla reported earnings after hours Wednesday. MSFT is higher by +3.70% after beating analyst expectations, FB is down -7% lower after signaling a slowdown and announcing a share buyback and TSLA is up +8.95% after the company reported surprisingly strong numbers for the second straight quarter.
On the economic calendar today we have no major events. Amazon reports earnings after the bell and will likely move the entire index.
Yesterday we printed a normal day, which is anything but normal. They happen less than 20% of the time. The day began with a gap up into last Friday’s range. Sellers quickly drove price lower during the first 45 minutes of trade, working down into an interesting low volume pocket left behind Tuesday. Strong responsive sellers were on the scene here and nearly worked price to a new high of day, attempting to propel higher after the FOMC rate decision. However they were stopped a few ticks short, forming a weak high before slipping back down through the daily mid by late afternoon. The first 45 minutes of trade were so dynamic that higher time frame participants never managed to press a range extension. We ended the day in the lower quadrant.
Heading into today my primary expectation is for buyers to reclaim the Wednesday low 9072.25 and sustain trade above 9085, setting up a run up through overnight high 9137 and a continuation up through the Wednesday weak high 9185.75. This sets up a run at 9100. Look for sellers up at 9113 and two way trade to ensue.
Hypo 2 sellers defend 9085 and push us down from it, working down through overnight low 9003.50. Look for buyers down at 9000 and two way trade to ensue.
Hypo 3 stronger sellers work a Monday gap fill down to 8954 before two way trade ensues.
Volume profiles, gaps, and measured moves:
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