NASDAQ futures are coming into Wednesday pro gap down after an overnight session featuring extreme range and volume. Price worked lower overnight, taking out the Tuesday low early on and sustained a tight balance until about midnight when a fresh wave of selling worked price down to a new low on the week. Since them we have been in balance, and as we approach cash open price is hovering right along last Thursday’s low.
On the economic calendar today we have ISM employment/manufacturing along with construction spending at 10am then crude oil inventories at 10:30am.
Yesterday we printed a neutral extreme down, barely. The day began with a gap down in range and after an open two-way auction buyers stepped in and drove price higher. I say barely neutral extreme because just after the initial balance was set (just after 10:30am New York) price went a few handles higher, pushing range extension up and exceeding the prior swing high set on Friday the 13th by a bit. Then sellers stepped in, failed auction style. Sellers slashed down through the daily midpoint by late in the lunch hour and then defended a check back to the mid, eventually setting up a second leg lower, to a new low of day, neutral. We ended the day on the lows.
Neutral extreme down.
Heading into today my primary expectation is for buyers work into the overnight inventory and trade up to the 7700 composite VPOC. We chop here for a while before continuing higher, up through overnight high 7790.25. Look for sellers at 7813 and two way trade to ensue.
Hypo 2 sellers to gap-and-go lower, trading down through overnight low 7524. Look for buyers just below at 7512.50 (down as low as 7500) and two way trade to ensue.
Hypo 3 stronger sellers close the gap down at 7463.25 before two way trade ensues.
Volume profiles, gaps and measured moves:
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