NASDAQ futures are coming into Tuesday pro gap up after an overnight session featuring extreme range and volume. Price worked higher overnight poking up beyond 9900 before settling into a balance along that level. Then at 8:30am retail sales data came out much stronger than expected introducing more buying. As we approach cash open, we are hovering just below 10,000, in a slippery gap area left behind last Tuesday night.
Also on the economic calendar today we have business inventories and housing market index at 10am. At the same time Fed Chairman Jay Powell begins his testimony to the Senate banking committee. We have 4- and 8-week T-bill auctions at 11am followed by a 52-week T-bill auction at 11:30am.
Yesterday we printed a trend up. The day began with a sizable gap down. After a brief open two-way auction saw price poke a few ticks below last Friday’s range, buyers stepped in and controlled the tape for the rest of the session. There was a bit of back-and-forth after closing the overnight gap before buyers resumed their campaign higher. Late in the session news came out of the Fed that they would be buying a broad portfolio of corporate bonds on the open market. This introduced a fresh leg of buying. We ended the session along the highs, but still below last Friday’s high.
Heading into today my primary expectation is for buyers to gap-and-go higher, trading up to 10,013 before two way trade ensues.
Hypo 2 stronger buyers trade up to close the gap at 10,083.50 before two way trade ensues.
Hypo 3 sellers press into the overnight inventory and close the gap down to 9792. From here we continue lower, down through overnight low 9774. Look for buyers right around here and two way trade to ensue.
Levels:
Volume profiles, gaps and measured moves:
