NASDAQ futures are coming into the first trading day of the week down about -350 after an overnight session featuring extreme range and volume. Price was balanced overnight until about 2am when sellers began campaigning price lower. As we approach cash open, price is hovering near last Friday’s low.
On the economic calendar today we have a 3-month T-bill auction at 10am, 52-week T-bill auction at 11:30am, 3-year note auction at 1pm and consumer credit at 3pm.
Last week kicked off with three days of buying across all major U.S. indices. The rally came to a conclusion Wednesday afternoon. From Thursday onward there was heavy selling pressure on the tape. While the Russell demonstrated some relative strength, all indices ended the week lower after reversing their upward trends from earlier in the week. The last week performance of each major index is shown below:
On Friday the NASDAQ printed a normal variation down. The day began with a gap down in range. An open-two way auction was quickly overrun by sellers who drove lower for the first hour and fifteen minutes of trade. This selling took price down to levels unseen since August 14th before discovering a bid. After a sharp excess low formed, buyers worked price back up to the daily midpoint. After battling over the mid for about two hours, buyers eventually reclaimed it and drove higher from it. Said buyers could not push the market into a neutral print. Instead stalling out at the daily high set during the open auction (to the tick). Price slightly faded back to the midpoint into the closing bell.
Heading into today my primary expectation is for buyers to work into the overnight inventory and trade up to 11,400 before two way trade ensues.
Hypo 2 sellers gap-and-go lower, trading down through 11,091 and sustaining trade below it, setting up a move to tag 11,000. Look for buyers down at the 8/11 open gap down at 10,903.50 and for two way trade to ensue.
Hypo 3 stronger buyers work a full gap fill up to 11,551.75 before two way trade ensues.
Levels:
Volume profiles, gaps and measured moves:
