NASDAQ futures are coming into Thursday pro gap down after an overnight session featuring extreme range and volume. Price drove lower overnight, continuing on the momentum of Wednesday afternoon’s selloff until about 2:30am, when responsive buyers stepped in slightly below last Friday’s open gap. Those sellers managed to put together a 110 point rotation higher that ran until about 6am. Since then sellers have been in control. At 8:30am initial/continuing jobless claims data came out very slightly worse than expected. At the same time housing starts came in soft and Philadelphia Fed data came out in line. As we approach cash open, price is in a bit of a free fall and nearing last Friday’s low.
Also on the economic calendar today we have 4- and 8-week T-bill auctions at 11:30am followed by a 10-year TIPS auction at 1pm.
Yesterday we printed a normal variation down. The day began with a slight gap up and after a tight open two way auction sellers stepped in and erased the open gap. Said sellers managed to take out the Tuesday low and press rang extension down by a few points before responsive buyers worked price back up to the daily midpoint. Sellers defended the mid, setting up a new low of the day. Third reaction to the FOMC rate decision was down and we spent the rest of the session working lower, eventually closing on session low, down in the lower quadrant of Monday’s gain.
Heading into today my primary expectation is for buyers to work into the overnight inventory, working up to 11,000 before stalling out and going into chop.
Hypo 2 sellers gap-and-go lower, tagging the open gap at 10,903.50 before two way trade ensues.
Hypo 3 full on liquidation. Downside targets 10,875 — 10,823 — 10,719 — 10,695.
Volume profiles, gaps and measured moves:
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