NASDAQ futures are coming into Tuesday gap up about +50 after an overnight session featuring elevated range and volume. Price drifted higher overnight, drifting up beyond the Monday midpoint. At 8:30am durable goods orders came out inline with expectations, and as we approach cash open price is hovering above the Monday mid.
Also on the economic calendar today we have consumer confidence at 10am followed by a 2-year note auction at 1pm.
Yesterday we printed a double distribution trend down. The day began with a gap down in range, a sizeable one (about -100). Buyers quickly resolved the gap with an open drive up, taking out overnight high, closing the gap and briefly exceeding last Friday’s high before stalling out a few points below 11,700. After a responsive sell reversed the auction sellers quickly became initiative, reversing the open drive and putting us into an early range extension down. The selling continued throughout the morning and lunch, coming to a climatic end around 1:45pm when a sharp excess low formed. We were down in levels unseen since October 6th (three Tuesdays back) when we found the bid—right at the low volume node of the big market profile we built between 10/2 and 10/9. It was all buying from then on, and buyers managed to return price back near the midpoint by end-of-day.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 11,500.50. Sellers continue lower, down through overnight low 11,478.25. Look for buyers down at 11,424.25 and for two way trade to ensue.
Hypo 2 buyers gap-and-go, trading up though overnight high 11,566 and tagging 11,600 before two way trade ensues.
Hypo 3 stronger buyers trade up to 11,700 before two way trade ensues.
Volume profiles, gaps and measured moves:
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