NASDAQ futures are heading into the first full week of the March contract gap up after an overnight session featuring elevated range and volume. Price was gap up Sunday evening when the Globex markets opened for trade. The buying continued for three minutes before sellers assumed control of the tape until about midnight New York. Said sellers were unable to return price back to the Friday range. Instead we formed a tight balance above the Friday range for much of the session and even briefly probed up beyond the Thursday high. As we approach cash open, price is hovering in the upper quadrant of Thursday’s range.
On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.
Last week U.S. equity markets saw a rally through early Wednesday morning, then hard selling Wednesday. Some consolidation selling during the rest of the week but no real follow-through. Divergent strength from the Russell 2000 suggests risk tolerance remains strong. The last week performance of each major index is shown below:
On Friday the NASDAQ printed a neutral extreme up. The day began with a gap down into the lower quadrant of Thursday’s range. Sellers drove lower for 15 minutes after a brief open two-way auction. Then buyers surged price back up above the Thursday midpoint, briefly. Buyers could not reclaim a logical resistance level there and sellers were able to press range extension down into lunchtime. Said sellers were unable to show much follow thru, not even able to take out the Thursday low. That set up a rally for the rest of the session, eventually leading to a close on high of day.
Neutral extreme up.
Heading into today my primary expectation is for a gap-and-go higher. Look for buyers to take out overnight high 12,453.50 early on, setting up a run to 12,500 before two way trade ensues.
Hypo 2 stronger buyers tag 12,531.75 before two way trade ensues.
Hypo 3 sellers work into the overnight inventory and take out overnight w 12,388 on their way to closing the overnight gap down at 12,366.25.
Levels:
Volume profiles, gaps and measured moves:
