NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume. Price was balancing along the upper quadrant of Wednesday range overnight until about 3:30am New York. From then onward it has been all selling, with sellers effectively erasing the entire rally that formed after the FOMC annoucement and Powell press conference, a press conference that is being touted as Powell’s best. The selling campaign worked price down into the lower quadrant of Wednesday’s range. Then at 8:30am jobless claims data came out worse than expected and Philadelphia Fed data much better than expected. As we approach cash open, price is hovering in the lower quad of Wednesday’s range.
Also on the economic calendar today we have 4- and 8-week T-bill auctions at 11:30am.
Yesterday we printed a normal variation up. The day began with a gap down below Tuesday range. After an open auction outside range buyers worked higher but were rejected from re-entering the Tuesday range. Instead price fell back to the mid and eventually down through it. Sellers worked back down near the daily low but were unable to break down through it. Instead price was choppy down below the mid for the hours leading into the Fed announcement. Then price shot higher, reclaiming the mid and going range extension up within one minute of the data. There was a bit of back-and-forth along the high before a strong rally sent price up through most of the Tuesday range. Buyers eventually tagged the Tuesday VPOC before falling off the high a bit into the close. Of note, value never shifted higher yesterday afternoon. Instead it remains where it was before the Fed announcement.
Heading into today my primary expectation is for buyers to work into the overnight inventory and tag the Wednesday VPOC 13,000 before two way trade ensues.
Hypo 2 stronger buyers work a gap fill up to 13,189 and continue higher, up through overnight high 13,267. Look for sellers up at 13,300 and for two way trade to ensue.
Hypo 3 sellers gap-and-go lower, tagging 12,852 before two way trade ensues.
Levels:
Volume profiles, gaps and measured moves:
