NASDAQ futures are coming into Tuesday with a gap down after an overnight session featuring extreme range and volume. Price briefly poked higher overnight, taking out the Monday high by a few ticks before falling about -50 off of it, balancing for several hours, then continuing to campaign lower. At 8:30am retail sales data came out much lower than expected. On that note, Walmart earnings this morning exceeded analyst expectations despite a -34% drop in profitability year-over-year, hit by tighter margins and higher expenses. The retail giant is -0.50% in premarket trade. As we approach cash open price on the NASDAQ is hovering a bit above the Monday midpoint.
Also on the economic calendar today we have industrial production and business inventories at 10am followed by a speaking engagement with Fed Chairman Powell at 1:30pm.
Yesterday we printed what can be best described as a neutral extreme up. The day began with a gap down in range and after a brief test higher that did not quite fill the gap sellers stepped in and drove lower. The drive saw price down through last week’s low on heavy volume and made an early range extension down before responsive buyers stepped in. The auction sharply reversed in the late morning, and began to campaign higher, steadily making its way back to the midpoint and then breaking through it on the way to pressing neutral, effectively closing the overnight gap and then closing on the highs.
Interestingly, value on the day never shifted off the lows, suggesting the market may be eager to revisit the lows.
Heading into today my primary expectation is for buyers to work into the overnight inventory but stall around 15,071 setting up a move down through overnight low. Look for buyers down at 15,000 and for two way trade to ensue.
Hypo 2 buyers work a full gap fill up to 15,134.75 before two way trade ensues.
Hypo 3 sellers press down through the Monday low 14,917.25 and tag 14,000.
Levels:
Volume profiles, gaps and measured moves:
