Feels Different Today

212 views

Yesterday afternoon we started to see a behavioral shift from the marketplace. The Nasdaq slowed down and flagged about, much like it did last Friday. The violent waves as we explored the southern tip of the charts opened up to a peaceful, calm, quiet pond. Whether this behavior sticks is unknown but the change has so far carried over into Globex. Overnight the Nasdaq traded on the low end of its normal range on normal volume. Prices drifted above yesterday’s cash highs briefly before finding responsive sellers.

Last night the biggest post-earnings price action was seen in SBUX which traded higher after reporting. At 8:30am we had Chicago Fed Activity and it brought some selling in. At 9:45am we have Markit PMI stats set for release. This announcement shortly after the open may induce some early chop. We also have Existing Home Sales and leading indicators at 10am.

Yesterday was the third straight day of advance in the Nasdaq and price action tends to become a bit rocky on the fourth session. However, bulls have done well to negate the intermediate term seller control, pushing us back into a more neutral-to-bullish stance. We are currently trading in the upper pocket of our triple volume distribution, see below:

01232015_NQ_VPnaked

Drilling a bit closer to the action, we can see prices are coming into the lower end of a large balance area above. It makes sense to expect some overhead supply in this region. Given the pocket-nature of our current trade location, we might still see some speed in the market.

Early on, I am expecting a choppy open auction, inside Thursday’s range before buyers make an attempt at the overnight high 4275.25. Not far above there I will be looking for signs of responsive sellers who work us back below Thursday’s close 4266 and choppy-two way action takes hold.

Hypo two is sellers a bit more aggressive on the open, pushing us over the ledge at 4258.25 and sliding us down through most of the afternoon push higher to test it’s starting point down at 4235.

Hypo 3 is strong bulls push up through 4277.75 and begin exploring the upper balance zone.

These levels can be seen below:

NQ_MarketProfile_01232015 01232015_NQ_VP

Now We Wait

186 views

Nasdaq futures are lower as we head toward cash open. The range and volume associated with the move are about as normal as it comes, both falling right in the middle of their respective Gaussian distributions. Price managed to take out yesterday’s cash high 4175.25 for a while but eventually traded lower. Yesterday evening’s big surprise came from NFLX earnings, which propelled the stock much higher in after-hours trade. The Presidential State of The Union had little effect on index price. Just ahead of the 8:30am housing-type data we saw a run-up in prices which has subsequently faded off/traded flat since.

Yesterday we were gap up to start the week (on a Tuesday) and subsequently faded lower for much of the morning. It was only when price attempted to enter the value zone established when combining last Thursday and Friday that we saw a sharp responsive buyer. Their behavior was strong enough that it reversed the auction process in the opposite direction and we ended the day with a Neutral Extreme print.

The Neutral Extreme print carries strong directional conviction, second only to the trend, or, conviction day. Contributing to the validity of this structure was an end-of-day VPOC shift to the high end of the range. Calling the strength into question is cumulative delta, which, could not manage to stay positive.

Heading into today, my expectation is for buyers to push early on to close the overnight gap to 4167.25 then struggle a bit with 4171.50 before working to take out overnight high 4178.50 and targeting 4184.25 where we see sharp responsive selling.

Hypo 2 is sellers on the open work down to take out overnight low 4149 and target 4146 – 4142 where we see responsive selling and then an attempt at filling the overnight gap.

Hypo 3 is a stronger buying drive early on that takes out 4184.75 early on and opens the door to run up the zipper to 4229.75.

Hypo 4 is strong sellers take out 4142.50 and work back down into Tuesday’s lower distribution and target 4127.50.

These levels are on the following charts:

01212015_NQ_VP

NQ_MarketProfile_01212015

State of The Nasdaq

147 views

Nasdaq futures are higher overnight on a slow-grind type session of trade. As we head into cash open sellers are recapturing some of the progress. The gap up to start the week has been a common feature the last several weeks; a common feature which gives way to selling. Whether that continues to be the case this week will be interesting to observe. Range is on the high end of normal for a globex session and volumes are running in the 2nd sigma.

At 10am we have the NAHB Hosing Market Index as well as Fed’s Powell speaking. The housing data may carry an elevated impact on market prices after the weak showing from the Residential Construction industry last week. Several of the premarket earnings came in well. After hours, two of the majors we will hear from are IBM and NFLX. We also have a Presidential State of the Union Address set for 9pm. More housing stats are set for release in the premarket tomorrow.

Prices are trading inside a big area of acceptance currently, the microcomposite VPOC sits right at 4144.50. These high-volume areas tend to produce murky, choppy trading action. On either edge of this value we have volume pockets which are where the greater opportunity for trend-like behavior resides. Overall, the intermediate term timeframe is neutral-to-bearish. See below:

01202015_NQ_VP

Short term we are gap up with some magnets below. Early on my expectation is for sellers to push into the overnight inventory and take us back to the MCVPOC at 4144.50 and continue lower to close the open gap down to 4134.75. I will look for signs of responsive sellers here (responsive relative to the overnight session, initiative relative the Friday) who work toward taking out the overnight high 4168.

Hypo 2 is buyers enter aggressive early and take out overnight high 4168.25 and continue higher to 4184 and possibly trend through that area.

Hypo 3 is sellers close the overnight gap 4134.75 and continue lower to 4120 area. I have highlighted these areas on the following market profile chart:
NQ_MarketProfile_10202015

The Only Way Out Is Work

171 views

Nasdaq futures are lower overnight and as we come into cash open price are hovering just below Thursday’s range. Volume and range remain 2nd sigma elevated as the aftershocks continue to rip though global markets after an unexpected move from the SNB.

We came into the globex session with sellers pushing and the continued to do so into the afternoon and evening yesterday. INTC earnings were inline yesterday but shares still traded lower which may have contributed. Price pressed into the open gap from 10/27 before finding responsive buyers ahead of a closing of the range gap. Buyers pushed up but were unable to reclaim Thursday’s low 4077.75. We then revisited, but did not take out, the globex lows giving the session a weak looking low.

At 8:30am CPI data brought some buyers into the market who again struggled to reclaim Thursday’s lows.

We had Industrial/MFG production numbers out at 9:15am. We also have U of M Confidence at 10am, Fed’s Williams speaking at 11am, and Fed’s Bullard set to speak at 1:10am. The markets are also cruising into a long weekend as they will be closed Monday in observation of MLK.

Yesterday’s session featured sellers continuing to control the action. There was an interesting shelf formation at 4106.75 which served as a pivot for much of the session. Sellers eventually claimed victory of the area. Early on my primary expectation is for buyers to work into this overnight (short) inventory and close the overnight gap to 4089 to target the VPOC at 4095.25. There I am looking for responsive sellers to step in and continue driving lower. A return to the scene of the CPI bounce at 4061 puts us at the overnight midpoint. From there we continue to take out overnight low 4041.50 and close the range gap to 4040 then the full gap to 4033.

Hypo 2 is sellers drive off the open and run into a bit of demand at 4061 but overrun it and go fill the gap at 4040 then 4033 and overshoot to tag the NVPOC at 4028.

Hypo 3 is sellers early who are defended away above 4061 and buyers push the gap fill and retake the shelf pivot at 4106.75 to set up another leg higher.

You can see these price levels below:

01162015_NQ_VP_midday

NQ_MarketProfile_10162015

Strange Overnight Session Merits Caution

172 views

Volume and range shot well beyond second sigma overnight. This is a clear signal that what you are seeing taking place in the markets this morning is anything but normal. The primary driver of this volatility was forex macro moves resulting from an unexpected move by the Swiss National Bank.

Also occurring overnight was a move higher in oil. This morning the markets are dealing with more earnings from big banks who one after another are seeing share prices lose value post earnings. BAC is trading lower as is C although Citi is currently holding its prior lows.

At 8:30am the economic data including initial/continuing jobless claims, PPI, and Empire Manufacturing brought in some buyers who were quickly faded. This afternoon after market close we will here from INTC while the entire semiconductor industry teeters on the edge of a breakdown. We also have many more banks set to report tomorrow morning and CPI before market open.

Turning our attention to the auction, we can see some weak shelving occurring right at 4106.75. This level will be a big tell today. My initial expectation is we ‘spill over’ the shelf which opens the door for a test of the overnight lows which puts us in range of testing the prior swing lows and the Nasdaq on the cusp of breaking lower. See the context below:

NQ_MarketProfile_10152015

The intermediate term shows sellers controlling the market.

Yesterday the market continued trading lower until we closed to open gap from 01/06. Once we hit these levels a sharp buying response took hold and saw some continuation off the value zone around 4118.75. Buyers were unable to push through the early highs of the session during the afternoon ramp but did see their progress carry through into the overnight session.

The overnight session carried over 100 points of range and as we approach cash open we are trading right near the midpoint of that range. Early on I am looking the yesterday’s VPOC at 4138 as a short term pivot. If sellers can sustain trade below this level that adds confidence to my primary expectation for trade to take out the market profile shelf at 4106.75 (seen above).

Hypothesis 2 is strong buyers off the open who take out yesterday’s session high 4159 and continue probing higher into the volume pocket at 4171.50 and a continued auction higher to target overnight high 4190.

Hypo 3 is a slow open auction inside yesterday’s range and then 2-way chop between 4171.50 and 4118 which eventually gives way lower during the lunch hour.

I have highlighted these levels on the following volume profile chart:

01152015_NQ_VP

Working With The Pro Gap

156 views

Nasdaq volume and range went 2nd sigma overnight as the index traded lower for much of the session. As we approach cash open prices are below Tuesday’s range and we are in a “pro gap” type environment. The selling accelerated at 8:30am when weaker-than-expected Advance Retail Sales data hit the wires. We also had an corrective-type event in copper prices, the Japanese Yen is very active, and JPM missed earnings. WFC is trading lower premarket as well after reporting earnings.

Today we have crude oil inventory stats out at 10:30am. The weekly report is likely to be closely followed by all speculators as the commodity continues to correct lower. We also have Business Inventories at 10am and the Fed Beige Book at 2pm. Premarket tomorrow we will hear Continuing/Initial job claims and also earnings from BAC and C.

Yesterday prices opened gap up and we had an opening drive higher. After a strong first hour of trade buyers pushed us above the IB and we unable to test Friday’s high. The lack of order flow above the high was ominous and we quickly fell back to the daily mid. From there buyers were unable to defend and we gave back the entire opening drive and then some in a large impulse-type move. The overall print was a neutral print, perhaps barely able to classify as a neutral extreme.

The overnight session looks like a completion of the impulse wave. Early on my expectation is for buyers to push into the overnight short inventory and test Tuesday’s session low 4126.75 and likely push into the range a bit up to the LVN at 4138. From there I expect responsive sellers will step in and continue pressing lower to close the open gap at 4102.25 and test recent swing low 4082.

Hypo 2 is an open drive down. The risk of a drive is elevated given the recent price action on open and how we are out of balance to start the day. Drive down looks to test recent swing low 4082 early and push through to test 4069 then 4053.

Hypo 3 is a stronger than expected open which takes out the LVN at 4038 and sustains trade above it. This type of action likely builds into a full gap fill up to 4158.75.

These levels are highlighted on the following profile charts:

01142015_NQ_VP

NQ_MarketProfile_10142015

The Long Liquidation Strike

167 views

Nasdaq futures are trading higher on the globex session. The buyers stepped in around 3am after defending the value area low of Monday’s cash session. Range overall on the globex session is on the high end of normal [1st sig] as is volume. Oil is trading up into the open and we saw a positive earnings reaction from KB home this morning.

At 10am we have JOLTS, a low impact event. 2pm Monthly budget statement, and 5pm we have Fed speak from Kocherlakota. Tomorrow premarket we have WFC & JPM earnings and also Advance Retail sales, Fed’s Plosser, and MBA Mortgage applications.

The main feature of yesterday’s action that had me constructive was the b-shape of the market profile. This suggested a short term phenomenon known as a long liquidation. An early entrant pressured the market lower which forced longs into liquidating. Once that business was complete the market balanced and showed decent signs of excess(tails). You cannot see the tails as clearly, but the b-shape is quite evident on an old school MP:

NQ_MarketProfile_10132015

Primary hypo is a 2-way open auction with big chop where sellers push into overnight inventory and test down to 4180 area. If no buyers than test down to 4176 area before we work higher to test Monday session high 4218.50

Hypo 2 is for buyers to thrust early and run us up the zipper and test Monday’s HOD 4218.50. Just above around 4224.25 I will look for signs of responsive sellers.

Hypo 3 responsive sellers reject the overnight move and sustain trade back inside the b-shape, below 4176. Then we test through to 4160 area and continue probing lower.

These levels are highlighted on the following volume profile chart:

01132015_NQ_VP

OPEX Context

173 views

So far we have seen interesting globex action to start the week off. The Nasdaq traded inside of Friday’s wide range and held the low end of value before seeing a strong rotation higher. The move merited splitting the profile in half to see a clearer picture of the auction.

Before thrusting higher the market spent a considerable amount of time linger on those lows and from price action alone it looks like a weak low. However, from the profile view the volume distribution is decent. The globex high however seems a bit weaker.

The early battle ground is right near the 4200 century market. It will likely serve as an early pivot for the session. I have noted this zone on the following market profile chart:

NQ_MarketProfile_10122015live

We have Fed’s Lockhart speaking on US Economic Outlook at 12:40pm down in Atlanta. He is a voting member of the FOMC and may shake this market up a bit. This week is also monthly option expiration so we may see some big intraday waves, something to keep in mind.

Primary hypo for today is open auction in range, sellers work to close the overnight gap to 4201.50 and we see if this level attracts responsive buyers who then work toward overnight high 4227.50, then target MCHVN 4233.25 and potentially probe the upper pocket at 4240.50.

Hypo 2 is sellers capture the 4200 pivot then look to take out overnight low 4195 and test the LVN at 4193. Losing this level opens us up to retest Friday low 4181 which puts us in gap territory. Range gap fill is 4163.25 full gap fill is 4152.

Hypo 3 is drive higher, take out poor-looking overnight high and work up to test Friday session high 4248.50 and then test up to 4260 area.

These price levels are all highlighted on the following volume profile chart:

01122015_NQ_VP2

Now Is No Time for Complacency

181 views

Equity markets pressed higher at 8:30am after the US posted stronger than expected NFP data to the wires.  Just after the bell at 10am we have Wholesale Inventories and Trade Sales and at 1:20pm Fed’s Lacker is delivering a speech on his 2015 economic outlook.  We also have two ongoing hostage/terrorist situations in Paris.

Prices are still on the move in the globex market but as we approach cash open we are trading right around yesterday’s high of the session.  We spent the overnight session trading above the mid of yesterday’s big range before taking out the highs on the NFP data.  The two pushes above Thursday’s range have found responsive selling.

Yesterday the market went gap up and started the session above the prior two day’s ranges and half-way into Monday’s range.  Shortly after the open a strong driver came in and pushed the market higher.  Toward the end of the session prices came into balance resulting in a P-shaped profile.  This type of print suggests a short squeeze took place.

In the context of a downtrend, a P-shaped short squeeze profile often occurs at-or-near the end of a counter rotation higher. However our current context is not a downtrend.  Our current context is intermediate term balance and it is comprised of all trade dating back to October 31st, see daily chart below:

01092014_NQDAily

For high level prices to keep in mind, I am sticking with the daily chart and highlighting the key Nasdaq levels below.  Note the three distinct volume distributions separated by two volume pockets.  This is vital information while navigating this big chop.

01092014_NQDAily_levels

Afternoon Levels

87 views

Here are some levels on the Nasdaq to keep in mind this afternoon:

01082015_NQ_VP2

 

Feels Different Today

212 views

Yesterday afternoon we started to see a behavioral shift from the marketplace. The Nasdaq slowed down and flagged about, much like it did last Friday. The violent waves as we explored the southern tip of the charts opened up to a peaceful, calm, quiet pond. Whether this behavior sticks is unknown but the change has so far carried over into Globex. Overnight the Nasdaq traded on the low end of its normal range on normal volume. Prices drifted above yesterday’s cash highs briefly before finding responsive sellers.

Last night the biggest post-earnings price action was seen in SBUX which traded higher after reporting. At 8:30am we had Chicago Fed Activity and it brought some selling in. At 9:45am we have Markit PMI stats set for release. This announcement shortly after the open may induce some early chop. We also have Existing Home Sales and leading indicators at 10am.

Yesterday was the third straight day of advance in the Nasdaq and price action tends to become a bit rocky on the fourth session. However, bulls have done well to negate the intermediate term seller control, pushing us back into a more neutral-to-bullish stance. We are currently trading in the upper pocket of our triple volume distribution, see below:

01232015_NQ_VPnaked

Drilling a bit closer to the action, we can see prices are coming into the lower end of a large balance area above. It makes sense to expect some overhead supply in this region. Given the pocket-nature of our current trade location, we might still see some speed in the market.

Early on, I am expecting a choppy open auction, inside Thursday’s range before buyers make an attempt at the overnight high 4275.25. Not far above there I will be looking for signs of responsive sellers who work us back below Thursday’s close 4266 and choppy-two way action takes hold.

Hypo two is sellers a bit more aggressive on the open, pushing us over the ledge at 4258.25 and sliding us down through most of the afternoon push higher to test it’s starting point down at 4235.

Hypo 3 is strong bulls push up through 4277.75 and begin exploring the upper balance zone.

These levels can be seen below:

NQ_MarketProfile_01232015 01232015_NQ_VP

Now We Wait

186 views

Nasdaq futures are lower as we head toward cash open. The range and volume associated with the move are about as normal as it comes, both falling right in the middle of their respective Gaussian distributions. Price managed to take out yesterday’s cash high 4175.25 for a while but eventually traded lower. Yesterday evening’s big surprise came from NFLX earnings, which propelled the stock much higher in after-hours trade. The Presidential State of The Union had little effect on index price. Just ahead of the 8:30am housing-type data we saw a run-up in prices which has subsequently faded off/traded flat since.

Yesterday we were gap up to start the week (on a Tuesday) and subsequently faded lower for much of the morning. It was only when price attempted to enter the value zone established when combining last Thursday and Friday that we saw a sharp responsive buyer. Their behavior was strong enough that it reversed the auction process in the opposite direction and we ended the day with a Neutral Extreme print.

The Neutral Extreme print carries strong directional conviction, second only to the trend, or, conviction day. Contributing to the validity of this structure was an end-of-day VPOC shift to the high end of the range. Calling the strength into question is cumulative delta, which, could not manage to stay positive.

Heading into today, my expectation is for buyers to push early on to close the overnight gap to 4167.25 then struggle a bit with 4171.50 before working to take out overnight high 4178.50 and targeting 4184.25 where we see sharp responsive selling.

Hypo 2 is sellers on the open work down to take out overnight low 4149 and target 4146 – 4142 where we see responsive selling and then an attempt at filling the overnight gap.

Hypo 3 is a stronger buying drive early on that takes out 4184.75 early on and opens the door to run up the zipper to 4229.75.

Hypo 4 is strong sellers take out 4142.50 and work back down into Tuesday’s lower distribution and target 4127.50.

These levels are on the following charts:

01212015_NQ_VP

NQ_MarketProfile_01212015

State of The Nasdaq

147 views

Nasdaq futures are higher overnight on a slow-grind type session of trade. As we head into cash open sellers are recapturing some of the progress. The gap up to start the week has been a common feature the last several weeks; a common feature which gives way to selling. Whether that continues to be the case this week will be interesting to observe. Range is on the high end of normal for a globex session and volumes are running in the 2nd sigma.

At 10am we have the NAHB Hosing Market Index as well as Fed’s Powell speaking. The housing data may carry an elevated impact on market prices after the weak showing from the Residential Construction industry last week. Several of the premarket earnings came in well. After hours, two of the majors we will hear from are IBM and NFLX. We also have a Presidential State of the Union Address set for 9pm. More housing stats are set for release in the premarket tomorrow.

Prices are trading inside a big area of acceptance currently, the microcomposite VPOC sits right at 4144.50. These high-volume areas tend to produce murky, choppy trading action. On either edge of this value we have volume pockets which are where the greater opportunity for trend-like behavior resides. Overall, the intermediate term timeframe is neutral-to-bearish. See below:

01202015_NQ_VP

Short term we are gap up with some magnets below. Early on my expectation is for sellers to push into the overnight inventory and take us back to the MCVPOC at 4144.50 and continue lower to close the open gap down to 4134.75. I will look for signs of responsive sellers here (responsive relative to the overnight session, initiative relative the Friday) who work toward taking out the overnight high 4168.

Hypo 2 is buyers enter aggressive early and take out overnight high 4168.25 and continue higher to 4184 and possibly trend through that area.

Hypo 3 is sellers close the overnight gap 4134.75 and continue lower to 4120 area. I have highlighted these areas on the following market profile chart:
NQ_MarketProfile_10202015

The Only Way Out Is Work

171 views

Nasdaq futures are lower overnight and as we come into cash open price are hovering just below Thursday’s range. Volume and range remain 2nd sigma elevated as the aftershocks continue to rip though global markets after an unexpected move from the SNB.

We came into the globex session with sellers pushing and the continued to do so into the afternoon and evening yesterday. INTC earnings were inline yesterday but shares still traded lower which may have contributed. Price pressed into the open gap from 10/27 before finding responsive buyers ahead of a closing of the range gap. Buyers pushed up but were unable to reclaim Thursday’s low 4077.75. We then revisited, but did not take out, the globex lows giving the session a weak looking low.

At 8:30am CPI data brought some buyers into the market who again struggled to reclaim Thursday’s lows.

We had Industrial/MFG production numbers out at 9:15am. We also have U of M Confidence at 10am, Fed’s Williams speaking at 11am, and Fed’s Bullard set to speak at 1:10am. The markets are also cruising into a long weekend as they will be closed Monday in observation of MLK.

Yesterday’s session featured sellers continuing to control the action. There was an interesting shelf formation at 4106.75 which served as a pivot for much of the session. Sellers eventually claimed victory of the area. Early on my primary expectation is for buyers to work into this overnight (short) inventory and close the overnight gap to 4089 to target the VPOC at 4095.25. There I am looking for responsive sellers to step in and continue driving lower. A return to the scene of the CPI bounce at 4061 puts us at the overnight midpoint. From there we continue to take out overnight low 4041.50 and close the range gap to 4040 then the full gap to 4033.

Hypo 2 is sellers drive off the open and run into a bit of demand at 4061 but overrun it and go fill the gap at 4040 then 4033 and overshoot to tag the NVPOC at 4028.

Hypo 3 is sellers early who are defended away above 4061 and buyers push the gap fill and retake the shelf pivot at 4106.75 to set up another leg higher.

You can see these price levels below:

01162015_NQ_VP_midday

NQ_MarketProfile_10162015

Strange Overnight Session Merits Caution

172 views

Volume and range shot well beyond second sigma overnight. This is a clear signal that what you are seeing taking place in the markets this morning is anything but normal. The primary driver of this volatility was forex macro moves resulting from an unexpected move by the Swiss National Bank.

Also occurring overnight was a move higher in oil. This morning the markets are dealing with more earnings from big banks who one after another are seeing share prices lose value post earnings. BAC is trading lower as is C although Citi is currently holding its prior lows.

At 8:30am the economic data including initial/continuing jobless claims, PPI, and Empire Manufacturing brought in some buyers who were quickly faded. This afternoon after market close we will here from INTC while the entire semiconductor industry teeters on the edge of a breakdown. We also have many more banks set to report tomorrow morning and CPI before market open.

Turning our attention to the auction, we can see some weak shelving occurring right at 4106.75. This level will be a big tell today. My initial expectation is we ‘spill over’ the shelf which opens the door for a test of the overnight lows which puts us in range of testing the prior swing lows and the Nasdaq on the cusp of breaking lower. See the context below:

NQ_MarketProfile_10152015

The intermediate term shows sellers controlling the market.

Yesterday the market continued trading lower until we closed to open gap from 01/06. Once we hit these levels a sharp buying response took hold and saw some continuation off the value zone around 4118.75. Buyers were unable to push through the early highs of the session during the afternoon ramp but did see their progress carry through into the overnight session.

The overnight session carried over 100 points of range and as we approach cash open we are trading right near the midpoint of that range. Early on I am looking the yesterday’s VPOC at 4138 as a short term pivot. If sellers can sustain trade below this level that adds confidence to my primary expectation for trade to take out the market profile shelf at 4106.75 (seen above).

Hypothesis 2 is strong buyers off the open who take out yesterday’s session high 4159 and continue probing higher into the volume pocket at 4171.50 and a continued auction higher to target overnight high 4190.

Hypo 3 is a slow open auction inside yesterday’s range and then 2-way chop between 4171.50 and 4118 which eventually gives way lower during the lunch hour.

I have highlighted these levels on the following volume profile chart:

01152015_NQ_VP

Working With The Pro Gap

156 views

Nasdaq volume and range went 2nd sigma overnight as the index traded lower for much of the session. As we approach cash open prices are below Tuesday’s range and we are in a “pro gap” type environment. The selling accelerated at 8:30am when weaker-than-expected Advance Retail Sales data hit the wires. We also had an corrective-type event in copper prices, the Japanese Yen is very active, and JPM missed earnings. WFC is trading lower premarket as well after reporting earnings.

Today we have crude oil inventory stats out at 10:30am. The weekly report is likely to be closely followed by all speculators as the commodity continues to correct lower. We also have Business Inventories at 10am and the Fed Beige Book at 2pm. Premarket tomorrow we will hear Continuing/Initial job claims and also earnings from BAC and C.

Yesterday prices opened gap up and we had an opening drive higher. After a strong first hour of trade buyers pushed us above the IB and we unable to test Friday’s high. The lack of order flow above the high was ominous and we quickly fell back to the daily mid. From there buyers were unable to defend and we gave back the entire opening drive and then some in a large impulse-type move. The overall print was a neutral print, perhaps barely able to classify as a neutral extreme.

The overnight session looks like a completion of the impulse wave. Early on my expectation is for buyers to push into the overnight short inventory and test Tuesday’s session low 4126.75 and likely push into the range a bit up to the LVN at 4138. From there I expect responsive sellers will step in and continue pressing lower to close the open gap at 4102.25 and test recent swing low 4082.

Hypo 2 is an open drive down. The risk of a drive is elevated given the recent price action on open and how we are out of balance to start the day. Drive down looks to test recent swing low 4082 early and push through to test 4069 then 4053.

Hypo 3 is a stronger than expected open which takes out the LVN at 4038 and sustains trade above it. This type of action likely builds into a full gap fill up to 4158.75.

These levels are highlighted on the following profile charts:

01142015_NQ_VP

NQ_MarketProfile_10142015

The Long Liquidation Strike

167 views

Nasdaq futures are trading higher on the globex session. The buyers stepped in around 3am after defending the value area low of Monday’s cash session. Range overall on the globex session is on the high end of normal [1st sig] as is volume. Oil is trading up into the open and we saw a positive earnings reaction from KB home this morning.

At 10am we have JOLTS, a low impact event. 2pm Monthly budget statement, and 5pm we have Fed speak from Kocherlakota. Tomorrow premarket we have WFC & JPM earnings and also Advance Retail sales, Fed’s Plosser, and MBA Mortgage applications.

The main feature of yesterday’s action that had me constructive was the b-shape of the market profile. This suggested a short term phenomenon known as a long liquidation. An early entrant pressured the market lower which forced longs into liquidating. Once that business was complete the market balanced and showed decent signs of excess(tails). You cannot see the tails as clearly, but the b-shape is quite evident on an old school MP:

NQ_MarketProfile_10132015

Primary hypo is a 2-way open auction with big chop where sellers push into overnight inventory and test down to 4180 area. If no buyers than test down to 4176 area before we work higher to test Monday session high 4218.50

Hypo 2 is for buyers to thrust early and run us up the zipper and test Monday’s HOD 4218.50. Just above around 4224.25 I will look for signs of responsive sellers.

Hypo 3 responsive sellers reject the overnight move and sustain trade back inside the b-shape, below 4176. Then we test through to 4160 area and continue probing lower.

These levels are highlighted on the following volume profile chart:

01132015_NQ_VP

OPEX Context

173 views

So far we have seen interesting globex action to start the week off. The Nasdaq traded inside of Friday’s wide range and held the low end of value before seeing a strong rotation higher. The move merited splitting the profile in half to see a clearer picture of the auction.

Before thrusting higher the market spent a considerable amount of time linger on those lows and from price action alone it looks like a weak low. However, from the profile view the volume distribution is decent. The globex high however seems a bit weaker.

The early battle ground is right near the 4200 century market. It will likely serve as an early pivot for the session. I have noted this zone on the following market profile chart:

NQ_MarketProfile_10122015live

We have Fed’s Lockhart speaking on US Economic Outlook at 12:40pm down in Atlanta. He is a voting member of the FOMC and may shake this market up a bit. This week is also monthly option expiration so we may see some big intraday waves, something to keep in mind.

Primary hypo for today is open auction in range, sellers work to close the overnight gap to 4201.50 and we see if this level attracts responsive buyers who then work toward overnight high 4227.50, then target MCHVN 4233.25 and potentially probe the upper pocket at 4240.50.

Hypo 2 is sellers capture the 4200 pivot then look to take out overnight low 4195 and test the LVN at 4193. Losing this level opens us up to retest Friday low 4181 which puts us in gap territory. Range gap fill is 4163.25 full gap fill is 4152.

Hypo 3 is drive higher, take out poor-looking overnight high and work up to test Friday session high 4248.50 and then test up to 4260 area.

These price levels are all highlighted on the following volume profile chart:

01122015_NQ_VP2

Now Is No Time for Complacency

181 views

Equity markets pressed higher at 8:30am after the US posted stronger than expected NFP data to the wires.  Just after the bell at 10am we have Wholesale Inventories and Trade Sales and at 1:20pm Fed’s Lacker is delivering a speech on his 2015 economic outlook.  We also have two ongoing hostage/terrorist situations in Paris.

Prices are still on the move in the globex market but as we approach cash open we are trading right around yesterday’s high of the session.  We spent the overnight session trading above the mid of yesterday’s big range before taking out the highs on the NFP data.  The two pushes above Thursday’s range have found responsive selling.

Yesterday the market went gap up and started the session above the prior two day’s ranges and half-way into Monday’s range.  Shortly after the open a strong driver came in and pushed the market higher.  Toward the end of the session prices came into balance resulting in a P-shaped profile.  This type of print suggests a short squeeze took place.

In the context of a downtrend, a P-shaped short squeeze profile often occurs at-or-near the end of a counter rotation higher. However our current context is not a downtrend.  Our current context is intermediate term balance and it is comprised of all trade dating back to October 31st, see daily chart below:

01092014_NQDAily

For high level prices to keep in mind, I am sticking with the daily chart and highlighting the key Nasdaq levels below.  Note the three distinct volume distributions separated by two volume pockets.  This is vital information while navigating this big chop.

01092014_NQDAily_levels

Afternoon Levels

87 views

Here are some levels on the Nasdaq to keep in mind this afternoon:

01082015_NQ_VP2

 

Previous Posts by Raul3