Equity futures are flat overnight after a quiet session of digesting yesterday’s move. As we approach US trade the CPI stats are out and roughly in line while some traders may have expected a bit softer of a number. This is lending a bit of strength to the US dollar early on and the initial reaction in Nasdaq futures is muted. Buyers managed to extend yesterday’s progress a bit during the globex session before finding responsive sellers who neutralized the session.
Below is a daily chart of the Nasdaq futures where we can see just how sharp of a rejection buyers created with their response to the discounted prices. I noted the midpoint of the down move yesterday which is at 3902.375 and I combined that with the midpoint of the current up move (which is still in development) at 3832 to highlight a broad ‘pivot’ area. Whoever controls this zone has an opportunity to control the long term timeframe. There is also a very well defined LVN above current prices as we press into the scene of the breakdown. My expectation is for the market to find responsive sellers at some point today:
If you look at the nearest profile to the left of our current prices, you can see our ‘template day’ or the day we are trading relative to is thin north of 3979 until about 4014. If this was our only observation we might consider the risk of a fast slide up this zone. However, there is a larger balance in play up here. It is the red and green micro composite on the left side of the screen. It tells the story regarding the last auction we held at these prices. I have carefully selected the price levels I will be observing as we enter this zone (and beyond) on the following volume profile mash up chart: