Nasdaq futures have been chopping about on normal volume overnight as we head into Friday’s trade. The NYC Ebola case was confirmed and the equity index is demonstrating sensitivity to the news. We have New Home Sales data coming out at 10am and an otherwise quiet economic calendar. Some news about ECB bank stress tests is hitting the wires are we approach cash trade and it is causing a bit of a stir in the futures.
Shifting attention away from the daily bar chart, let’s look at the monthly volume profile print. A quick note on the daily bar chart (not pictured) is we have seen signs of responsive selling both Wednesday and yesterday. Whether they can convert to imitative selling is the question on my mind today. Back to the monthly volume profile, we can see price testing the uppermost value threshold we printed during September. My initial expectation is for participants to reject this value area, however if they cannot then a test of the VPOC then the other side become likely. See below:
Yesterday’s profile print was quite the odd shape. It had the marquee P-shaped short squeeze look for most of the session, then we popped out of it to the upside. At this point a well-timed Ebola case hit the wires and we saw a sharp responsive sale. The result is a thin tailed balance of sorts which we are set to open inside of. We have left behind 4 NVPOCs and 2 open gaps on this move up, we are seeing signs of responsive sellers, and the week is coming to a close. My primary expectation is for a choppy session with a downward bias as profit taking into the weekend causes sell flow. I have highlighted the key levels I will be observing on the following volume profile mash up chart: