NASDAQ futures are coming into Wednesday gap down after an overnight session featuring elevated range and volume. Price briefly poked above the Tuesday RTH high before balancing out below the Tuesday midpoint.
On the economic agenda today we have existing home sales at 10am, crude oil inventories at 10:30am, and most importantly an FOMC rate decision at 2pm followed by a Jerome Powell conference at 2:30pm.
Traders down at the CME are currently pricing a 97.2% probability of a 25 basis point rate hike today.
Yesterday we printed a neutral day. The day began gap down and sellers quickly filled the overnight gap before stalling out. We then went range extension down, then responsive buyers stepped in. Late in the session we went range extension up, putting us neutral.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 6917.75. From here we continue higher, up through overnight high 6923.50 before settling into two-way trade. Look for the third reaction after the fed rate decision to dictate direction into the rest of the day.
Hypo 2 sellers press down through overnight low 6881.50 setting up a move to target 6835 before two way trade ensues. Look for the third reaction after the fed rate decision to dictate direction into the rest of the day.
Hypo 3 stronger buyers sustain trade above 6933.75 triggering a rally up to 6963.25 ahead of the FOMC minutes. Look for the third reaction after the fed rate decision to dictate direction into the rest of the day.
Volume profiles, gaps, and measured moves:
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