A Shelf and Pole for Friday

274 views

Today marks the fifth statistically normal session of globex trade in the Nasdaq. The action was balanced overnight until we saw buying pressure pick up at the 8:30am mark. As we head into cash open price is pushing above yesterday’s high and up into the contextual pole—a market profile feature.

The economic calendar is quiet to end the week. The University of Michigan will provide us a final read of Confidence for July at 10am and Baker Hughes will tell us how many rigs they counted at 1pm.

Yesterday we printed a double distribution trend day up. This day-type has tons of directional conviction but not as much as a full-on trend day. It started with a gap down and sellers proceeded to take out Wednesday’s low before finding responsive buyers at value area high from 7/27. Buyers became initiative late in the morning and continued to take risk throughout the session.

Intermediate term we’ve bounced off the check-back to the breakout. Their challenge is sustaining this strength and not succumbing to a push back below the breakout area around 4500. Keep an eye on Nasdaq transports too because they’re back at range high—a place where I expect sellers to defend. Finally bear in mind that Monday is a new month. New months that start on Monday are statistically bullish.

Heading into today my primary expectation is for early action to give way to quiet summer trade. I will look for buyers to press the pole climb up to target 4631.75 before 2-way trade ensues.

Hypo 2 deals with the shelf built at 4588. If sellers push down through it, look for a move to take out overnight low 4583.25 and a test of the value area high at 4570.

Hypo 3 is a full on barn burner to recapture the Apple gap down (7/21) up to 4668.25.

Levels:
07312015_NQ_VP

Morning Data Dump Brings in Sellers

219 views

Nasdaq futures are lower heading into Thursday. The overnight session featured balanced price action with all trade occurring inside the range set yesterday. The overnight action reads normal, and heading into cash open we are seeing selling pressure.

At 8:30am we had an economic data dump which included 2ndquarter annualized GDP stats, Personal Consumption figures, and Initial/Continuing jobless claims. The GDP data was lower than expected and showed a bit of inflation. Personal Consumption is on the rise, and jobless claims were mixed. The initial reaction to the news was selling.

Yesterday the market printed a normal variation up day while we heard the latest rate decision from the FOMC. Buyers managed to press nearly halfway up last Friday’s liquidation range before stalling out. The session print has a somewhat blunt looking high (poor high) and a relatively clean looking low (such taper!).

Intermediate term location shows price coming back to the scene of the original breakout—an action referred to as a check back by traders. The idea behind the check back is to test the conviction of the breakout by seeing if a revisit to the prices entices buyers to buck up and bid.

Heading into today, my primary expectation is for sellers to work down through the overnight low 4556.50. Look for buyers to defend around the 4550 region and two-way trade to ensue with a slight upward bias.

Hypo 2 sellers push down through 4450 setting up a test down to 4534.25. If buyers no show here then we continue pushing lower to test our recent value low area 4516 – 4505.25.

Hypo 3 buyers push up through overnight high 4577.75 setting up a run to 4600.

Levels:07302015_NQ_VP

Nasdaq Levels for FOMC Rate Decision Day

226 views

Nasdaq futures are a touch higher as we head into Wednesday’s trade. The action overnight was balanced with a slight upward bias. Price managed to go above yesterday’s high and into the lower quadrant of last Friday’s range before sellers showed up. Range and volume were normal on the session.

The big economic event today is the 2pm FOMC rate decision. No one expects them to raise the benchmark short-term interest rate for the first time since 2006. We had MBA Mortgage Apps data at 7am and selling has come into the tape since. We also have Pending Home Sales at 10am and oil/gas inventories at 10:30am.

Yesterday we printed a double distribution trend day after starting the session under selling pressure. Price briefly took out Monday’s low before finding a strong responsive bid.   The interesting trait left behind is a low VPOC—down at 4510. It means value might be lower than where price is currently trading.

Heading into today, my primary expectation is sellers push into the overnight inventory to close the gap down to 4556.75 and continue to target the overnight low 4548.50. Look for responsive buyers at 4544 then again at 4534. Then two-way trade as we wait for the afternoon FOMC minutes.

Hypo 2 buyers push up and sustain trade above Friday’s close 4563.75 setting up a run to target the overnight high 4572.75. The profile overhead is thin meaning we could see price rally well if this occurs. Look for sellers around the 4600 mark.

Hypo 3 tight trading between 4570 and 4550 until we see the FOMC minutes.

Levels:

07292015_NQ_VP

One Way or Another We Fill All Open Gaps

330 views

Nasdaq futures are gap up heading into Tuesday after a globex session featuring elevated range on normal volume. Price managed to push up into last Friday’s range slightly and consolidate in the low-end of last week’s range.

Coming up on the economic docket we have Case-Shiller Composite 20 at 9am, Markit Composite PMI at 9:45am, and Consumer Confidence at 10am. Investors are also likely looking forward to tomorrow’s FOMC rate decision tomorrow afternoon.

Yesterday we started the week gap down and soon after the open we found responsive buyers. Price managed to “check back” to the scene of last week’s breakout before finding the buyers who pushed but struggled to reclaim last Friday’s range. We spent the rest of the session slow grinding lower to ultimately go neutral.

Heading into today, my primary expectation is for sellers to push into the overnight inventory to close the gap down to 4523. From there I will look for sellers to continue lower to take out the overnight low 4515 and target the 4500 century mark. Look for buyers to defend here.

Hypo 2 sellers struggle to close the overnight gap and we push up above the overnight high 4549.25 . Look for some churn around 4553 before continuing higher to close last Friday’s gap up at 4563.75.

Hypo 3 is sellers push down through 4500 to close the open gap from 7/13 down at 4487.50.

Levels:07282015_NQ_VP

Pro Gap Down into a Busy Month End Week

274 views

We’re kicking off the week pro gap down after the Nasdaq spent most of the globex session trending lower. Range and volume running hot and as we head into cash open price are hovering inside the 7/16 range.

At 8:30am Durable Goods Orders data came out better-than-expected and the reaction so far has been muted. Overall we have stabilized slightly over the last hour. Coming up today we have Dallas Fed Manufacturing Activity but an otherwise empty economic docket. Keep in mind however Wednesday’s FOMC rate decision which is likely to be a high impact event. We are still pushing through earnings season too, but no major Nasdaq components are set to report today.

Last week we started strong only to end weak after Apple earnings disappointed investors Tuesday afternoon. Afterwards we went gap down Wednesday and churned around before ultimately trending lower Friday.

The overnight action pushed us down to close a 2nd of the 5 gaps left behind during our most recent rally. The Nasdaq has been methodical about closing open gaps. With three remaining to the downside and now 2 open gaps to the upside, it’s hard to have strong directional conviction.

Heading into today my primary expectation is for sellers to push right off the opening bell to target 4512.25. From there I’ll look for responsive buyers who work into the overnight inventory. Look for a half gap fill up to around 4543 then 2-way trade to ensue.

Hypo 2 gap and go lower. Push down through 4510 to target the 4500 century mark.

Hypo 3 open rejection reversal where buyers immediately step in and push aggressively higher, up through 4543 to set up a full gap fill up to 4563.75.

Levels:
07272015_NQ_VP

Buyers Giving Up Their Overnight Edge

274 views

Nasdaq futures are a touch higher as we head into Thursday’s trade. We spent most of the session building value higher but sellers managed to defend yesterday’s range high.

At 8:30am initial/continuing jobless claims came in better than expected. There was little reaction to the news. We also have leading Index at 10am and natural gas storage data at 10:30am.

Yesterday we printed a normal day. Normal days are characterized as having a wide initial balance (first hour of trade) that is not breached for the remainder of the session. These day types are usually formed when a news item is released near the open. In yesterday’s trade, for example, investors were digesting the earnings from Apple. This day type shows other time frame (OTF) activity at the open but then no initiative-type OTF for the rest of the session, just local-to-local trade.

The action did manage to close the 7/16 open gap, meaning there are only 4 open gaps left below.

Heading into today, my primary expectation is for sellers to push in to the overnight inventory and close the gap down to 4618.25. From here the overnight low becomes a target 4617 then a push down to test value area low zone 4608.50 to 4606.

Hypo 2 buyers sustain trade north of the key pivot at 4623 setting up a ‘pole climb’ up to 4660 and seek to target the Apple gap up at 4668.25.

Hypo 3 sellers push down through 4605 setting up a liquidation down through the air pocket to 4584.

Levels:07232015_NQ_VP

 

Air Is Thin Down Here

288 views

Nasdaq futures are pro gap down as we head into cash open. The move began shortly after Apple earnings were released and is continuing lower as the morning kicks in. Range is abnormal but volume metrics are in line. We are trading right around the gap left open back on 7/16.

At 10am we have Existing Home Sales and at 10:30am crude/gas/distillate inventories. Texas Instruments reports earnings after the bell and will be a key driver behind a the PHLX Semiconductor Index which is threatening a rollover at a major support level.

Yesterday the Nasdaq opened flat and proceeded to range extend down before quickly finding a big and two-way balanced trade ensued. The market appeared to be waiting for Apple earnings before deciding its next move.

Intermediate term, we are trading down into a confluence of prices around 4600 but the market profile is quite thin until down around 4580 range.

Heading into today, my primary expectation is for buyers to push into the overnight inventory and work the gap fill. If buyers can trade north of 4622 then look for a pole climb to ensue all the way back up to close the overnight gap up to 4668.25.

Hypo 2 is a gap-and-go down type open. Look for sellers to press into the cash market early on and trade down to 4584. Look for responsive buying here and two way trade to ensue south of 4607.

Hypo 3 half gap fill up to 4634 then roll back over to take out overnight low 4597.75.

Levels:

07222015_NQ_VP

WATCH THE LEDGE

352 views

Nasdaq futures are up a touch overnight as overnight volatility continues to abate. Volume and range are low-end normal on a balanced session of 2-way trade. The action was contained within yesterday’s range.

The economic calendar is empty again this morning. The market will be tasked with digesting weak trade in IBM after their earnings fell short of investor expectations. More importantly we have Apple reporting earnings after the bell.

Yesterday sellers managed to close the overnight gap early on before initiative buyers stepped back in and continued pushing higher. The action was unidirectional for long stretches of time, but still manages to resemble a normal variation on the market profile. Selling was seen late in the session but was contained above the sessions IB.

Looking out a bit further, we can clearly see a ledge of volume formed at 4650. Keep this level in mind going forward. It can tell us two things—if sellers are unable to push us over the abnormal outcropping then bulls are incredibly strong. Otherwise, and more likely, we tip over the ledge which is likely to trigger some liquidation due to the air pocket structure below it.

Heading into today, my primary expectation is for the market to enter ‘wait-and-see’ mode. Look for two way trade with some profit taking. Look for the overnight low to be taken out 4667.50 setting up a test of 4660. Responsive buyers in this area but they’re contained south of swing high 4686.

Hypo 2 sellers push down through 4660 setting up a move toward the ledge at 4650. If they can push over it, then look for liquidation down to the LVN at 4640.

Hypo 3 buyers push up through overnight high 4683 to continue higher. Look for a move to the ATR target high 4708.50.

Levels:

07212015_NQ_VP

Navigating The Highlands

292 views

Nasdaq futures continue to drift higher as we head into a fresh week. Volume was light but normal overnight on a session that featured little rotation on its continued ascent to new highs.

This week the economic calendar is somewhat quiet, and today we have no economic releases. Morgan Stanley is up pre-market after reporting earnings.

Last week was spent pushing higher, aggressively at times, and looking for sellers. They were nowhere to be found. As a result the pushed through the upper bound of our recent range to break out. The other majors (S&P, DOW, Russell) lagged behind a bit and are still inside their respective ranges.

Whenever we take out a major level, I like to pull up a long term chart of the Nasdaq composite to see where we are trading. This is the equivalent of pulling out the national interstate map when you cross a state line. As you can see, we are up in blue skies where theoretically anyone who ever invested in the Nasdaq is profitable. Also notice, last week was the first time we closed above the all-time high set back in 2000:

07202015_COMPQ

Heading into today, my primary expectation is for price to continue drift higher. I don’t do much up at these prices. We’ve exceeded my measured move targets.

Hypo 2 is seller push into the overnight inventory and close the weekly gap down to 4651.25. Look for sellers to target the overnight low 4646.50. From here look for buyers to defend 4639, otherwise a test down to the LVN at 4627.75.

Levels: 07202015_NQ_VP

NASDAQ To New Contract High Overnight

286 views

Nasdaq futures are higher overnight on a session featuring normal volume and range, but a session that spent the duration trending higher. The action has pushed price to new contract high.

Initial/Continuing claims data came in a bit better than expected this morning and received little-to-no reaction then a delayed buy. The economic calendar is loaded this morning. Investors will most closely be observing day two of Yellen in Washington—today delivering a testimonial to the Senate Banking Panel. Also on the docket is Philadelphia Fed at 10am, NAHB Housing Index at 10am, and Net Long-term TIC Flows at 4pm.

Yesterday we opened gap up for the 4th day in a row. Price churned about while investors listened to Yellen testify to the House. Late in the morning we went range extension up but quickly fell back into IB setting up ripe conditions for a gap fill. Sellers pushed the overnight gap shut and overshot the gap while putting us neutral. Responsive buyers pushed us back up toward session high to end the day.

Intermediate term we are back at bracket high. Short term memory says look for sellers to defend here and whack us back through the range. To expect anything different would be to ignore recent history. The caveat is our current velocity. When we come into a key reference point at high speed, you expect to see the rejection/reversal happen quickly. Otherwise it’s likely we continue through it.

Heading into today, my primary expectation is for sellers to push down into the overnight inventory to close the overnight gap down to 4537.25. From there I’ll look for a continued push to 4530 where we see responsive buying a two way trade take hold.

Hypo 2 is we sustain trade up at new contract high and go hunting for buy stops. Measured move targets are 4578.75 and 4594.75.

Hypo 3 is liquidation. Sellers reject a new contract high harshly, push down fast to 4530 where buyers mount a weak defense but are ultimately overrun. Look for continuation down to 4515.

Levels:

07162015_NQ_VP

A Shelf and Pole for Friday

274 views

Today marks the fifth statistically normal session of globex trade in the Nasdaq. The action was balanced overnight until we saw buying pressure pick up at the 8:30am mark. As we head into cash open price is pushing above yesterday’s high and up into the contextual pole—a market profile feature.

The economic calendar is quiet to end the week. The University of Michigan will provide us a final read of Confidence for July at 10am and Baker Hughes will tell us how many rigs they counted at 1pm.

Yesterday we printed a double distribution trend day up. This day-type has tons of directional conviction but not as much as a full-on trend day. It started with a gap down and sellers proceeded to take out Wednesday’s low before finding responsive buyers at value area high from 7/27. Buyers became initiative late in the morning and continued to take risk throughout the session.

Intermediate term we’ve bounced off the check-back to the breakout. Their challenge is sustaining this strength and not succumbing to a push back below the breakout area around 4500. Keep an eye on Nasdaq transports too because they’re back at range high—a place where I expect sellers to defend. Finally bear in mind that Monday is a new month. New months that start on Monday are statistically bullish.

Heading into today my primary expectation is for early action to give way to quiet summer trade. I will look for buyers to press the pole climb up to target 4631.75 before 2-way trade ensues.

Hypo 2 deals with the shelf built at 4588. If sellers push down through it, look for a move to take out overnight low 4583.25 and a test of the value area high at 4570.

Hypo 3 is a full on barn burner to recapture the Apple gap down (7/21) up to 4668.25.

Levels:
07312015_NQ_VP

Morning Data Dump Brings in Sellers

219 views

Nasdaq futures are lower heading into Thursday. The overnight session featured balanced price action with all trade occurring inside the range set yesterday. The overnight action reads normal, and heading into cash open we are seeing selling pressure.

At 8:30am we had an economic data dump which included 2ndquarter annualized GDP stats, Personal Consumption figures, and Initial/Continuing jobless claims. The GDP data was lower than expected and showed a bit of inflation. Personal Consumption is on the rise, and jobless claims were mixed. The initial reaction to the news was selling.

Yesterday the market printed a normal variation up day while we heard the latest rate decision from the FOMC. Buyers managed to press nearly halfway up last Friday’s liquidation range before stalling out. The session print has a somewhat blunt looking high (poor high) and a relatively clean looking low (such taper!).

Intermediate term location shows price coming back to the scene of the original breakout—an action referred to as a check back by traders. The idea behind the check back is to test the conviction of the breakout by seeing if a revisit to the prices entices buyers to buck up and bid.

Heading into today, my primary expectation is for sellers to work down through the overnight low 4556.50. Look for buyers to defend around the 4550 region and two-way trade to ensue with a slight upward bias.

Hypo 2 sellers push down through 4450 setting up a test down to 4534.25. If buyers no show here then we continue pushing lower to test our recent value low area 4516 – 4505.25.

Hypo 3 buyers push up through overnight high 4577.75 setting up a run to 4600.

Levels:07302015_NQ_VP

Nasdaq Levels for FOMC Rate Decision Day

226 views

Nasdaq futures are a touch higher as we head into Wednesday’s trade. The action overnight was balanced with a slight upward bias. Price managed to go above yesterday’s high and into the lower quadrant of last Friday’s range before sellers showed up. Range and volume were normal on the session.

The big economic event today is the 2pm FOMC rate decision. No one expects them to raise the benchmark short-term interest rate for the first time since 2006. We had MBA Mortgage Apps data at 7am and selling has come into the tape since. We also have Pending Home Sales at 10am and oil/gas inventories at 10:30am.

Yesterday we printed a double distribution trend day after starting the session under selling pressure. Price briefly took out Monday’s low before finding a strong responsive bid.   The interesting trait left behind is a low VPOC—down at 4510. It means value might be lower than where price is currently trading.

Heading into today, my primary expectation is sellers push into the overnight inventory to close the gap down to 4556.75 and continue to target the overnight low 4548.50. Look for responsive buyers at 4544 then again at 4534. Then two-way trade as we wait for the afternoon FOMC minutes.

Hypo 2 buyers push up and sustain trade above Friday’s close 4563.75 setting up a run to target the overnight high 4572.75. The profile overhead is thin meaning we could see price rally well if this occurs. Look for sellers around the 4600 mark.

Hypo 3 tight trading between 4570 and 4550 until we see the FOMC minutes.

Levels:

07292015_NQ_VP

One Way or Another We Fill All Open Gaps

330 views

Nasdaq futures are gap up heading into Tuesday after a globex session featuring elevated range on normal volume. Price managed to push up into last Friday’s range slightly and consolidate in the low-end of last week’s range.

Coming up on the economic docket we have Case-Shiller Composite 20 at 9am, Markit Composite PMI at 9:45am, and Consumer Confidence at 10am. Investors are also likely looking forward to tomorrow’s FOMC rate decision tomorrow afternoon.

Yesterday we started the week gap down and soon after the open we found responsive buyers. Price managed to “check back” to the scene of last week’s breakout before finding the buyers who pushed but struggled to reclaim last Friday’s range. We spent the rest of the session slow grinding lower to ultimately go neutral.

Heading into today, my primary expectation is for sellers to push into the overnight inventory to close the gap down to 4523. From there I will look for sellers to continue lower to take out the overnight low 4515 and target the 4500 century mark. Look for buyers to defend here.

Hypo 2 sellers struggle to close the overnight gap and we push up above the overnight high 4549.25 . Look for some churn around 4553 before continuing higher to close last Friday’s gap up at 4563.75.

Hypo 3 is sellers push down through 4500 to close the open gap from 7/13 down at 4487.50.

Levels:07282015_NQ_VP

Pro Gap Down into a Busy Month End Week

274 views

We’re kicking off the week pro gap down after the Nasdaq spent most of the globex session trending lower. Range and volume running hot and as we head into cash open price are hovering inside the 7/16 range.

At 8:30am Durable Goods Orders data came out better-than-expected and the reaction so far has been muted. Overall we have stabilized slightly over the last hour. Coming up today we have Dallas Fed Manufacturing Activity but an otherwise empty economic docket. Keep in mind however Wednesday’s FOMC rate decision which is likely to be a high impact event. We are still pushing through earnings season too, but no major Nasdaq components are set to report today.

Last week we started strong only to end weak after Apple earnings disappointed investors Tuesday afternoon. Afterwards we went gap down Wednesday and churned around before ultimately trending lower Friday.

The overnight action pushed us down to close a 2nd of the 5 gaps left behind during our most recent rally. The Nasdaq has been methodical about closing open gaps. With three remaining to the downside and now 2 open gaps to the upside, it’s hard to have strong directional conviction.

Heading into today my primary expectation is for sellers to push right off the opening bell to target 4512.25. From there I’ll look for responsive buyers who work into the overnight inventory. Look for a half gap fill up to around 4543 then 2-way trade to ensue.

Hypo 2 gap and go lower. Push down through 4510 to target the 4500 century mark.

Hypo 3 open rejection reversal where buyers immediately step in and push aggressively higher, up through 4543 to set up a full gap fill up to 4563.75.

Levels:
07272015_NQ_VP

Buyers Giving Up Their Overnight Edge

274 views

Nasdaq futures are a touch higher as we head into Thursday’s trade. We spent most of the session building value higher but sellers managed to defend yesterday’s range high.

At 8:30am initial/continuing jobless claims came in better than expected. There was little reaction to the news. We also have leading Index at 10am and natural gas storage data at 10:30am.

Yesterday we printed a normal day. Normal days are characterized as having a wide initial balance (first hour of trade) that is not breached for the remainder of the session. These day types are usually formed when a news item is released near the open. In yesterday’s trade, for example, investors were digesting the earnings from Apple. This day type shows other time frame (OTF) activity at the open but then no initiative-type OTF for the rest of the session, just local-to-local trade.

The action did manage to close the 7/16 open gap, meaning there are only 4 open gaps left below.

Heading into today, my primary expectation is for sellers to push in to the overnight inventory and close the gap down to 4618.25. From here the overnight low becomes a target 4617 then a push down to test value area low zone 4608.50 to 4606.

Hypo 2 buyers sustain trade north of the key pivot at 4623 setting up a ‘pole climb’ up to 4660 and seek to target the Apple gap up at 4668.25.

Hypo 3 sellers push down through 4605 setting up a liquidation down through the air pocket to 4584.

Levels:07232015_NQ_VP

 

Air Is Thin Down Here

288 views

Nasdaq futures are pro gap down as we head into cash open. The move began shortly after Apple earnings were released and is continuing lower as the morning kicks in. Range is abnormal but volume metrics are in line. We are trading right around the gap left open back on 7/16.

At 10am we have Existing Home Sales and at 10:30am crude/gas/distillate inventories. Texas Instruments reports earnings after the bell and will be a key driver behind a the PHLX Semiconductor Index which is threatening a rollover at a major support level.

Yesterday the Nasdaq opened flat and proceeded to range extend down before quickly finding a big and two-way balanced trade ensued. The market appeared to be waiting for Apple earnings before deciding its next move.

Intermediate term, we are trading down into a confluence of prices around 4600 but the market profile is quite thin until down around 4580 range.

Heading into today, my primary expectation is for buyers to push into the overnight inventory and work the gap fill. If buyers can trade north of 4622 then look for a pole climb to ensue all the way back up to close the overnight gap up to 4668.25.

Hypo 2 is a gap-and-go down type open. Look for sellers to press into the cash market early on and trade down to 4584. Look for responsive buying here and two way trade to ensue south of 4607.

Hypo 3 half gap fill up to 4634 then roll back over to take out overnight low 4597.75.

Levels:

07222015_NQ_VP

WATCH THE LEDGE

352 views

Nasdaq futures are up a touch overnight as overnight volatility continues to abate. Volume and range are low-end normal on a balanced session of 2-way trade. The action was contained within yesterday’s range.

The economic calendar is empty again this morning. The market will be tasked with digesting weak trade in IBM after their earnings fell short of investor expectations. More importantly we have Apple reporting earnings after the bell.

Yesterday sellers managed to close the overnight gap early on before initiative buyers stepped back in and continued pushing higher. The action was unidirectional for long stretches of time, but still manages to resemble a normal variation on the market profile. Selling was seen late in the session but was contained above the sessions IB.

Looking out a bit further, we can clearly see a ledge of volume formed at 4650. Keep this level in mind going forward. It can tell us two things—if sellers are unable to push us over the abnormal outcropping then bulls are incredibly strong. Otherwise, and more likely, we tip over the ledge which is likely to trigger some liquidation due to the air pocket structure below it.

Heading into today, my primary expectation is for the market to enter ‘wait-and-see’ mode. Look for two way trade with some profit taking. Look for the overnight low to be taken out 4667.50 setting up a test of 4660. Responsive buyers in this area but they’re contained south of swing high 4686.

Hypo 2 sellers push down through 4660 setting up a move toward the ledge at 4650. If they can push over it, then look for liquidation down to the LVN at 4640.

Hypo 3 buyers push up through overnight high 4683 to continue higher. Look for a move to the ATR target high 4708.50.

Levels:

07212015_NQ_VP

Navigating The Highlands

292 views

Nasdaq futures continue to drift higher as we head into a fresh week. Volume was light but normal overnight on a session that featured little rotation on its continued ascent to new highs.

This week the economic calendar is somewhat quiet, and today we have no economic releases. Morgan Stanley is up pre-market after reporting earnings.

Last week was spent pushing higher, aggressively at times, and looking for sellers. They were nowhere to be found. As a result the pushed through the upper bound of our recent range to break out. The other majors (S&P, DOW, Russell) lagged behind a bit and are still inside their respective ranges.

Whenever we take out a major level, I like to pull up a long term chart of the Nasdaq composite to see where we are trading. This is the equivalent of pulling out the national interstate map when you cross a state line. As you can see, we are up in blue skies where theoretically anyone who ever invested in the Nasdaq is profitable. Also notice, last week was the first time we closed above the all-time high set back in 2000:

07202015_COMPQ

Heading into today, my primary expectation is for price to continue drift higher. I don’t do much up at these prices. We’ve exceeded my measured move targets.

Hypo 2 is seller push into the overnight inventory and close the weekly gap down to 4651.25. Look for sellers to target the overnight low 4646.50. From here look for buyers to defend 4639, otherwise a test down to the LVN at 4627.75.

Levels: 07202015_NQ_VP

NASDAQ To New Contract High Overnight

286 views

Nasdaq futures are higher overnight on a session featuring normal volume and range, but a session that spent the duration trending higher. The action has pushed price to new contract high.

Initial/Continuing claims data came in a bit better than expected this morning and received little-to-no reaction then a delayed buy. The economic calendar is loaded this morning. Investors will most closely be observing day two of Yellen in Washington—today delivering a testimonial to the Senate Banking Panel. Also on the docket is Philadelphia Fed at 10am, NAHB Housing Index at 10am, and Net Long-term TIC Flows at 4pm.

Yesterday we opened gap up for the 4th day in a row. Price churned about while investors listened to Yellen testify to the House. Late in the morning we went range extension up but quickly fell back into IB setting up ripe conditions for a gap fill. Sellers pushed the overnight gap shut and overshot the gap while putting us neutral. Responsive buyers pushed us back up toward session high to end the day.

Intermediate term we are back at bracket high. Short term memory says look for sellers to defend here and whack us back through the range. To expect anything different would be to ignore recent history. The caveat is our current velocity. When we come into a key reference point at high speed, you expect to see the rejection/reversal happen quickly. Otherwise it’s likely we continue through it.

Heading into today, my primary expectation is for sellers to push down into the overnight inventory to close the overnight gap down to 4537.25. From there I’ll look for a continued push to 4530 where we see responsive buying a two way trade take hold.

Hypo 2 is we sustain trade up at new contract high and go hunting for buy stops. Measured move targets are 4578.75 and 4594.75.

Hypo 3 is liquidation. Sellers reject a new contract high harshly, push down fast to 4530 where buyers mount a weak defense but are ultimately overrun. Look for continuation down to 4515.

Levels:

07162015_NQ_VP

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