NASDAQ futures are priced to open modest gap up after a balanced overnight session featuring normal range and volume.  The Globex session was literally the most mild one, year-to-date.  Price held yesterday’s mid on a test down to up and is now up near weekly highs.

On the economic agenda we have U of Michigan Confidence at 10am and Baker Hughes rig count at 1pm.

Yesterday we printed a normal variation up.  There was a hard move lower off the open that quickly fizzled out and price spent the rest of the session churning higher.

Heading into today my primary expectation is for sellers to push into the overnight inventory and close the gap down to 4393.  From here look for a move to take out overnight high 4405.75 then continue higher to probe above the weekly high 4407.75 before two way trade ensues.

Hypo 2 buyers keep the gap open and race up through overnight high 44057.75 early on before sustaining trade above 4407.75 to set up a move to target 4416 before two way trade ensues.  Stretch targets on the upside are 4424.75 then 4444.75.

Hypo 3 sellers close gap down to 4393 then take out overnight low 4384.25.  Look for responsive buyers down at 4378.50 before two way trade ensues.

Hypo 4 strong sellers show up, take out overnight low 4384.25 then set out to target 4343 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are priced for a gap down after an overnight session featuring elevated volume and range.  Price breached the Wednesday high before rolling over early this morning.  On the way down, price managed to hold yesterday’s range before settling into two way trade.  At 8:30am we heard from the Philadelphia Fed and also Initial/Continuing Jobless claims.  The initial reaction is buying.

Also on the economic calendar today we have JOLTS Job Openings and Leading Indicators at 10am, and at 1pm there is a 10-Year TIPS auction.

Yesterday we printed a double distribution trend up.  The gap down to start the session was quickly bid up in an opening drive.  Sellers worked in ahead of the Fed rate decision by were ultimately overrun during the reaction to the unchanged rates.  Price worked higher to close the 10/21 open gap at 4399 before responsive sellers stepped in and faded the move.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4386.75.  Look for sellers to defend the 4400 century mark before a long balance takes hold.  Late in the session look for a move to take out overnight low 4359.75 before two way trade ensues.

Hypo 2 strong buyers close overnight gap up to 4386.75 then push up through 4400 and sustain trade above it setting up a move to take out overnight high 4412.75.  Look for responsive sellers up at 4416.  Stretch targets are 4424.75 then 4444.75.

Hypo 3 sellers gap and go lower, take out overnight low 4359.75 early then work down to target 4343 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Third reaction Fed analysis, a sophisticated method of identifying the three major rotations after the rate decision, yielded the buy and I went to work vanquishing short sellers.  Participation is limited to the day time frame however, because this market is setting up just like I have envisioned over the last two weeks.

See also: The Dow Is Forming The Wedge

There was a clean improvement from the internals that gave confidence to the long trade this afternoon.  After FOMC, Net Tick improves substantially, blasting up to session high and holding the gains:

Then, despite 4 big sell programs running on the NASDAQ 100, the robots were trumped by two huge buy programs running over at the NYSE.  These you can go with intraday, but tell a story going forward [more on that in a moment, first observe the algo wars]

When NYSE ticks hard, and this is only an observation, it tends to mark the crescendo of a move.

See also: All The Fixings for a Rally

With my last long closed, I have initiated a short position on the NASDAQ, via the QID, a position I will add to should we close out the week strong.

 

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NASDAQ futures are set to open gap down after an overnight session featuring normal range and volume.  Price briefly exceeding yesterday’s high on balanced trade.  At 8:30am the Consumer Price Index came out slightly better than expected [1.0% vs 0.9% expected] and introduced sellers who worked price below the midpoint of yesterday’s session.

There are several economic data points out today, with the FOMC Rate Decision at 2pm being the most significant.  The consensus forecast is for rates to stay unchanged at 0.50%.  The announcement will be followed by a press conference with Fed chair Yellen at 2:30pm.  Also on the docket we have Industrial/Manufacturing Production at 9:15am and crude oil inventory at 10:30am.

Yesterday we printed a normal variation up.  it was a quiet session that briefly pressed to a new weekly low before printing a failed auction near last Friday’s VPOC and began trading higher.  Price slowly worked the overnight gap fill before settling into two way trade.

Heading into today my primary expectation is for buyer to work into the overnight inventory and close the gap up to 4356.  From here look for a move up to 4360 before we settle into two-way trade ahead of the FOMC.

Hypo 2 sellers use this news-driven sell momentum to continue pushing lower and test yesterday’s low 4329.  Look for sellers to continue down to 4322.25 before two way trade ensues ahead of FOMC.

Hypo 3 strong buyers close gap up to 4356 then take out overnight high 4369 before settling into balance ahead of the Fed. Stretch targets are 4400 then 4407.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are set to gap down after an overnight session featuring normal range and volume.  Price pushed lower for most of the session and briefly tested below yesterday’s low before finding a responsive bid and settling back into balance.  At 8:30am Advance Retail Sales came out slightly better than expectations.  So far participants have not reacted to the news.

On the economic docket today we have NAHB Housing Market Index and Business Inventories at 10am, a 4-week T-Bill auction at 11:30am, and Net Long-Term TIC Flows at 4pm.

Also note, tomorrow afternoon The Fed rate decision will be announced. With this major news event looming on the horizon, the market will likely put all directional discovery on hold.

Yesterday we printed a double distribution trend up.  While the other indices managed to give up most of their gains late yesterday, the NASDAQ held above the MID after having a slow uptrend all day.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4357.50.  From here look for a move to test above overnight high 4359.25 before two way trade ensues.

Hypo 2 sellers hold price below 4350 setting up a move down through overnight low 4330.  Look for responsive buyers down at 4315.50 and two way trade ensues.

Hypo 3 strong selling pushes down through 4315.50 and sustains trade below it, setting up a move to test the 4300 century mark before two way trade ensues.

Hypo 4 strong buying sustains trade above overnight high 4359.25 setting up a move to test above the Monday high 4370.25. Stretch target is 4400.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are set to open the week gap down after an overnight session featuring normal range and volume*.   Price held the upper half of the Friday range on quiet, two-way trade.

*Volume data will be skewed this week, however, due to some participants staying behind and trading the March contact while most move forward to June.

On the economic calendar today we have a 3- and 6-month T-Bill auction at 11:30m.

Last week was a slow grind down through Thursday.  Early Thursday we heard from the ECB, who pushed their key borrowing rate down to negative 0.40% while promising additional monetary stimulus.  This jostled the NASDAQ a bit, opening it gap up before heavy selling came in. The heavy selling was ultimately reversed, effectively trapping sellers down in ‘the hole’.

Friday price opened gap up and slowly churned higher.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4345.75.  From here a move to take out overnight high 4350.75 sets up a test above last week’s high 3453.75 before two way trade ensues.

Hypo 2 sellers work down through overnight lo 4331.50 and find responsive buyers down at 4315.75 before two way trade ensues.

Hypo 3 strong selling pushes price down through 4315.75 to test below the Friday low 4309.  Look for a move down to the 4300 century mark before two way trade ensues.

Levels:
Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Friday gap up after an overnight session featuring extreme range on indecipherable volume.  Volume is split between the March and June contracts because of rollforward.  I will stick with the March contract into the weekend. Price worked higher during the entire session, stalling out just before the weekly high set Monday.

The only economic event today is the Baker Hughs Rig count at 1pm.

Yesterday we printed a big normal variation down.  Late into the session it looked like a double distribution trend down, but the strong end of day bounce radically shifted its form.

Heading into today my primary expectation is for sellers to push down into the overnight inventory and test down to the 4300 century mark before buyers step in and work up though overnight high 4346.50.  From here look for a test above the Monday high 4355 before two way trade ensues.

Hypo 2 buyers gap and go, take out overnight high 4346.50 early on then sustain trade above the Monday high 4355 setting up a big rally to target the 4400 century mark.  Stretch targets are 4407.50, 4415.50, then 4433.25.

Hypo 3 strong selling closes overnight gap down to 4285.25 then takes out overnight low 4282.50.  From here sellers continue lower to target 4267.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are set to start today gap up after an overnight session featuring extreme range on elevated volume.  Trade was balanced overnight, quickly exceeding and sustaining trade above the Wednesday close before trending higher from 7am onward.  The trend was driven by news from Europe, that their Central Bank has cut borrowing rates to -0.40% and also expanded their quantitative easing program to include the purchase of corporate debt.  At 8:30am Initial/Continuing Jobless claims data came out better than expected.

See also: Draghi Surprises To The Upside And Throws The Kitchen Sink at Markets

Also on the economic docket today we have a 30-Year bond auction at 1pm and the Monthly Budget Statement at 2pm.  Today is also rollforward.  After the open, most active participants will begin trading the June index futures contract instead of the March, which expires next Friday.

Yesterday we printed a normal variation up.  Price opened gap up but well within the Tuesday range and sellers quickly close the gap with an opening drive down.  Sellers were not able to push the market down below the Tuesday low before responsive buyers stepped in and worked price range extension up.  Sellers made a second aggressive attempt lower, but were not able to push the market neutral for a third consecutive day.  Instead buyers defended session low and then worked price slowly higher for the remainder of the session.

Heading into today my primary expectation is for sellers to push into the overnight inventory and work price down to 4310.  Buyers defend here, ahead of the gap fill, and we work higher to take out overnight high 4347.50 before testing above the weekly high 4355 before two-way trade ensues.

Hypo 2 sellers push a full gap fill down to 4294.25 then set their sights on the overnight low 4283.50.  Selling accelerates and we trade down to 4269 before two way trade ensues.

Hypo 3 buyers jam the gap and go drive higher.  Take out overnight high early 4347.50 then sustain trade above the weekly high 4355 setting up a move to target the 4400 century mark.  Stretch target is 4406.75.

Levels:

Volume profiles, gaps, and measured moves:

 

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For two weeks I was bearish and wrong.  This week I came in neutral, but Switchboard [coded context] keeps nudging its bias long, then back to neutral, flip-flopping, if you will.

The conditions are not conducive for trading inside-out.  Trying to initiate directional trades is likely to chop you out.  Instead you have to work from the outside-in, fading moves back to value.

Trading conditions like this mean markets are in balance.  They are resilient against attempts higher and lower, and are structurally sound.

Aside from fading extremes, this type of action also lends itself to stock picking–a pastime I haven’t actively pursued yet this year.

All the data points to neutrality with a very slight bullish bias.  The huge value areas in play are hard to bust loose from.  Stock picking might be the move, but I am not participating.  The markets are likely to remain in wait-and-see mode until we hear from the European Central Bank tomorrow, resistant to any directional attempts.

SEE ALSO: All Eyes on Mario Draghi

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NASDAQ futures are set to begin Wednesday trade gap up after an overnight session featuring normal range and volume.  Price spent most of the session working higher and managed to hold the Tuesday range.  At 7am MBA Mortgage Applications came out significantly better than the previous month.

Also on the economic docket today we have Wholesale Inventories at 10am, crude oil inventories at 10:30am, and a 10-Year Note auction at 1pm.

Yesterday we printed a neutral day, the second consecutive neutral day.  The market opened gap down and spent the morning filling the gap, much like Monday.  In the early afternoon, the market attempted to continue going higher but formed a failed auction as it attempted to re-enter the mutli-day balance formed from March 1st-7th.  We then traversed the entire range to push the session neutral before the settlement period saw enough buying the fend off the ‘neutral extreme‘ nomenclature.

Heading into today my primary expectation is for sellers to push into the overnight inventory and close the gap down to 4272.  Look for responsive buyers ahead of overnight low, however.  Buyers step in around 4265 and make a move to take out overnight high 4299.  Range stays tight as responsive sellers defend the 4300 century mark and two way trade ensues.

Hypo 2 sellers push the gap fill down to 4272 then set their sights on overnight low 4263.  From here selling continues to target 4251 before two way trade ensues.  Should the selling accelerate, the stretch target is 4234.25.

Hypo 3 buyers gap and go, take out overnight high 4299 early on and sustain trade above 4300 setting up another attempt back into the March 1st-7th inventory, an attempt back above 4310.  The achieve it setting up a move up through to 4315.  Sellers likely respond here, at least on the first attempt.  Stretch target is micro-composite value area high 4330 then 4337.75.

Levels, note the healthy balance distributions currently in place:

Volume profiles, gaps, and measured moves:

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