NASDAQ futures are gap up (borderline pro gap) heading into Tuesday after an overnight session featuring slightly elevated range and volume.  Volume metrics are still skewed as some transactions take place on the December contract, and the bulk of orders go through on the March contract.  Price held Monday’s close in balanced trade which gave way to buying around 3am.  The result is two distinct market profile prints for globex (two small bell curves on the market profile chart below).  At 8:30am Consumer Price Index data came out inline with expectations.

Also on the economic calendar today we have the NAHB Housing Market Index at 10am and Net Long-term TIC Flows at 4pm.

Yesterday we started the week out with violent chop trade which gave way to selling.  Responsive buyers showed up ahead of the weekly ATR band and formed a sharp excess low.  Price then traversed the entire range to form a neutral extreme up day–a day type carrying the third-most amount of directional conviction.

Heading into today my primary expectation is for sellers to push into the overnight inventory and trade down to 4570.  I will look for buyers to defend here, ahead of the gap fill, and work to take out overnight high 4598.75.  Look for a test of 4610 then two way trade ensues.

Hypo 2 buyers gap and go, take out overnight high 4598.75 early and sustain trade above 4610 setting up a move to close the 12/10 open gap up at 4637.75 before two way trade ensues.

Hypo 3 trend day up emerges, taking out the 12/10 gap up at 4637.75 and sustaining trade up here before going up to test 4650.

Hypo 4 full gap fill down to 4560.50.  Look for sellers to probe down to 4546.25 then two way trade ensues.

levels:

NASDAQ futures are coming into the week gap down after an overnight session featuring extreme range.  The action took place on elevated but not extreme volume, but this might be attributed to some volume still taking place on the December contract.  Price managed to rally during the evening and take back more than half of the trend down last Friday before rolling over around 6am and pushing to new lows.

On the economic calendar today we have 3 and 6-month T-bill auctions at 11:30am.  However this week all eyes are on the FOMC who is expected to raise interest rates this Wednesday.

Last week the stock market was for sale. The market worked lower with accented down moves on Wednesday and Friday. Friday saw a big pro gap down followed by trending price lower.  Buyers defended briefly around the 11/17 gap fill at 4564.75 but were eventually overrun.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4532.  Look for responsive sellers around 4538 and two way trade to ensue.

Hypo 2 sellers show up ahead of the gap fill and price rolls over to take out overnight low 4509.75.  Look for a move to test the 4500 century mark then  responsive buyers at 4495.

Hypo 3 strong buyers fill the overnight gap up to 4532 and sustain trade above 4540 to set up a move to take out overnight high 4573.  Look for responsive sellers around 4582.50.

Hypo 4 liquidation continues, price slashes through 4490, look for responsive buyers around 4467.

Levels:

NASDAQ futures printed an extreme, 3rd sigma range overnight on volume that is difficult to interpret since it is spread between the December and March contract.  Price was balancing along the midpoint of Thursday trade before news came out the Chinese had devalued their currency.  This news sent prices lower, down to new lows on the week.  At 8:30am Advance Retail Sales data came out lower than expected, but ex auto and gas slightly better than expected.  The initial reaction is buying.

Also on the economic docket today we have Business Inventories and U of Michigan Confidence at 10am.

Yesterday we printed a normal variation up day.  Sellers worked the gap fill before buyers stepped in and worked price higher.  Late in the afternoon responsive sellers managed to knock price down through the mid.

Heading into today my primary expectation is for buyers to work into the overnight inventory up to about 4615.25.  From here look for sellers to step in and work to take out the overnight low 4585 and 4580 before two way trade ensues.

Hypo 2 sellers push off the open, take out overnight low 4580 early and set up a gap fill down to 4564.75 (11/17 open gap).  Look for responsive buyers here and two way trade to ensue.

Hypo 3 the agressive thrust bid reemerges, negating the downward action with one hard rotation up through 4620 and targets an overnight gap fill up to 4637.75 before two way trade ensues.

Hypo 4 full on liquidation.  Push through the 11/17 gap at 4564.75 to target 4550.  Some responsive buyers here who are ultimately overrun as we continue to explore lower prices.

Levels:

I got an early start this morning and updated all my charts and levels to the March 2016 contract.  A younger Raul would stumble into roll forward after a hard night of cognac and Newcastle and be flat footed while the market ran amuck–like it tends to do during roll forward.  Not today my friend.  An older and wiser Raul is peculating.

NASDAQ futures are higher heading into Thursday after a globex session that featured normal range.  Volume metrics are n/a as the transactions are being spread between December and March.  Price traded the lower half of our Wednesday range in an overall balanced session.  At 8:30am Initial/Continuing Jobless Claims data came out worst than expected and the initial reaction is buying.

Also on the economic calendar today we have Household Change in Net Worth at 12pm and a Monthly Budget Statement and 2pm.

Yesterday we printed a neutral extreme down.  This day-type carries the third-most amount of directional conviction and suggests an active higher time frame participation from both buyers and sellers, with sellers being more aggressive.  It looked like some year-end positioning into the FOMC rate decision.

Heading into today my primary expectation is for sellers to work into the overnight inventory, take out overnight low 4612.75 and close the gap down to 4609.75.  Look for responsive buyers on a probe below yesterday’s low 4589 and two way trade ensues.

Hypo 2 buyers push early and take out overnight high 4640.25 setting up a short squeeze up to 4672.50 before two way trade ensues.

Hypo 3 tight balanced trade.  Hold a range from 4644.25 to 4600.

Hypo 4 full on liquidation.  Take out 4589 early (yesterday low) and set up a secondary leg to 4580.  Responsive buyers here are overrun by more supply and we trade down to 4553.25 before two way trade ensues.

Here are my levels, fresh and ready for fades:

I can talk order flow all day.  I wanted to share this morning’s trade.  The market breaches its initial balance (range set during first hour of trade) 95.74% of the time (source: a recent study I conducted over 7 years of raw IQFeed data).  This is one of the stats I work to take advantage of every day.  Guessing which side breaks and getting on board is the tricky part.  That is where order flow comes in.  Today I had a few tools to work with, including a big iceberg on the exchange.

The financial times does a decent job defining an iceberg order, so I won’t do extra work:

An iceberg order is a type of order placed on a public exchange. The total amount of the order is divided into a visible portion, which is reported to other market participants, and a hidden portion, which is not. When the visible part of the order is fulfilled, a new part of the hidden portion of the same size becomes visible.

And since it’s public knowledge, I also had an Exodus hybrid oversold, which tipped Switchboard to long bias.

Anyhow, my software reveals these iceberg orders.  This one was sitting right at 4683 and was 4 price levels deep, check it out:

This order flow stuff used to be impossible to visually share because it just happened inside the DOM.  Now that I can show with you guys what I am looking at, I will from time-to-time, because I love my auction theory order flow nerds.

Despite my overarching Titanic theme today, I will not post that Celine Dion song:

NASDAQ futures are trading lower as we head into cash open this second Wednesday of December.  Today is the last day most active traders will be swinging the old NQZ5 around.  Tomorrow we switch to a March mentality via the NQH6.  The Globex session featured an elevated range on normal volume.  Around 3am, just as we approached the Tuesday high a strong sale came in and pushed price back down through the late-morning buy surge seen yesterday.

The economic calendar is quiet today, but energy traders will be keeping a close eye on the weekly Department of Energy report on oil as the commodity undergoes serious selling pressure.

Yesterday we printed a normal variation up.  Price opened pro gap down and after some back-and-forth a strong buy thrust came through and closed the gap.  The market went two-way for a bit before an afternoon rally set up.  It was faded into the bell.

Heading into today my primary expectation is for sellers to make an early move on overnight low 4666.25.  This sets up a liquidation trade down to 4642 before I expect to see responsive buyers and two way trade ensue.

Hypo 2 buyers push into the overnight inventory and work a gap fill up to 4687.25.  Buyers stall out before 4700 and two way trade ensues.

Hypo 3 buyers firm up after closing the overnight gap up to 4687.25 and set their sights on overnight high 4707.50.  This sets up a leg up to 4718.50 before two way trade ensues.

Hypo 4 the big liquidation.  Below 4642.25 is more single prints–all the way down to 4600.

Levels:

This morning I was working a short bias. We were down into some Market Profile single prints and often times price can zip right through these thin zones:

Just before we went range extension down bulls stepped up and blew out my position for a scratch.  But buyers did not stop there (like happens sometimes, you get stopped and then your trade plays out).  No, they regained the Monday range.  This had me flipping to a long bias.

How I got on board the long was a matter of order flow.  As price pushed up into the Monday range it blew though a huge offer.  Once that went down, I was waiting for price to come back to that blown out offer, as these spots often provide low-risk entry points.  The key contexts were the failure to range extend down, the open gap above, and the re-entry into the Monday range.  But, check out this awesome order flow setup:

You have to see this stuff a few times before execution becomes fluid, but it’s powerful stuff.  After riding most of the gap fill my trading day was over.

NASDAQ futures are coming into Tuesday pro gap down after an extreme range print overnight on elevated volume. Price managed to push down through the Monday low and test the conviction drive that set up last Friday morning. The most prominent feature of the globex session is a 35 point down rotation that occurred around 6am this morning.

There are no economic events to be aware of today.

Yesterday we printed a normal variation down with a profile that suggests long liquidation. After going range extension down, sellers struggled to initiate further downside. Instead the profile skewed into a lowercase letter-b shape before the market had a small rally into the close.

Heading into today my primary expectation is for buyers to push into the overnight inventory and work the half gap fill up to 4673.75. I will look for responsive sellers here who try for overnight low 4645.50 but fail. Instead buyers push a secondary leg up through 4677.25 to target 4685.50 before two way trade ensues.

Hypo 2 buyers struggle with the half gap up to 4673.75, stalling before, and sellers go take out overnight low 4645.50. This triggers liquidation down the single prints, all the way to 4603.50 before two way trade ensues.

Hypo 3 gap and go lower. No time is spent pushing into overnight inventory. We liquidate down to 4603.50 then target the 4600 century mark. Some back and forth here before w continue down to target 4587.

Hypo 4 buyers push a full gap fill up to 4701.75, negating the entire globex session before taking out overnight high 4705.25. Look for a test up through Friday high 4610 before two way trade ensues.

Levels:

As much as the lunch hour felt like an ugly whipsaw, and the morning an obtuse trend day, come close the NASDAQ left a very clear footprint–the old long liquidation.

A long liquidation is just like a short squeeze only you flip it over, or “fun-gu-la” as they say in China.  We printed a lowercase letter b on the daily profile.

When you use my hand massaged profiles you see a slightly different picture–two nicely shaped humps, and we are nestled right in the middle of them.  Check it out:

If I was a degenerate man (I most certainly am not) then I would stay up tonight and trade these price levels.  GOD WILLING, they remain untouched come morning when a more dignified gentleman such as myself can lean upon them for gains.  Nevertheless, I bequeath them to you, the unwashed masses, for the betterment of the trading class.

NASDADQ futures are coming into the week flat after a Globex session featuring normal range and volume.  Price managed to hold the upper quadrant from Friday before briefly exceeding its high print of 4723.25.  The session was balanced overall.

The economic calendar is quiet this week, with Advance Retail Sales and U. of Michigan Confidence reads being the highest impact events.  Both are featured later this week.  Today we only have Labor Market Conditions at 10am.

Last week started out with a Monday drift lower.  Tuesday-Wednesday lunch price drifted higher, took out contract high, stalled, then Wednesday afternoon we sold hard.  That carried through to a trend day down Thursday which saw a late-day bounce.  Friday managed to completely reverse the trend day by pushing up for the entire session.

Heading into today my primary expectation is for buyers to work a move to take out overnight high 4730.  From there look for some churn at the 4737 level before we proceed up through contract high 4739.50.  Sellers no show and we continue exploring higher prices but ultimately stall out below 4767.25 and two way trade ensues.

Hypo 2 sellers push down through overnight low 4702.50 and discover responsive buyers around the 4700 century mark.  Two way trade ensues with buyers targeting 4731.

Hypo 3 sellers accelerate down though 4700 setting up a move to target 4682.25.

Hypo 4 liquidation takes hold, after some churn near 4682.25 sellers push an initiative leg down to 4652.75.

Levels: