The NASDAQ futures continued pressing higher overnight and even managed to make a new contract high during a globex session that featured normal range and volume. The action was balanced, overall, but as we head into cash open price is up at the high. At 8:15am the ADP Employment change stats were slightly above expectations and saw a muted reaction. At 8:30am Trade Balance data came out slightly better than expectations and also elicited little response from the market.

The economic calendar is interesting today. We have ISM Non-Manufacturing Composite numbers at 10am. At the same time, Fed chair Yellen will start her testimony to the House Financial Services Committee. They intend to drill her this time on The Feds role in financial regulation. Usually they are questioning monetary policy, so this will be a fresh line of questioning and discovery. Hopefully you have a news feed for monitoring this. We also have the Crude/Distillate inventory out at 10:30am.

Yesterday we printed a double distribution trend day. This day type carries slightly less directional conviction than a trend day, but still indicates the market is discovering prices and not in balance.

Heading into today my primary expectation is for sellers to make an effort at pushing into the overnight inventory. Look for them to stall out before closing the gap down to 4710.75, instead finding responsive buyers (responsive relative to the open, initiative relative to yesterday close) at 4713.75 who work higher to take out overnight high 4728. Look for responsive sellers at 4734.50 and two way trade to ensue.

Hypo 2 sellers work down and close the overnight gap down to 4710.75 then set their sights on overnight low 4708 then a test below 4705.25. Responsive buyers are found just below 4705 and two way trade ensues south of 4726.

Hypo 3 buyers strong off the open, push through and sustain trade above 4734.50 to set up a continued exploration of higher prices.

Hypo 4 sellers accelerated down through 4705 and set their sights on the 4700 century mark. Stretch targets below are 4695.50 then 4692.75.

Levels:

The last hour of trade has been dominated by buyers who are chasing the NASDAQ as it explores all-time highs.

The morning had a slow start with volatility absent from trade. It was only a matter of time before trend day logic prevailed. What is trend day logic? It is the market profile theory that any entry in the direction of a trend day is a “risk free” entry into the following session. That means there is a high probability the following session will exceed the trend day high by at least 1-tick.

Exciting stuff, I know. So exciting it is one of my rules for turning off a bias:

…circuit breakers include pressing beyond the ATR band and trend days against my bias. These help keep me in the game even when I am wrong.

Anyhow, it is only lunchtime and we are up above my last reference point at 4705.25. If you recall, the report this morning said sustained trade above this level is paramount to the continued exploration of higher NASDAQ prices. It is hypo 4, and it appears to be in play.

Don’t be a hero here. If we sustain trade above this level there is no sense fighting the tape with shorts. NASDAQ sellers are right on their heels here and the Russell is already way out in front.

Also, there is a big-A magnet just above on the Dow and it is likely to exhibit an upward force on price as it comes into orbit.  Check it out, the annual CHVN up at 18,017:

Sellers have until about 1:30pm to show up otherwise I will be off the BIS bus for a loss.

The NASDAQ is down overnight after a balanced session featuring normal range and volume. Price was contained below the cash high from yesterday but within the upper quadrant of our Monday range.

The economic calendar is quiet today—perhaps the calm before the storm. On the docket today is Factory Orders at 10am. Earnings season is in full swing with Tesla set to report after the bell and Facebook scheduled for tomorrow afternoon. Also, I was unaware Fed chair Yellen is speaking tomorrow at 10am before the House Financials Services Committee until Bloomberg reported it this morning (careful, if you head over to Bloomberg they have one of the wretched auto start videos).

Yesterday we printed a trend day up. This day type is characterized by each successive TPO making a higher low. The strength of the trend is determined by how far the higher highs stretch. This trend day was gentle, hence my calling it a Stealth Trend Day. It was however a trend day nonetheless and it managed to press price up into new contract highs aka Open Air.

Heading into today my primary expectation is for buyers to press into the overnight inventory and close the gap up to 4693.50. From there look for them to continue higher to target the overnight high 4699 and press onward to test above the contract high 4699.50. Look for responsive sellers at 4705.25 and two way trade to ensue.

Hypo 2 buyers struggle to close the overnight gap up to 4693.50 and instead roll over ahead of it. Sellers then work to take out overnight low 4677. Look for responsive buyers around 4672.75 (interesting LVN and yesterday MID) and two trade to ensue.

Hypo 3 sellers accelerate down through the 4672.75 LVN and continue lower to target 4656.75. Look for responsive buyers to emerge around 4653 and two way trade to ensue.

Hypo 4 we continue trending higher and exploring these uncharted prices until we find sellers. This starts with sustained trade above 4705.25.

Levels:

By lunchtime the day already whiffed of a trend day. This is one of the benefits of running a few hypothetical scenarios each morning—if your most bullish scenario is complete before lunch and the market shows no sign of stopping, you may be in trend conditions.

I took a starter in BIS this morning, at lower IBB prices, which is already taking heat. I could cover and wait for higher prices.  I might.

This morning I walked someone through Exodus and on our stroll I was highlighting one item after another that supported the rally. Breadth was robust, all the sectors (sans stupid Utilities) were running, and the Healthcare Sector was leading. Industry scans were bullish as well. I wonder if he picked up on my, “Oh shit, this BIS is going to take some heat” tone.

I worked the short side of the tape around the 4673 level just like hypo 3 called for and managed to make a small stipend before being run out of town by the bulls. Sellers were there working alongside me, but the absorption by the bid was downright impressive. Thus, higher we went.

This is a trend day. Tomorrow is likely an up day too. Giddy up boys!

NASDAQ futures were active overnight as investors prepared to head into a new month. Price spent most of the evening trading lower before finding a strong responsive bid right where we rallied off the Fed Rate Decision last Wednesday afternoon.   Once the buyers were found price traversed the entire globex range. Heading into cash open price is sitting just below the MID from last Friday. This action occurred on normal volume and printed a slightly elevated range.

On the economic calendar today are two 10am events, the ISM Manufacturing reading and Construction Spending. The big economic event is scheduled for Friday premarket when we hear Nonfarm payroll. Keep in mind we also have Facebook earnings Wednesday.

Last week price churned sideways with a slight upward drift. Wednesday saw a strong rally after the FOMC rate decision. We ended the week probing down into the Fed rally.

Heading into today my primary expectation is for sellers to work down into the overnight inventory and close the gap down to 4646.50. Sellers push down though this area setting up a move to target overnight low 4625. From here look for sellers to continue probing lower to test below last Wednesday low 4600.50 before finding responsive buyers and two way trade ensues.

Hypo 2 is less volatile. Sellers struggle, but work the gap fill down to 4646.50 before responsive buyers step in (responsive relative to the open print, initiative relative to Friday close). Buyers make a move to target overnight high 4652.75 before finding responsive sellers at 4656 and two way trade ensues.

Hypo 3 buyers push up through 4656 and sustain trade above it, setting up a move to target 4668.75. Look for responsive sellers at 4672.75.

Levels:

Nearly all month, or at least since ripping off the lows, the Russell industrial average has been pinned sideways. While the NASDAQ and others enjoy gratuitous gains, the little Russell is locked into balance.

You may be asking yourself, “Why has this been happening Raul? Why won’t they set Snake Plissken free?” Listen to me, we are at the composite high volume node! This is the most traded price level going back over two years. Look:

The market likes this level. Sellers and buyers agree this is a fair price at which to exchange Russell tickets. And until a catalyst comes along we will keep trading at this level. HOWEVER, when a catalyst does come rolling in, it will cause a grandiose discovery phase to ignite.

Every trade has a buyer and a seller. When price compresses it creates boundaries. When we leave those boundaries half of the participants will be proven wrong. Their actions fuel discovery. This is auction theory 101, class is in shesh, and I am your sexy and mysterious teacher (no homo).

I ventured off the mother ship yesterday and went deep into the bush. Coming off big FOMC wins it always behooves me to step back and check myself, before I wreck my hard earned gains.

But from high atop a tree the one thing that stands out to my eye is the ascending wedge seen on the daily chart of the NASDAQ. You can see it on Facebook as well.

Facebook led us into the rally so keep an eye on it. My take: we explode higher from this wedge. Per the TOS mobile app:

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The NASDAQ futures are lower as we head into cash open after a globex session that featured an elevated range on normal volume. Price spent most of the session working lower before coming into balance on the topside of our 3-day micro-composite, which is about the same level as the midpoint of the range yesterday. At 8:30am several data were released including Initial/Continuing Jobless Claims, Annualized GDP, and Personal Consumption. The initial reaction is flat.

Coming up today, we also have Pending Home Sales at 10am and Natural Gas Storage stats at 10:30am.

Yesterday we printed a neutral extreme up day. Price opened gap up and worked lower to kiss the micro-composite volume point of control (MCVPOC) around 4620 before finding responsive buyers (responsive relative to the open, initiative relative to the micro-composite). From there we worked higher into the FOMC Rate Decision.

The FOMC rate decision introduced a hard sell into the market which traded right down into the value area low of the well-established market profile structure we were monitoring before again finding responsive buyers. Third reaction yielded the buy and we rallied higher to close the Apple earnings gap from last quarter (7/21/15, 4668.25) and tag the upper ATR bracket at 4675.25.

Heading into today, my primary expectation is for sellers to make an early push down through overnight low 4642.75 to target 4637.50. From there look for responsive buyers who work up to 4661 before two way trade ensues.

Hypo 2 buyers push into the overnight inventory and close the gap up to 4673.25. Look for the buying campaign to continue, testing above yesterday high 4678.25 and stalling out and finding selling up near 4680.

Hypo 3 sellers advance down through 4637.50 to target 4628.75 before two way trade ensues.

Hypo 4 liquidation takes hold, sellers press down through 4624 and sustain trade below. This sets up a secondary leg to test yesterday session low 4600.50 effectively unwinding the post FOMC rally. This move could continue down to 4580 if speed accelerates.

Levels:

Well I just made my week. Making ends meet has been tough with volatility completely absent so I was really looking forward to the action this FOMC rate decision would bring.

We had a well-defined profile established heading into the event and when the first reaction took us right to the value area low I was there to fade. What a solid level—it hardly took any heat but hey, market profile is just another passing fad. That orange TPO is how babies are made:

Trading my levels is the one thing I do well. The other is 3^rd reaction analysis, which yielded the buy.  That shelved RCS entirely and allowed me to press some longs for more than just a scalp.

And now I can be the lazy man I was destined to be.   I will be watching GoPro earnings after the bell whilst eating a bathtub full of cheesed doodles.

Equity futures traded higher on the globex session with a bulk of the overnight rally fueled by the Apple earnings announcement. Price managed to make a new 3-day high on the news before settling into balance. At 7am MBA Mortgage Applications came out lower than expected which introduced some selling to the tape. At 8:30am Advance Goods Trade Balance data was better than expectations. No reaction so far to it. Heading into cash open, price is sitting just above the session high from yesterday.

At 10:30am we have crude/distillate inventories, but the high impact event is scheduled for 2pm when the Federal Open Market Committee with make their rate decision.

Yesterday we printed a normal variation up day, the second this week, with price slowly drifting higher. The last three sessions overlapped enough to merit drawing a microcomposite (shown below on volume profile chart).

Heading into today, my primary expectation is for sellers to push into the overnight inventory and close the open gap down to 4632.50. From there look for sellers to continue pressuring the tape down to the micro composite volume point of control (MCVPOC) at 4621 before two way trade ensues. From here look for buyers to work higher to target overnight high 4651.75 and the gap Apple left behind last quarter up at 4668.25.

Hypo 2 buyers hold above yesterday’s range and go take out overnight high 4651.75 then close the Apple gap up at 4668.25. Look for responsive sellers up at 4675.25 and two way trade ahead of the FOMC minutes.

Hypo 3 sellers accelerate down though 4620 to take out overnight low 4613.75. Look for responsive buyers at 4604.

Levels: