NASDAQ futures are green heading into Monday’s cash open.  The globex session spent most of the evening trading flat before turning higher around the time European markets opened.  The session featured elevated range and volume.  Price managed to push up to the Friday, 9/25 high before sellers came in.

This week is light on economic events but there are a few high impact ones including this morning’s ISM Non-Manufacturing Composite at 10am.  Also out at 10am is the Labor Market Conditions Index.

Last week the NASDAQ started with a gap down and sellers drove price lower.  They extended beyond Monday’s low Tuesday then price went gap up into Wednesday.  Price churned sideways through Thursday and Friday was a trend day up after opening gap down.

Heading into today, my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4261.75.  Look for choppy trade early on ahead of the 10am data before sellers push down through 4270 setting up the gap fill.  Then look for a move to take out overnight low 4250.50.  Stretch target is 4243.75.

Hypo 2 sellers struggle to close overnight gap and cannot push down through 4270.  Buyers step in and probe above overnight high 4296.75 and above the 09/25 high at 4298.50.  Sellers do not defend up here and price continues working higher to target the open gap up at 4326.25.

Hypo 3 gap and go up.  Buyers take out 4298.50 early setting up a strong push to 4326.25.  Some churn in this region before continuing higher to close the open gap up at 4341.25.  Stretch target is the open gap up at 4366.25.

Hypo 4 when buyers probe above the 09/25 high 4298.50 it discovers sharp responsive selling and we work lower to target 4270 then a gap fill down to 4261.75.

Levels:

NASDAQ futures took the elevator down this morning after a much weaker-than-expected Nonfarm payroll print.  Prior to NFP the globex session was working higher.  Price managed to push into the low-end of last week’s range, just like yesterday morning, before reversing lower.  However, we did not exceed the globex high set Thursday morning.  The NFP reaction managed to push us into another extreme range/volume session with price now trading on the low-end of yesterday’s range.

Also on the agenda today we have Factory Orders at 10am and Baker Hughes Rig Count at 1pm.

Yesterday we printed a neutral extreme day.  After opening gap up we had a sharp drive lower but held Wednesday’s range.  Buyers stepped in and defended it twice—once in the morning and again in the early afternoon before reversing the auction and closing the day out at session high.

Heading into today, my primary expectation is for buyers to push into this NFP reaction.  Liquidity is still way out of whack as we head into cash open which can lead to quick directional moves.  Look for buyers to trade up and close the overnight gap up to 4187.25.  From there look for buyers to continue trading higher to ‘check back’ to the scene of the reaction up at 4213.25 before two way trade ensues.

Hypo 2, sellers gap-and-go lower.  The way USD/JPY is breaking lower supports this hypothesis.  Look for sellers to test yesterday’s low 4116.25 setting up a gap fill down to 4074.75.  Look for responsive buyers down at 4062.25 otherwise a move to the stretch target, the open gap down at 4031.25.  If the liquidation really accelerates then also look to fill the open gap down at 3997.50 from the China Rate Cut.

Hypo 3 so kind of two way trade ensues.  Sellers test below yesterday’s low 4116.25 and immediately find responsive buyers who struggle to fill the overnight gap up to 4187.25 stalling instead around 4160.

Levels:

NASDAQ futures are coming into the October nearly flat after being nearly 60 points higher early this morning.  Once the European markets opened pressure took price lower after buyers briefly pressed the market up into last week’s range.  Volume and range are both extreme on the session which so far managed to hold above yesterday’s midpoint.  At 8:30am Initial/Continuing Jobless claims data, an appetizer to tomorrow morning’s Non-farm Payroll data, came in mixed.  The initial reaction is selling.

We have a few economic points out at 10am including Construction Spending and ISM Manufacturing.

Yesterday price opened gap up right on top of Tuesday’s range and buyers pressed the morning trade.  By 1pm sellers pushed us neutral and by the close were trading just above the daily mid making it a classic neutral day.

Heading into today, my primary expectation is for sellers to press this overnight gap closed.  Look for trade down to 4154.50 then take out overnight low 4150.25.  From there a test down to 4132.75 where I will look for responsive buyers and two-way trade to ensues.  The 10am data may provide the turn/direction on the morning.

Hypo 2 sellers push down through 4132.75 setting up a test of 4100 with a stretch target down to 4083.

Hypo 3 buyers show up right around the gap fill 4154.50 and push higher to target overnight high 4225.75.  There is another piece of ‘pole climb’ context above 4238.50 which extends up to 4273.75 which would be my upside stretch target.

Levels:

Today had a nice rhythm. The longer time frame was participating but the short/intermediate term position traders were controlling the pace. In the final hour an onslaught of buy programs, the cavalry, brought home 100 NASDAQS. The quarter featured nearly a 14% peak-to-trough move and ultimately finished down 7.35%. But the last 12 months are basically flat. Let’s assess the journey, shall we?

Using charts to build context is similar to driving across the country using old school maps. The national map shows the major interstate and you may check this when you cross a state line. The weekly composite chart is the national map, see below:

We view state maps to see a bit more detail.  If the below chart were a state map it would be Ohio–where nothing happens. The daily bar chart is our state map:

Inside a city we want even more detailed maps to show alleyways, one-way streets, etc.  And if we went to the fruit market we would go even closer. These are the charts I post in the morning.

Anyhow, look at where the daily chart is trading—more or less right where we were last year, which also lines up with the old “14-year” gap. This area was resistance for a long time, then support for a little while, then abandoned, then returned to at high speed by maniac robots, and now being retested. Price has memory and this level is demonstrating it.

Let’s keep in eye on which side we reside mid-month and again at Halloween.

Futures are pro gap up heading into Wednesday after a globex session featuring extreme range on elevated volume. Price managed to hold well above yesterday’s session low before trending higher for most of the evening.   At 8:15 am ADP Employment change came in slightly-better-than expectations and as we head into cash open price is hovering near yesterday’s session high, but buyers were unable to take it out overnight.

At 3pm today Fed Chair Yellen and St. Louis Fed President Bullard are giving a talk on community banking. Investors may be watching closely to see how Yellen’s health has progressed after last week’s near-vomit experience.

Yesterday we printed a neutral day, barely. Just after 10:30am, for a fleeting moment, price went range extension up. Shortly after, excess high was formed and we spent the rest of the day auctioning lower. Around 3pm we pressed neutral on fast liquidation and by the close price was back inside the initial balance.

Heading into today, my primary expectation is for seller to push into the overnight inventory. Look for price to work down to 4100 level where we may see responsive buying. Look for sellers to overwhelm the bid and continue lower to close the overnight gap down to 4074.75 then target overnight low 4066. Stretch target is the open gap down at 4031.25.

Hypo 2 buyers sustain price above 4100 and we make a move above overnight high 4138.75. Buyers target 4147.25 before two way trade ensues.

Hypo 3 buyers gap-and-go up, take overnight high 4138.75 early and set their sights on 4166.25. Potential exists for a pole climb all the way up to 4200.

Levels:

Alright so after a rocky morning the market is settling into a nice little balance here.  This is hypo 4 action.  And with volatility peaking like we have now, that means you can make cheese despite the market not actually going anywhere.

Play the edges until you are steamrolled and whipped into changing your behavior:

The NASDAQ managed to work higher overnight on a globex session that featured extreme range and volume.  Price managed to exceed Monday’s RTH low briefly before turning higher and balancing out below yesterday’s MID.

We have two medium impact data points coming from S&P/Case-Shiller at 9am, the Composite-20 and the Home Price Index.  Then at 10am we’ll hear the latest read on Consumer Confidence, a high impact event.

Yesterday we started the week with a gap down.  Buyers were unable to close it up and we spent most of the day trending lower.  Price managed to come into balance toward the end-of-day but by then price was down well over 100 points.

Heading into today, my primary expectation is for sellers to work into the overnight inventory.  We can look for buyers to defend the 4100 century mark and this will be a useful pivot.  Primary expectation is buyers defend and we continue working higher to take out overnight high 4128.75.  Upside target is 4147.25.

Hypo 2 sellers push down through 4100 setting up the full gap fill down to 4093.50.  From here some two-way trade which gives way to additional selling down to 4080.

Hypo 3 gap-and-go higher.  Take out overnight high 4128.75 early and push to target 4164.25.  Stretch target is a pole climb up to 4200.

Hypo 4 buyers start strong, but are knocked back at 10am by Consumer Confidence and two way trade ensues between 4160 and 4100.

Levels:

NASDAQ futures are starting the week out with a gap down. Price is down nearly 30 points which is right around pro gap territory. The overnight session featured extreme range on elevated volume during the choppy session. Globex trade started with selling and quickly exceeded Friday’s low before buyers stepped in and rallied price back up to the mid. From there we spent the early morning working back down through the range to make new lows. We have a weak/double low at 4175. At 8:30am Personal Consumption Expenditure data came out in line/slightly better than expectation and the initial reaction was buying.

The only other item on today’s economic calendar is Pending Home Sales at 10am. As the week progresses keep in mind Friday’s Nonfarm payroll data.

Last week price worked lower. There were two pro gaps down and Friday a pro gap up that was faded, along with all of Thursday’s range. Volume on the sell side was stronger than we have recently seen. However there was a slight bounce [at least in the NASDAQ] as we wrapped up the week.

Heading into today, my primary expectation is for seller to work into the overnight inventory and close the weekend gap up to 4213. From there I will look for buyers to continue higher to take out overnight high 4239. Look for buyers to stall out soon after exceeding overnight high and two way trade to ensue.

Hypo 2 buyers cannot fill overnight gap and instead sellers step back in ahead of it. Look for sellers to target the weak overnight low at 4175 then to continue lower to target 4122.25.

Hypo 3 strong buyers, push up through overnight high 4239 and pole climb up to 4265, Then some churn, before targeting 4279.

Levels:

Heading into Friday NASDAQ futures are trading pro gap up, the third such gap this week, only today the direction is up. As we close in on cash open price is essentially where we started the week. The globex session featured extreme range and volume as the night session continues to be abnormally active. At 8:30am we had some medium impact GDP data out which all read slightly better-than-expectations.

The morning is spattered with medium impact economic data. At 9:45am we shall hear the Markit Composite and Service PMI stats. At 10am the University of Michigan will issue their final read on September Confidence, and at 1pm we have the Baker Hughes Rig Count.

Yesterday we printed a neutral extreme day. The market opened pro gap down, saw an open auction outside range, then sellers worked into the tape and pushed us lower. Price closed up the Labor Day gap (09/03) down at 4194, printed an excess low, then turned higher. Late in the afternoon a short squeeze developed on decent volume and buyers pressed the overnight gap closed to the tick (4264.75) and managed to hold onto the neutral extension into the close.

My primary expectation is for sellers to work into the overnight inventory. With all the economic data this morning we are likely to see choppy conditions. Look for trade down to 4260 but buyers to step in there and target overnight high 4315.75. Then look for two-way trade to ensue.

Hypo 2 buyers gap-and-go up. We take out overnight high 4315.75 early and set our sights on 4326.75. Some churn at this level then a continuation up to 4340.

Hypo 3 sellers hold us below 4300 and then work a full gap fill down to 4247. Look for a responsive bid down at 4240 then 2-way trade.

Levels:

We are headed into Thursday trade pro gap down (2^nd pro gap down this week) after an extreme session. Both range and volume pressed out beyond 3^rd sigma while price auctioned around. Yesterday evening price exceeded RTH low briefly before pressing higher. Upon testing globex high, around 4:30am, we had a failed auction and subsequently traversed the entire range and more, putting us at fresh weekly lows. At 8:30am Initial/Continuing jobless claims data came out mixed. We also had Durable Goods Orders out at 8:30 and the data was slightly better than expected. So far futures have not reacted to the data.

Also on the agenda today is New Home sales at 10am. It will be an interesting stat after seeing the big upward beat in MBA Mortgage Applications yesterday and Monday’s unexpected drop in Existing Home Sales, perhaps a resolution of the mixed message in housing if you will.

Yesterday we printed a neutral day. Price opened gap up, faded, held Tuesday’s upper quad before making range extension up. Price then went for a retest of the low, putting us neutral, then we churned into the bell.

Heading into today my primary expectation is for price to work lower. We may see buyers push into the overnight inventory but look for them to stall out ahead of 4242. Then look for sellers to continue lower to close the 9/4 open gap down at 4194. From there look for a strong responsive bid and buyers to work the gap fill all the way up to 4264.75.

Hypo 2 sellers gap-and-go lower, take out overnight low 4206 early and close the 9/4 gap down to 4194. Responsive bid is overrun setting up a liquidation down to 4164.

Hypo 3 strong buying on the open, works up through 4250 early and continues higher to close the overnight gap up to 4264.75. Then buyer set their sights on overnight high 4278.75. Look for sellers to defend 4282.

Levels: