Nasdaq futures chopped about in an active session of trade overnight after yesterday printed a directional distribution-type day. The primary expectation after yesterday’s distribution is chop with a downward bias. The wildcard today comes in the afternoon, where the market will receive minutes from the September FOMC meeting.
Yesterday the market went neutral early. Prices wasted little time range extending higher in the morning and pressed into Friday’s range where we found responsive sellers who pressed us through the initial balance and out the other side. We were in a neutral print before noon. When buyers made a second attempt higher they could not and choppiness gave way to afternoon selling. The neutral extreme type print carries strong directional conviction by the sellers, second only to the trend day.
Below current prices we have the strong buyer reaction from last Thursday. Whether buyers carry the same conviction today will likely be tested. If not, then price is likely to continue discovering lower in an attempt to find a buyer. Below last Thursday’s low we might begin to explore the 8/12 price range where an open gap and naked VPOC exist. Have a look at the cumulative delta on the bottom of the chart as well which emphasizes the strength of the selling pressure yesterday. I have noted these prices and other observations on the following intermediate term volume profile:
I have noted the short term price levels I will be observing on the following market profile chart:
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