NASDAQ futures are coming into Friday gap up after an overnight session featuring extreme volume on elevated range.  Price was balanced overnight, briefly exceeding the low set during Thursday trade before settling into two-way trade in the lower quadrant of Thursday’s range.

The only economic event today is the primary reading of U. of Michigan Confidence at 10am.

Yesterday we printed a trend down.  The day began with a gap down.  Sellers defended an attempt back up into Thursday’s range and that was that cue to start shorting.  The selling accelerated into the Monday gap and we worked the weekly gap closed.  We continued lower, nearing last week’s lows before the session ended.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5800.75.  Then we continue lower, down through overnight low 5786.50.  Look for buyers down at 5773.75 and two way trade to ensue.

Hypo 2 heavier selling takes price down to 5753.75 before two way trade ensues.

Hypo 3 buyers gap-and go higher, work up through overnight high 5826 and trade up to 5860.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Greetings time travelers!

The Fed minutes are out, and some sellers have introduced themselves to the marketplace since they were dropped.  So far, the week is playing out much like our laboratory team anticipated in the Sunday Strategy Session:

Strategy session is long and filled with tons of technical trading guff that only hardcore traders understand.  That is why each report is capped off with an Executive Summary.  Despite being the first bullet point of the report, it is written last, after all the complications of the Index Model and other objective instruments have been calibrated and read.

It is for the C-suite types who have not the time nor care to sift through spreadsheets and charts.  Hopefully you guys are finding the research helpful.  It helps us immensely to put our research into as few words as possible—to make the words count—to clarify our findings.  Then execute.

This morning’s primary hypothesis played out almost exactly, as did yesterdays.  This has resulted in solid execution in the NASDAQ arena.  Hopefully, my demonstrating the power of auction theory live is also making a few of you connect the dots in your trading approach.

There was a bonus trade today, outside of the confines of the primary hypo.  It came just before the FOMC minutes.  It is a long-time favorite of mine and it ran congruent with the overarching forecast from the Strategy Session.  Put simply, the trade is triggered when price crosses the daily mid-point then retraces back to the mid-point from the other side.  It looks like this:

There was enough room between the mid-point and my only EMA to make a nice profit.

So now what?  That should be your question after reading through all the historical information above…

The day has gone neutral.  That means we went range extension up, and now we are range extension down.  The most likely outcome in a neutral scenario is a push back to value before we head anywhere else.  The interesting thing is, where we are sitting now, at neutral extreme low, is right at value, look:

My primary expectation is that we trade lower into end of day.  My conviction in afternoon trading is low, so I shall not partake.  But if I were, I would continue working the sell side, looking to target a probe below Tuesday’s low 5895.50 before two way trade ensues.

Given the strength seen Monday, it is unlikely sellers will gain any major traction and begin initiating aggressive selling this week unless an unexpected news item hits the wires.

So while the Exodus Strategy Session expected the sellers to step in around 2pm Wednesday, AFTER A SHORT SQUEEZE, which they are, it seems unlikely we go back down to last week’s lows, given the progress made Monday.  However, given the effectiveness of Sunday’s forecast, commentor Slippy is requested at this time to bend the knee and get to sucking on these plums:

#tradeaccordingly

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NASDAQ futures are coming into Wednesday gap up after an overnight session featuring normal range and volume.  Price worked higher overnight, taking out the Tuesday regular trading hours high but not the high mark set during extended trade very early Tuesday morning.  At 8:30am Housing Starts/Permits data came in below expectations.

Also on the economic calendar today we have crude oil inventories at 10:30am and FOMC minutes at 2pm.

Yesterday we printed a normal day.  The day began right around an open gap from last Wednesday.  Sellers worked price lower, closing the overnight gap then trading a bit lower before settling into two way trade.  There was no range extension, hence the normal day designation.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5911.50.  Look for buyers to defend here, and then work up through overnight high 5938.50.  Look for sellers up around 5943 and two way trade to ensues ahead of the FOMC minutes.

Hypo 2 sellers press harder, down through overnight low 5903 setting up a move to target 5876.25 before two way trade ensues ahead of the FOMC minutes.

Hypo 3 stronger buyers trigger a rally up to 5976.25 before two way trade ensues ahead of the FOMC minutes.

Look for the minutes to give direction into end-of-day.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Tuesday gap up after an overnight session featuring elevated range on normal volume.  Price worked higher, about halfway up into last Tuesday’s range before settling into two-way trade.  At 8:30am Advance Retail Sales data came out better-than-expected.

Also on the economic calendar today we have NAHB Housing Market Index and Business Inventories at 10am, 52- and 4-week T-bill auctions at 11:30am, and Long-term TIC flows at 4pm.

Yesterday we printed a double distribution trend up.  The week began with a pro-gap up and we spent the rest of the day slowly trending higher.  It was an extremely strong push, one that makes the expectation of sellers resurfacing later this week less likely than anticipated on Sunday.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5910.50.  From here we continue lower, down through overnight low 5905.75, tagging 5900 before two way trade ensues.

Hypo 2 buyers work up through overnight high 5945 and probe last week’s high 5972.75.  Sellers are just above and two way trade ensues.

Hypo 3 stronger sellers press down to 5876.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Monday gap up after an overnight session featuring elevated range on normal volume.  Price worked higher overnight, eventually coming into balance inside last Wednesday’s range.

The economic calendar starts off slow this week.  We only have a 3- and 6-mont T-bill auction to monitor at 11:30am.

Last week began with a gap higher and one-and-a-half day rally.  Then, after a sharp reversal Tuesday afternoon, there was a big gap down Wednesday.  But buyers bought it up all day.  Then Thursday was gap down again, and this time a trend down printed.  However, much of the progress made by sellers on Thursday was retraced Friday.  Below, the last week performance of each major index is shown:

On Friday, the NASDAQ printed a double distribution trend up.  When an early drive lower failed to take out the Thursday low, instead sharply reversing one tick ahead of the low, buyers reacted and stepped in.  Then, in the afternoon they became initiative, eventually closing the day out near last Thursday’s midpoint.

Heading into today my primary expectation is for sellers to push into the overnight inventory and close the gap down to 5837.75.  Sellers continue lower, down through overnight low 5837.25, setting up a move to target 5831 before two way trade ensues.

Hypo 2 buyers lurch up through overnight high 5878, trading up to 5884 before two way trade ensues.

Hypo 3 gap-and-go higher.  Buyers sustain price above 5884 setting up a move to target 5900.

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 volume on normal range.  Price worked down through the Thursday low overnight before settling into balance.  At 8:30am Consumer Price Index data came out slightly worse than expected.

There are no other major economic events scheduled for today.

Yesterday we printed a trend down.  Price began the day gap down and we pushed lower off the open, gap-and-go.  Then we continued lower, pushing down into the 7/13 range before two way trade ensued.

Heading into today my primary expectation is for sellers to push into the overnight inventory and close the gap down to 5789.  From here we continue lower, down through overnight low 5761.  Look for buyers down at 5753.75 and two way trade to ensue.

Hypo 2 buyers trade up to 5813.25 before we reverse and turn lower.  We take out Thursday low 5783.25 briefly before two way trade ensue.

Hypo 3 strong buyers work up to 5827 then sustain trade in this range, triggering a rally up to 5854.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Thursday gap down after an overnight session featuring elevated range and volume.  Price worked lower, nonstop, overnight, in a slow and steady manner.  The overnight session held inside of Wednesday’s price range.  At 8:30am Initial/Continuing jobless claims data was mixed.

Also on the economic calendar today we have a 30-year bond auction at 1pm and a Monthly Budget Statement at 2pm.

Yesterday we printed a normal variation up.  After beginning the day with a significant gap down, an early attempt lower stalled out just below overnight low.  Then we spent the rest of the day slowly auctioning higher.

Heading into today my primary expectation is for a gap-and-go lower.  Look for sellers to press down through Wednesday low 5861.75 and continue lower, down to 5846.25 before two way trade ensues.

Hypo 2 stronger sellers work down to 5835.50 before two way trade ensues.

Hypo 3 buyers work into the overnight inventory and close the gap up to 5922.75 then continue higher, up through overnight high 5924.50.  Look for sellers up at 5938.25 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Wednesday gap down after an overnight session featuring elevated range and volume.  Price worked lower all night after our authoritarian leader took a hard, nuclear stance against the petulant nation of North Korea.  Price worked down near last week’s lows, but has not yet breached them.

The economic calendar is light today but crude oil inventory at 10:30am may carry more weight considering we may be headed to war.  There’s also a 10-year Note auction at 1pm.  It will be interesting to see how that government debt is received with nukes being so casually discussed.

Yesterday we printed a neutral extreme down.  The day began with a gap down that was quickly bought up.  Buyers continued to initiate risk, pressing well-up-into the hard selling back on 7/27.  Then, the bids dried up, and we reversed the entire day’s range, making a new session low, pushing us neutral, then closing near low-of-day, earning the extreme designation.

Heading into today my primary expectation is for a gap-and-go lower.  Look for buyers down at 5841 and two way trade to ensue.

Hypo 2, a return to the ‘scene of the crime’.  Buyers press into the overnight inventory and work up through overnight high 5919.25.  They continue higher, up to 5938 to see if sellers meant business yesterday.

Hypo 3 stronger sellers press down to 5805.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Tuesday gap down after an overnight session featuring normal range and volume.  Price worked lower overnight during a balanced session.

On the economic calendar today we have JOLTS Job Openings at 10am, a 4-week T-bill auction at 11:30am, and a 3-year Note auction at 1pm.

Yesterday we printed a double distribution trend up.  The week began with a gap up that sellers were unable to fill.  Once sellers failed, buyers were inspired to initiate fresh risk, pressing the market higher, slowly, for the remainder of the session.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 5933.25.  From here buyers continue higher, up through overnight high 5937.75.  Look for sellers up at 5942.25 then two way trade to ensue.

Hypo 2 sellers work down to 5913 before two way trade ensues.

Hypo 3 stronger sellers close the weekly gap down to 5898, then continue lower, down to 5888 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Monday gap up after an overnight session featuring normal range and volume.  Price worked higher overnight during a balanced session that took out last Friday’s high.

The economic calendar is light all week.  Today we have only a 3- and 6-month T-bill auction at 11:30am, then Consumer Credit at 3pm.  Our planet is experiencing a somewhat uncommon phenomenon however.  Several parts of Europe and Asia will be able to view a partial lunar eclipse.  The alignment can fuss with the waves generated on land, and perhaps the waves generated by humans on the stock exchange.  There is no objective proof to back up this claim.

Last week the Dow Jones cruised higher, the Russell lower, the S&P marked time, and the NASDAQ had consistent morning selling pressure but no real follow through in the afternoons.  Here is the performance of each major index next week:

On Friday the NASDAQ printed a normal day.  Normal days are statistically uncommon, occurring about 5% of the time.  We printed a normal day on Thursday AND Friday.  Oddly calm.  Both days began with a gap up that was quickly resolved by sellers.  The selling was dynamic Friday morning, creating an initial balance so wide it was not taken out for the remainder of the session.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5898.  From here we continue lower, down through overnight low 5894.75.  Look for buyers down around 5880 and two way trade to ensue.

Hypo 2 buyers work up through overnight high 5921.50 and continue higher to 5932 before two way trade ensues.

Hypo 3 stronger sellers press down to 5841 before two way trade ensues.

Note: Today’s partial lunar eclipse is merely an opening act to the total solar eclipse that will occur over North America on August 21st.

Levels:

Volume profiles, gaps, and measured moves:

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