NASDAQ futures are coming into Wednesday positive after a Globex session featuring extreme range and volume. Price worked down below the Tuesday low before reversing around midnight. Since then price traded up to the session mid from yesterday. At 7am MBA Mortgage Applications came in way below expectations and at 8:15am the ADP Employment Change was better than expected.
Also on the economic calendar today we have ISM Non-Manufacturing at 10am and crude oil inventories at 10:30am.
Yesterday we printed a double distribution trend day down. This day-type carries the second most directional conviction. Therefore, opening gap up is likely to surprise a few participants.
Heading into today my primary expectation is for sellers to work into the overnight inventory to close the gap down to 4191.25. From there look for a move to test4173.50 before responsive buyers step in and two way trade ensues.
Hypo 2 buyers work up from the gap and trade up to 4224.25. Look for responsive sellers here and two way trade to ensue north of 4173.75.
Hypo 3 sellers accelerate down through the gap fill at 4191.25 and sustain trade below 4173.75 setting up a test below overnight low 4175.25. Look for responsive buyers around 4147.
Hypo 4 strong buying drives up through 4224.25 and moves to target 4247 before two way trade ensues.