The Calm Before The Storm

114 views

The economic calendar is quiet this morning but the week is back-loaded with events. Keep in mind Fed Chair Yellen is speaking around 8pm this evening about bank regulation. We also have ADP employment data tomorrow morning before the open.

Yesterday the Nasdaq opened gap up to start the week and sellers were not quite able to fill the overnight gap.   Instead buyers stepped in and made a strong drive up early on. Shortly after we went range extension up before falling back to the MID which lined up with the value area high from 2/26. Buyers then executed a second wave of buying, a completion wave. Overnight price has been drifting lower and spent several potions of the globex session trading 1-time frame down.

Heading into today my primary expectation buyers to push into the overnight inventory early on and target a gap fill up to 4478.50 then 2-way consolidation between 4478 and 4463.50.

Hypo 2 is sellers continue to push during the open, take out 4463.50 to test 4460.75. If no responsive buyers show then look for a fast push down the single prints to take out Monday’s low 4449.75. Look for responsive buying at 4447.25.

Hypo 3 is we push up through yesterday’s close 4478.75 and continue pushing higher prices.

Levels are highlighted below:

NQ_VPMP_03032015

Ease into March

166 views

Heading into the new month the Nasdaq is trading up a few points. The overnight auction has been on normal range and volume and shows sellers having the slight edge for most of the session. This is shown by rotation size and the weaker looking session low.

Heading into today, my primary expectation is for prices to close the overnight gap to 4448 and then test higher to the VPOC at 4457.75. Overnight high is also up there at 4458 if buyers can take out the ONH the look to continue and test swing high 4464.

Hypo 2 is sellers push down through Friday close 4448 and take out overnight low 4446.5. If buyers no show at 4440 mCVPOC then take out weak low at 4429.25 and target NVPOC 4418.

Levels:NQ_VPMP_02022015

Another Yellen Talk on Tap

301 views

Nasdaq futures drifted lower, down into the mid of yesterday on abnormally low volume and range. There seems to be little interest in conducting business during globex with the looming Yellen discussions and perhaps Friday’s GDP data on the horizon.

Today, as I mentioned above, Fed Chair Yellen will be testifying for a second day. Today she meets with the Financial Services Committee at 10am. We halso have month-over-month new home sales at 10am and oil/gas inventories at 10:30am.

The trend continued yesterday, intermediate term, where buyers are in control. The last few days have been buyer controlled. Yesterday we managed to briefly take out the prior session’s low 4429.75 before finding responsive buyers who took us to new swing high prices.

Heading into today, my primary expectation is for an open auction in range to push into the overnight inventory to close the gap up to 4450.25. From there I will see if buyers can take out yesterday high 4455.75. Above there I will look for signs of responsive selling.

Hypo 2 is seller push down through yesterday’s VAL 4442 to probe yesterday’s session low. Look for responsive buyers around 4430.

Hypo 3 is drive down, take out 4430 and target 4422.

These levels are highlighted below:

NQ_MPVP_02252015

Busy Tuesday Morning

407 views

The Nasdaq futures aren’t signaling we’re in store for a busy Tuesday, what with range and volume compressed well-below normal. But perhaps they are. Perhaps the volume and range are so abnormally low because everyone waits with bated breath to hear what The Fed Chair Yellen has to say both today and tomorrow. First she will talk with the US Senate at 10am. Atop this discussion we have Markit Composite PMI at 9:45am, and both Consumer Confidence and Richmond Fed MFG at 10am.

For all intents and purposes, the market doesn’t open until 10am.

Overnights low range pushed back to the 50% mid of the afternoon ramp before finding responsive buyers. Yesterday we printed a normal variation day with a small range extension up. The most prominent feature of yesterday’s session was a late-afternoon push which traversed nearly the entire range to close us out near the high of the session.

Intermediate term the Nasdaq is trading up at swing highs after a multi-month neutral consolidation. This timeframe is bullish.

Heading into today, my primary expectation is for balanced, 2-way chop. I will look for buyers to defend yesterday’s value area low 4436.25-35.25 and then make a push to test swing high 4449.25 and in particular the mezzo century figure 4450.

Hypo 2 is sellers accelerate down through yesterday’s VAL 4436.25-35.25 and push through yesterday’s low 4429.75. In this instance I will look for responsive buyers down at 4423-22.25 area. If they do not show then sellers will target the NVPOC at 4417.75 and perhaps overshoot down to 4413 LVN.

Hypo 3 is a strong push higher up through 4450 to continue the discovery process up.

Key levels can be seen below:

NQ_MPVP_02242015

Slow Down

585 views

The Nasdaq is starting the week flat after an abnormally docile overnight session. Both range and volume are compressed below normal which is even more radical given the longer duration of the Sunday/Monday globex session.

Last we the market started at swing highs and spent three days [one, Monday, a holiday] trading flat before making a two day upward thrust. Friday’s action resembled a trend day although not an exceedingly strong trend day.

We have Existing Home Sales at 10am and Dallas Fed at 10:30am. Traders are already looking forward to Tuesday and Wednesday when Fed Reserve Chair Yellen is set to testify before the U.S. Senate and House. They will be listening for any hint of when the Fed will raise interest rates.

Heading into today, my primary expectation is for balanced, two-way action. Sellers may push into the long inventory a bit to test down into Friday’s move. I will look for responsive buyers to defend from 4423 -4420 area.

Hypo 2 is buyers continue drifting the market higher and sustain trade above 4435.

Hypo 3 is a sharp move down through 4423-20 area to test 4413 then 4408.

See what I am seeing, below:

NQ_MPVP_02232015

Swing High Compression

471 views

The Nasdaq is up a touch, trading in the upper half of yesterday’s range. Price exceeded yesterday’s high briefly this morning on [untrue] reports of an agreement of sorts in Greece. The move went on to test the 4400 century mark before falling back into the weekly long value/balance we have formed.

At 8:30am Initial/Continuing Claims came out a touch worse than expected as was the revision to the prior number. This brought in a small bit of buying but nothing overly notable. At 10am we have Leading Indicators and the Philadelphia Fed, at 10:30am the Natural Gas Storage statistics, and at 11am Crude/Gas Inventory stats.

Wal-Mart reporting earnings this morning and they are often considered the purest data point to the overall health of the retail front in America. They are trading a touch lower premarket after beating earnings expectations and raising the dividend. The selling pressure may be attributed to their guidance where they cite the strong dollar as a potential headwind to forecasts.

As stated earlier, we are in 3 days of balance. This is occurring just after the market made new swing high and as we push through the monthly option expiration week. The action is in stark contrast to the rest of the year so far, which has featured large/fast ranges.

Heading into today’s session my primary expectation is for sellers to push into the overnight inventory and test down to 4382. Below here I will look for buyers to respond and start working toward yesterday’s high 4393.50.

Hypo 2 is sellers push down through the overnight low 4376. In this instance I will look for responsive buyers at 4372.75. They struggle to reclaim 4382 setting up a liquidation lower to target 4363.25 then the naked VPOC at 4360.00.

Hypo 3 is a variation of hypo 2 where the responsive buyers at 4372.75 hold and 2-way balance ensues a bit lower.

Hypo 4 is we drive and take out the overnight high 4400 century mark to target the measured move to 4417.50.

Levels are highlighted on the following charts:

NQ_MPVP_02192015

Waiting for The Fed

510 views

The Nasdaq is off to a slow start this week, and the tranquility continued into globex overnight where both range and volume compressed to below-normal levels. The overnight session is pressing its lows as we head into cash open after taking out yesterday’s high last night.

At 8:30am we have Housing Starts/Permits which came in worse than expected. We have Industrial Production stats just before the open at 9:15am and most importantly the FOMC minutes at 2pm.

After the holiday on Monday, yesterday we saw 2-way short timeframe participants performing the balance trade atop 2 weeks of rallying. Buyers managed to extend the range up slightly. Heading into today we are trading inside yesterday’s balance range.

Early on my primary expectation is for the two-way trade to continue. I will look for signs of a higher timeframe around the open, but they may not become active until the afternoon. I am looking for an open auction inside yesterday’s range to test down to 4272.25 before finding responsive buying back up to 4386.50. from there I will look for buyers to made a run at overnight high 4390.50.

Hypo 2 is sellers push through the low-end of yesterday’s range 4272 and continue working lower to target the naked VPOC at 4360 and then a stretch target of the gap to 4345.75.

Hypo 3 is buyers are aggressive early, take out overnight high 4390.50 and work toward the measured move target of 4417.50.

Note, the volume profiles and market profiles are quite similar today:NQ_MPVP_02182015

 

Changing Gears

741 views

Nasdaq futures were set adrift higher overnight after closing out the session at a new swing high. Volume and range are a bit light but still well within the confines of normal. The behavior has a 1-timeframe feel to it, never managing to put in a counter rotation of significant magnitude during the session.

We have U of M Confidence numbers at 10am. It is the preliminary read for February. Last month this data had an elevated impact on price. Fed Fisher is speaking at 1:30pm.

Yesterday the market had a “pro gap” up and didn’t give much of it back before working higher for most of the session. The resulting profile has an air pocket from 4335 – 4329 in what looks like a double distribution trend day.

Intermediate term we are bullish with a slight neutral skew given we are just above swing high. When the market takes out a major level I like to take my eyes out to a weekly chart of the composite to see what has happened. See below:

NQ_Weekly_02132015

My primary expectation heading into today is for sellers to push into the overnight inventory and work at a gap fill down to 4345.75. Sellers can penetrate yesterday’s range and work through the volume pocket 4335 – 4329 to ultimately target the naked VPOC at 4326.75.

Hypo 2 is sellers cannot press into yesterday’s range and we take out overnight high 4362 and continue exploring higher prices.

Hypo 3 is a gap and go drive higher.

Hypo 4 is stronger than expected selling which takes out the air pocket 4335 – 4329 early and works toward testing yesterday’s low4315 putting yesterday morning’s gap into play for a sharp reversal back into the multi-month range.

Key levels are highlighted below:

NQ_MPVP_02132015

Nasdaq Way Out in Front

425 views

As we draw near the close of the week, the Nasdaq performance is well out in front of the other indices, 3x as much performance as the Russell and 50% more performance than the S&P. The strength this week in shares of AAPL [4.31% this week] likely attributed to this behavior, but with bearish Friday on the horizon one has to wonder if the Nasdaq is bluffing or truly taking the reigns of this bull. One would be wise to keep a watchful eye on Apple.

Futures are higher as we head into cash open. There was a flurry of buying yesterday just after cash close as participants received more news about the Greek situation. The action came to an end just before 5pm after it tagged the Christmas Eve (12/26) HOD 4322 to the tick. We then reversed lower and cut into yesterday’s range a bit, down just below the MID 4288.75 before reversing and trading all the way back up through the 4322 high.  Despite the seemly big overnight action, the range managed to stay 1st sigma, although range is elevated to slightly abnormal 2nd sigma levels.

Price was at this level when Advance Retail Sales came out well below consensus. The bad news received a positive reaction. Bad news-positive reaction is a v.bullish behavior.

We are trading on the upper end of a range dating back to late October. The market behavior leading up to today would lead one to expect range high to be defended, sending us back lower. However, the range is mature, thus it is possible we shift into a discovery phase up.

The market profile structures leading into today are anything but normal. We have printed FOUR neutral days in a row, and several more in the last few days. This speaks volumes to the compression taking place and the battles it’s creating.

Early on I will look for sellers to press into this overnight inventory and work back to around 4305. There I will look for responsive buyers to take us back to to target the overnight high 4325.50 and close the gap up at 4333.

Hypo 2 is buyers are more aggressive on the open and drive higher at the start, take out 4333 early and look to make new swing high.

Hypo 3 is sellers push down into yesterday range and close the overnight gap to below 4298.25, and continue lower to target the overnight low 4285.75.

These levels are highlighted below:

NQ_VP_02122015 NQ_MP_02122015_choppedandscrewed

Time for Buyers To Prove Their Grit

388 views

Nasdaq futures are trading flat as we come into the cash session. Range compressed down to an abnormal sub-1st sigma range on low, but normal volume. We traded in the upper quad of yesterday’s range.

A few of the bigger players who reported earnings this morning are trading higher (PEP, TWX, ING) and the economic calendar does not have any major events for today. Fed Fisher is speaking in New York to economists, he has been doing so since 8am. We have oil/gas inventory stats at 10:30am and at 2pm we have the Monthly Budget Statement.

Yesterday we opened gap up from Monday’s neutral day. Buyers defended re-entry into Monday’s range and then the market began one-time frame trading higher for the rest of the session. The print was technically a neutral extreme due to the double range extension but the formations of value areas along the way and subsequent breaks higher looked more like a trend day.

Price exceeded Last Friday’s high and pushed into the large value distribution at the top of our intermediate term range. At this point we are on the high end of range and traders will be on watch for signs of an aggressive seller entrant. Over these next several days, buyers are tasked with proving their initiative, otherwise one is more wise to assume the current market behavior of bracket-range will continue.

My primary expectation heading into today is for choppy, 2-way action with a buying skew. Price will look to target the MCHVN at 4285.25 and continue higher to target 4293. Stretch targets are 4300 and 4302.50.

Hypo 2 is sellers us down the zipper to 4262.50 where we find responsive buyers who manage to take out yesterday’s HOD 4284 but not much more and begin the process of cutting into yesterday’s gains targeting 4254.25 then 4240.50 with a stretch target of 4233.25.

Hypo 3 is strong buyers off the open who press up through 4290 early and then put together a second leg up to test 4302.50.

These levels can be seen below:

NQ_MPVP_02112015

The Calm Before The Storm

114 views

The economic calendar is quiet this morning but the week is back-loaded with events. Keep in mind Fed Chair Yellen is speaking around 8pm this evening about bank regulation. We also have ADP employment data tomorrow morning before the open.

Yesterday the Nasdaq opened gap up to start the week and sellers were not quite able to fill the overnight gap.   Instead buyers stepped in and made a strong drive up early on. Shortly after we went range extension up before falling back to the MID which lined up with the value area high from 2/26. Buyers then executed a second wave of buying, a completion wave. Overnight price has been drifting lower and spent several potions of the globex session trading 1-time frame down.

Heading into today my primary expectation buyers to push into the overnight inventory early on and target a gap fill up to 4478.50 then 2-way consolidation between 4478 and 4463.50.

Hypo 2 is sellers continue to push during the open, take out 4463.50 to test 4460.75. If no responsive buyers show then look for a fast push down the single prints to take out Monday’s low 4449.75. Look for responsive buying at 4447.25.

Hypo 3 is we push up through yesterday’s close 4478.75 and continue pushing higher prices.

Levels are highlighted below:

NQ_VPMP_03032015

Ease into March

166 views

Heading into the new month the Nasdaq is trading up a few points. The overnight auction has been on normal range and volume and shows sellers having the slight edge for most of the session. This is shown by rotation size and the weaker looking session low.

Heading into today, my primary expectation is for prices to close the overnight gap to 4448 and then test higher to the VPOC at 4457.75. Overnight high is also up there at 4458 if buyers can take out the ONH the look to continue and test swing high 4464.

Hypo 2 is sellers push down through Friday close 4448 and take out overnight low 4446.5. If buyers no show at 4440 mCVPOC then take out weak low at 4429.25 and target NVPOC 4418.

Levels:NQ_VPMP_02022015

Another Yellen Talk on Tap

301 views

Nasdaq futures drifted lower, down into the mid of yesterday on abnormally low volume and range. There seems to be little interest in conducting business during globex with the looming Yellen discussions and perhaps Friday’s GDP data on the horizon.

Today, as I mentioned above, Fed Chair Yellen will be testifying for a second day. Today she meets with the Financial Services Committee at 10am. We halso have month-over-month new home sales at 10am and oil/gas inventories at 10:30am.

The trend continued yesterday, intermediate term, where buyers are in control. The last few days have been buyer controlled. Yesterday we managed to briefly take out the prior session’s low 4429.75 before finding responsive buyers who took us to new swing high prices.

Heading into today, my primary expectation is for an open auction in range to push into the overnight inventory to close the gap up to 4450.25. From there I will see if buyers can take out yesterday high 4455.75. Above there I will look for signs of responsive selling.

Hypo 2 is seller push down through yesterday’s VAL 4442 to probe yesterday’s session low. Look for responsive buyers around 4430.

Hypo 3 is drive down, take out 4430 and target 4422.

These levels are highlighted below:

NQ_MPVP_02252015

Busy Tuesday Morning

407 views

The Nasdaq futures aren’t signaling we’re in store for a busy Tuesday, what with range and volume compressed well-below normal. But perhaps they are. Perhaps the volume and range are so abnormally low because everyone waits with bated breath to hear what The Fed Chair Yellen has to say both today and tomorrow. First she will talk with the US Senate at 10am. Atop this discussion we have Markit Composite PMI at 9:45am, and both Consumer Confidence and Richmond Fed MFG at 10am.

For all intents and purposes, the market doesn’t open until 10am.

Overnights low range pushed back to the 50% mid of the afternoon ramp before finding responsive buyers. Yesterday we printed a normal variation day with a small range extension up. The most prominent feature of yesterday’s session was a late-afternoon push which traversed nearly the entire range to close us out near the high of the session.

Intermediate term the Nasdaq is trading up at swing highs after a multi-month neutral consolidation. This timeframe is bullish.

Heading into today, my primary expectation is for balanced, 2-way chop. I will look for buyers to defend yesterday’s value area low 4436.25-35.25 and then make a push to test swing high 4449.25 and in particular the mezzo century figure 4450.

Hypo 2 is sellers accelerate down through yesterday’s VAL 4436.25-35.25 and push through yesterday’s low 4429.75. In this instance I will look for responsive buyers down at 4423-22.25 area. If they do not show then sellers will target the NVPOC at 4417.75 and perhaps overshoot down to 4413 LVN.

Hypo 3 is a strong push higher up through 4450 to continue the discovery process up.

Key levels can be seen below:

NQ_MPVP_02242015

Slow Down

585 views

The Nasdaq is starting the week flat after an abnormally docile overnight session. Both range and volume are compressed below normal which is even more radical given the longer duration of the Sunday/Monday globex session.

Last we the market started at swing highs and spent three days [one, Monday, a holiday] trading flat before making a two day upward thrust. Friday’s action resembled a trend day although not an exceedingly strong trend day.

We have Existing Home Sales at 10am and Dallas Fed at 10:30am. Traders are already looking forward to Tuesday and Wednesday when Fed Reserve Chair Yellen is set to testify before the U.S. Senate and House. They will be listening for any hint of when the Fed will raise interest rates.

Heading into today, my primary expectation is for balanced, two-way action. Sellers may push into the long inventory a bit to test down into Friday’s move. I will look for responsive buyers to defend from 4423 -4420 area.

Hypo 2 is buyers continue drifting the market higher and sustain trade above 4435.

Hypo 3 is a sharp move down through 4423-20 area to test 4413 then 4408.

See what I am seeing, below:

NQ_MPVP_02232015

Swing High Compression

471 views

The Nasdaq is up a touch, trading in the upper half of yesterday’s range. Price exceeded yesterday’s high briefly this morning on [untrue] reports of an agreement of sorts in Greece. The move went on to test the 4400 century mark before falling back into the weekly long value/balance we have formed.

At 8:30am Initial/Continuing Claims came out a touch worse than expected as was the revision to the prior number. This brought in a small bit of buying but nothing overly notable. At 10am we have Leading Indicators and the Philadelphia Fed, at 10:30am the Natural Gas Storage statistics, and at 11am Crude/Gas Inventory stats.

Wal-Mart reporting earnings this morning and they are often considered the purest data point to the overall health of the retail front in America. They are trading a touch lower premarket after beating earnings expectations and raising the dividend. The selling pressure may be attributed to their guidance where they cite the strong dollar as a potential headwind to forecasts.

As stated earlier, we are in 3 days of balance. This is occurring just after the market made new swing high and as we push through the monthly option expiration week. The action is in stark contrast to the rest of the year so far, which has featured large/fast ranges.

Heading into today’s session my primary expectation is for sellers to push into the overnight inventory and test down to 4382. Below here I will look for buyers to respond and start working toward yesterday’s high 4393.50.

Hypo 2 is sellers push down through the overnight low 4376. In this instance I will look for responsive buyers at 4372.75. They struggle to reclaim 4382 setting up a liquidation lower to target 4363.25 then the naked VPOC at 4360.00.

Hypo 3 is a variation of hypo 2 where the responsive buyers at 4372.75 hold and 2-way balance ensues a bit lower.

Hypo 4 is we drive and take out the overnight high 4400 century mark to target the measured move to 4417.50.

Levels are highlighted on the following charts:

NQ_MPVP_02192015

Waiting for The Fed

510 views

The Nasdaq is off to a slow start this week, and the tranquility continued into globex overnight where both range and volume compressed to below-normal levels. The overnight session is pressing its lows as we head into cash open after taking out yesterday’s high last night.

At 8:30am we have Housing Starts/Permits which came in worse than expected. We have Industrial Production stats just before the open at 9:15am and most importantly the FOMC minutes at 2pm.

After the holiday on Monday, yesterday we saw 2-way short timeframe participants performing the balance trade atop 2 weeks of rallying. Buyers managed to extend the range up slightly. Heading into today we are trading inside yesterday’s balance range.

Early on my primary expectation is for the two-way trade to continue. I will look for signs of a higher timeframe around the open, but they may not become active until the afternoon. I am looking for an open auction inside yesterday’s range to test down to 4272.25 before finding responsive buying back up to 4386.50. from there I will look for buyers to made a run at overnight high 4390.50.

Hypo 2 is sellers push through the low-end of yesterday’s range 4272 and continue working lower to target the naked VPOC at 4360 and then a stretch target of the gap to 4345.75.

Hypo 3 is buyers are aggressive early, take out overnight high 4390.50 and work toward the measured move target of 4417.50.

Note, the volume profiles and market profiles are quite similar today:NQ_MPVP_02182015

 

Changing Gears

741 views

Nasdaq futures were set adrift higher overnight after closing out the session at a new swing high. Volume and range are a bit light but still well within the confines of normal. The behavior has a 1-timeframe feel to it, never managing to put in a counter rotation of significant magnitude during the session.

We have U of M Confidence numbers at 10am. It is the preliminary read for February. Last month this data had an elevated impact on price. Fed Fisher is speaking at 1:30pm.

Yesterday the market had a “pro gap” up and didn’t give much of it back before working higher for most of the session. The resulting profile has an air pocket from 4335 – 4329 in what looks like a double distribution trend day.

Intermediate term we are bullish with a slight neutral skew given we are just above swing high. When the market takes out a major level I like to take my eyes out to a weekly chart of the composite to see what has happened. See below:

NQ_Weekly_02132015

My primary expectation heading into today is for sellers to push into the overnight inventory and work at a gap fill down to 4345.75. Sellers can penetrate yesterday’s range and work through the volume pocket 4335 – 4329 to ultimately target the naked VPOC at 4326.75.

Hypo 2 is sellers cannot press into yesterday’s range and we take out overnight high 4362 and continue exploring higher prices.

Hypo 3 is a gap and go drive higher.

Hypo 4 is stronger than expected selling which takes out the air pocket 4335 – 4329 early and works toward testing yesterday’s low4315 putting yesterday morning’s gap into play for a sharp reversal back into the multi-month range.

Key levels are highlighted below:

NQ_MPVP_02132015

Nasdaq Way Out in Front

425 views

As we draw near the close of the week, the Nasdaq performance is well out in front of the other indices, 3x as much performance as the Russell and 50% more performance than the S&P. The strength this week in shares of AAPL [4.31% this week] likely attributed to this behavior, but with bearish Friday on the horizon one has to wonder if the Nasdaq is bluffing or truly taking the reigns of this bull. One would be wise to keep a watchful eye on Apple.

Futures are higher as we head into cash open. There was a flurry of buying yesterday just after cash close as participants received more news about the Greek situation. The action came to an end just before 5pm after it tagged the Christmas Eve (12/26) HOD 4322 to the tick. We then reversed lower and cut into yesterday’s range a bit, down just below the MID 4288.75 before reversing and trading all the way back up through the 4322 high.  Despite the seemly big overnight action, the range managed to stay 1st sigma, although range is elevated to slightly abnormal 2nd sigma levels.

Price was at this level when Advance Retail Sales came out well below consensus. The bad news received a positive reaction. Bad news-positive reaction is a v.bullish behavior.

We are trading on the upper end of a range dating back to late October. The market behavior leading up to today would lead one to expect range high to be defended, sending us back lower. However, the range is mature, thus it is possible we shift into a discovery phase up.

The market profile structures leading into today are anything but normal. We have printed FOUR neutral days in a row, and several more in the last few days. This speaks volumes to the compression taking place and the battles it’s creating.

Early on I will look for sellers to press into this overnight inventory and work back to around 4305. There I will look for responsive buyers to take us back to to target the overnight high 4325.50 and close the gap up at 4333.

Hypo 2 is buyers are more aggressive on the open and drive higher at the start, take out 4333 early and look to make new swing high.

Hypo 3 is sellers push down into yesterday range and close the overnight gap to below 4298.25, and continue lower to target the overnight low 4285.75.

These levels are highlighted below:

NQ_VP_02122015 NQ_MP_02122015_choppedandscrewed

Time for Buyers To Prove Their Grit

388 views

Nasdaq futures are trading flat as we come into the cash session. Range compressed down to an abnormal sub-1st sigma range on low, but normal volume. We traded in the upper quad of yesterday’s range.

A few of the bigger players who reported earnings this morning are trading higher (PEP, TWX, ING) and the economic calendar does not have any major events for today. Fed Fisher is speaking in New York to economists, he has been doing so since 8am. We have oil/gas inventory stats at 10:30am and at 2pm we have the Monthly Budget Statement.

Yesterday we opened gap up from Monday’s neutral day. Buyers defended re-entry into Monday’s range and then the market began one-time frame trading higher for the rest of the session. The print was technically a neutral extreme due to the double range extension but the formations of value areas along the way and subsequent breaks higher looked more like a trend day.

Price exceeded Last Friday’s high and pushed into the large value distribution at the top of our intermediate term range. At this point we are on the high end of range and traders will be on watch for signs of an aggressive seller entrant. Over these next several days, buyers are tasked with proving their initiative, otherwise one is more wise to assume the current market behavior of bracket-range will continue.

My primary expectation heading into today is for choppy, 2-way action with a buying skew. Price will look to target the MCHVN at 4285.25 and continue higher to target 4293. Stretch targets are 4300 and 4302.50.

Hypo 2 is sellers us down the zipper to 4262.50 where we find responsive buyers who manage to take out yesterday’s HOD 4284 but not much more and begin the process of cutting into yesterday’s gains targeting 4254.25 then 4240.50 with a stretch target of 4233.25.

Hypo 3 is strong buyers off the open who press up through 4290 early and then put together a second leg up to test 4302.50.

These levels can be seen below:

NQ_MPVP_02112015

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