Nasdaq futures are running abnormally hot this morning with extreme range readings (beyond 2nd sigma) and abnormal volume. The market managed to 1 time frame down (price discovery) up until about 6am when buyers began defending just below the 3/13 swing low. At 8:30am initial/continuing jobless claim readings initially brought more selling in but have since reversed said losses.
Also on the economic calendar today is Markit Composite/Service PMI at 9:45am, Natural Gas storage stats at 10:30am, and Kansas City Fed Manufacturing activity at 11am. Keep in mind there are also some GPD readings out Friday before market open.
The market is currently pricing a pro gap down. Any attempt to fade this move would require significant resources. The open print will be way out of balance and is likely to encourage other time frame activity.
Taking to the charts, we can see sellers probing back into the upper-most distribution of our multi-month consolidation which precluded the latest rally. Now that we have pushed through its HVN (4285.25) it is likely we test down through the other side of it which would mean a move to about 4250.
Heading into today my primary expectation is for some whipsaw at the open before buyers make an attempt higher to work into the overnight inventory. Look for sellers to defend ahead of 4308.75 to set up a move below the overnight low 4270.
Hypo 2 is a full gap fill up to 4325.50.
Hypo 3 is a gap and go lower to continue the 1 time frame trending activity.
Hypo 4 is a push below overnight low 4270 which is met by responsive buying ahead of 4250 and we balance out on the lower end of the top distribution.
These levels are highlighted below: