Sunday, August 28, 2016
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Nobody Cares About GDP; Investors Eager To Know If Yellen Will Lift Rates in 2016

jhole

NASDAQ futures are coming into Friday slight gap down after an overnight session featuring normal range and volume.  Price traded a tight balance inside Thursday’s range for the duration of the Globex.  At 8:30am both Advance Trade Goods Balance and GDP came in better than expected.  There was no reaction to the news.

Investors are more interested to hear what Fed Chair Janet Yellen has to say at 10am, when she speaks from Jackson Hole.  Also on the economic docket we have U. of Michigan offering their final August reading of Confidence at 10am and the Baker Hughes rig count at 1pm.

Yesterday we printed a normal variation up.  Price opened gap down and after a brief probe of the week’s low buyers worked into the overnight inventory and closed the gap.  Then sellers stepped in and we balanced out–marking time until the close.

Heading into today my primary expectation is for buyers to push into the overnight inventory and close the gap up to 4782.50.  From here we continue higher, up through overnight high 4786.50 to 4808.50 before two way trade ensues.

Hypo 2 sellers push down through overnight low 4775.75 then test below the week’s low 4768.25 setting up a liquidation down to 4756.75 before two way trade ensues.

Hypo 3 strong buying takes us up to 4815 before two way trade ensues.

Levels:

08262016_NQ_MP

Volume profiles, gaps, and measured moves:

08262016_NQ_VPgapsMeasuredMoves

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Strong Economic Readings Rattle Investors Heading into Jackson Hole

FILE - In this May 7, 2010, file photo traders work on the floor of the New York Stock Exchange in New York. The Dow Jones industrials'  1,000 point nosedive the day before, along with Europe's spreading debt crisis and fraud charges against Goldman Sachs, are turning up the heat on Congress to get the nation's financial house under control. Two senators have proposed requiring the Securities and Exchange Commission and the Commodity Futures Trading Commission to scrutinize high-frequency trading and other computerized strategies that move buy and sell orders at blinding speeds, practices that may have contributed to Thursday's snowballing selloff.  (AP Photo/Richard Drew, File)

NASDAQ futures are coming into Thursday gap down after an overnight session featuring normal range and volume.  Price held Wednesday’s range while working lower.  At 8:30am Durable Goods orders came in well above expectations, and Initial/Continuing Jobless claims data was better than expected.

Also on the economic docket today we have Service/Composite PMI at 9:45am then a 7-year note auctino at 1pm.

Yesterday we printed a double distribution trend down.  This came on the heels of a failed auction Tuesday and confirmed the pattern, which will be considered a live pattern as long as price sustains below 4816.

Heading into today my primary expectation is for sellers to make an early push lower and attempt to trigger a liquidation.  This attempt ultimately fails, and we print a sharp reversal back up to 4800 before two way trade ensues as investors wait for Jackson Hole on Friday.

Hypo 2 buyers push into the overnight inventory off the open and close the gap up to 4787.50.  Buyers sustain trade above 4800 setting up a move to target 4808 before two way trade ensues.

Hypo 3 full-on liquidation, down to 4757 before two way trade ensues.

Levels:

082532016_NQ_MP

Volume profiles, gaps, and measured moves:

08252016_NQ_VPgapsMeasuredMoves

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Failed Auction Alert on NASDAQ

turmoil

NASDAQ futures are coming into Wednesday with a slight gap up after an overnight session featuring normal range and volume.  Price worked lower until about 3am, right down to the MCVPOC at 4805 before printing a v-shaped bounce back to Tuesday’s close.  At 7am MBA Mortgage Applications came in lower than last week’s reading.

Also on the economic calendar today we have Existing Home Sales at 10am, crude oil inventories at 10:30am, a 2-year Note auction at 11:30am, and a 5-year Note auction at 1pm.

Yesterday we printed a normal variation down after taking out swing high.  The nature of this move, taking out swing high then swiftly reversing, elevates the possibility of a failed auction, a price pattern that has marked inflection points in recent history.

Here’s a look at the potential failed auction on the NASDAQ:

Failed-auction-08242016

Note: the same event happened on the S&P 500 yesterday.

Heading into today my primary expectation is for sellers to push into the overnight inventory and take out overnight low 4805.25.  We’re going to test down through our balance and probe the other side of it, most likely, now that the topside has failed.  Look for a move down to 4796.50 before two-way trade ensues.

Hypo 2 buyers show up in the VPOC zone from 4805 – 4795 and we chop about in this region all day.

Hypo 3 buyers show up around 4812.50 and the push up through overnight high 4823.50.  They continue higher, up through Tuesday’s high 4836.75, effectively negating the failed auction.  Look for sellers up at 4839 and two way trade to ensue.

Levels:

082432016_NQ_MP

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NASDAQ Presses To Higher Prices Overnight

Traders call out trades on the floor of the Chicago Mercantile Exchange, April 25, 2007, after the Dow Jones industrial average cracked the 13,000 mark for the first time. The Dow leapt to an intraday record of 13,036.99 within minutes of the market's open, with investors also buoyed by data that showed orders for durable goods -- costly and long-lasting manufactured items -- rose more than expected in March.  REUTERS/John Gress (UNITED STATES) - RTR1P16Q

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range and volume on a grind higher that pushed price up into the 8/15 range, the day we put in our last swing higher.

The only scheduled economic event today comes at 9:45am when we hear the Manufacturing PMI reading.

Yesterday we printed a normal day.  The first hour of trade featured a strong impulsive buy and formed a wide initial balance.  The move was almost entirely erased before lunch when responsive sellers of a similar magnitude stepped in.  Ultimately the price started to coil as neither buyers nor sellers became initiative.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4812.50.  Look for responsive buyers here who push price back up through overnight high 4829.75 and target 4834 before two way trade ensues.

Hypo 2 sellers work gap fill down to 4812.50 then continue pushing down through overnight low 4807.75, them we chop around at the huge MCVPOC at 4806 for the rest of the day.

Hypo 3 strong buyers push up through overnight high 4829.75 then probe above swing high 4835.25.  Look for sellers up at 4839 and two way trade to ensue.

Hypo 4 strong sellers push all the way down to 4796.50  before two way trade ensues.

Levels:

08232016_BiasBook

Volume profiles, gaps, and measured moves:

08232016_NQ_VPgapsMeasuredMoves

 

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All Kinds of Balance: Big Ole’ Fat Balance

bubb-raining-balance

The NASDAQ was pushing a bit more aggressive today, both ways, in a manner of trade that resembles a slug fest between higher time frame buyers and sellers.

Either can claim victory on the session.  In the case of a draw and until further notice, the ‘W’ goes to the bulls.

However, the tape is showing the day-types the tend to occur at-or-near inflection points, peaks and troughs, the intermediate highs and lows.

Let’s run through the recent string of odd-ball occurrences, shall we?

  1. Monday, 8/8/2016 – the oddly named ‘Normal Day’ which happens about 6% of the time over the past 5 years (personal study).
  2. Thursday, 8/11 – another Normal Day
  3. Tuesday, 8/16 – Normal day
  4. Wednesday, 8/17 – Neutral Day (about 20% odds, or 1-in-5)
  5. Thursday, 8/18 – Neutral Day
  6. Today, Monday 8/22 – Normal Day

We have seen more normal days in the 11 trading days then we have all year.  Together they blob up to form this big ole’ fat drip-shaped balance:

balance-8-22

Funny how nature enjoys certain shapes and structures isn’t it?  Our good Italian friend Leonardo Fibonacci liked to write mathematical models of pine cones.  These days we build balance and trade the levels it produces.

The tear drop shape is a bit more clear when you view all trading activity through the lens old school, TPO market profile:

balance-8-22-mp

Writer’s note: Perhaps it looks more like an icicle, especially when you tilt your head to the left, but I’m really trying to make the Forrest Gump Headline/Photo combo work.

Markets in balance tend to stay in balance until acted upon by a force greater than the gravitational pull of the collected balance.

Writer’s note(2): I just made that up, but it has a nice ring to it, doesn’t it?

The higher time frame seemed active today, but neither participant showed any initiative.  Fade rips and dips back to the mean looks like the move until Jackson Hole.

The NASDAQ is liquid at these levels and has formed a fat balance.  Trade accordingly.

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Balance Play To Start The Trading Week

balance-meogee

NASDAQ futures are coming into Monday gap down after an overnight session featuring normal range and volume.  Price drifted lower until about 3am when a strong bid pushed the market up through Friday’s high briefly.  The auction then failed and reversed the entire move.

On the economic docket today we have a 3- and 6-month T-bill auction at 11:30am.

Last week we tested higher, then lower, but ultimately marked time on the NASDAQ.  Here are the returns of each major index last week:

08212016_IndexPerf

On Friday the NASDAQ printed a normal variation up.  The impulsive move higher late Friday morning was reversed then price worked higher to end the choppy session.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4807.  Look for sellers ahead of 4810 who work price down through the overnight low 4792.75.  Buyers step in around 4785 and 2-way trade ensues.

Hypo 2 sellers make a push off the open, take out overnight low 4792.75 and work lower, down to 4780.25 before two way trade ensues.

Hypo 3 strong buyers close gap up to 4807 then take out overnight high 4817.25 and continue up to close the 4822.75 gap before two way trade ensues.

Levels:

082232016_NQ_MP

Volume profiles, gaps, and measured moves:

08222016_NQ_VPgapsMeasuredMoves

Comments »

Happy Friday: US Treasury To Shed 10 NASDAQS on The Open

lewie

NASDAQ futures are coming into Friday gap down after an overnight session featuring normal range and volume.  Price worked lower overnight, down through yesterday’s low before settling into 2-way trade back inside Thursday’s range.

The economic calendar today literally only contains the Baker Hughes Rig count at 1pm.  There are no other economic events.  Not even low impact, non-eventful ones.  Baker Hughes will likely be a non-event.

For all intents and purposes, after 11am and aside from the 3:30 ramp, today is likely to be a non-event.

Yesterday we formed a neutral day.  We have been printing abnormal market profiles all week.  This tends to happen at-or-near inflection points.

Heading into today my primary expectation is for sellers to be active around 4800.  They go take out overnight low 4788 and push a liquidation down to 4780 before two way trade ensues.

Hypo 2 is for the overnight short sellers to be ransacked by a geyser of buy orders early on that push closed the overnight gap up to 4807.25.  Look for sellers up at 4810.50 and two way trade.

Hypo 3 strong buyers close gap up to 4807.25, sustain trade above 4811.25 setting up a move to close the gap up at 4822.75.

Hypo 4 full on liquidation takes us down to 4767.25 before two way trade ensues.

Levels:

081932016_NQ_MP

Volume profiles, gaps, and measured moves:

08192016_NQ_VPgapsMeasuredMoves

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NASDAQ To Open Lower By Five Points; Here’s What You Need To Know

SleepingBear

NASDAQ futures are coming into Thursday gap down after an overnight session featuring normal range and volume.  Price worked up through Wednesday’s high briefly before settling into balanced trade inside yesterday’s range.  At 8:30am Initial/Continuing jobless claims data came out mixed and the Philadelphia Fed reading was in line with expectations.

Also on the economic calendar today we have Leading Indicators at 10am and a 5-Year TIPS Reopening auction at 1pm.

Yesterday we formed a neutral extreme up.  Sellers were active on the open for a second consecutive day, aggressively driving price lower early on.  Then, briefly, they managed to extend price lower before finding a strong responsive bid before the FOMC minutes.

The bid pushed up through the day’s entire range, putting the market neutral.  Then FOMC minutes hit, third reaction yielded the buy signal, and we rallied through end of day, closing near the high making Wednesday a  neutral extreme day-type.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4803.50.  Sellers show up here and work price down through overnight low 4793.50.  A test of the excess low just below overnight low brings in a bid and two-way trade ensues.

Hypo 2 buyers close overnight gap up to 4803.50 then work through overnight high 4814 setting up a move to close the open gap up at 4822.75 before two way trade ensues.

Hypo 3 strong selling pushes down into the single prints below 4793.50 setting up a liquidation move to target 4780 before two way trade ensues.

Levels:

081832016_NQ_MP

Volume profiles, gaps, and measured moves:

08182016_NQ_VPgapsMeasuredMoves

Comments »

Key NASDAQ Prices To Watch Heading into The FOMC Minutes

FILE - In this May 7, 2010, file photo traders work on the floor of the New York Stock Exchange in New York. The Dow Jones industrials'  1,000 point nosedive the day before, along with Europe's spreading debt crisis and fraud charges against Goldman Sachs, are turning up the heat on Congress to get the nation's financial house under control. Two senators have proposed requiring the Securities and Exchange Commission and the Commodity Futures Trading Commission to scrutinize high-frequency trading and other computerized strategies that move buy and sell orders at blinding speeds, practices that may have contributed to Thursday's snowballing selloff.  (AP Photo/Richard Drew, File)

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring normal range and volume.  Price worked down to a new low on the week before finding a responsive bid back up to yesterday’s midpoint.

On the economic calendar today we have crude oil inventories at 10:30am followed by FOMC Meeting Minutes from the July 26-27 meeting.

Yesterday we printed the statistically rare normal day.  Sellers drove lower early yesterday morning after price opened gap down.  The initial balance was not breached for the rest of the day.  Near the end of the session a double low was formed at 4796.50.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4799.75.  They continue working lower, down through overnight low 4789.50 setting up a move to close the open gap down at 4781.25 before two way trade ensues.

Hypo 2 buyers show up around 4800 and work price up through overnight high 4809.75 and the market stalls out, goes range bound between 4810 and 4800.

Hypo 3 buyers push up through 4809.75 then sustain trade above it setting up a move to target Monday’s open gap up at 4822.75 before two way trade ensues.

Levels:

081732016_NQ_MP

Volume profiles, gaps, and measured moves:

08172016_NQ_VPgapsMeasuredMoves

Comments »

Stocks Give Back Monday Gains After Overnight Session Features Steady Decline

index-trump

NASDAQ futures are coming into Tuesday gap down after an overnight session featuring normal range and volume.  Price worked lower and took back most of Monday’s gains before settling into two-way trade.  At 8:30am the Consumer Price Index came in lower than expected and Housing Starts were above expectations.

Also on the economic docket today we have Industrial/Manufacturing Production at 9:15am, a 52-week and 4-week T-bill auction at 11:30am.

Yesterday we printed a normal variation up.  The week began with a gap up and buyers drove prices higher off the open.  Buyers attempted to continue exploring higher prices after lunch but stalled out after making a new high.  This introduced some responsive selling back down to the midpoint as the day ended.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4822.75.  From here buyers continue higher, up through overnight high 4825.50.  Look for responsive sellers around 4829.50 and two-way trade to ensue.

Hypo 2 sellers push down through overnight low 4811.50 and close the weekly gap down to 4804.25.  Buyers show up here and two-way trade ensues.

Hypo 3 strong sellers take out overnight low 4811.50, close gap down to 4804.25 then sustain trade below it setting up a move to target 4794.25 before two way trade ensues.

Hypo 4 strong buyers push up through overnight high 4825.50 then probe Monday’s high 4835.25.  Look for sellers up around 4841.25 and two-way trade to ensue.

Levels:

081632016_NQ_MP

Volume profiles, gaps, and measured moves:

08162016_NQ_VPgapsMeasuredMoves

Comments »