Time To End January

174 views

Nasdaq futures are lower as we head into cash open on an abnormal 50 point range and normal volume. At 8:30am the GDP data released was below expectations and we saw a brief pop in futures which was ultimately faded. As we come into the opening bell prices are on the low of the globex session.

Yesterday buyers were put on their heels early in the session as price pushed down into the lower edge of a multi week range and managed to turn. Price then took back more than half of the selling on Wednesday to finish the day up near the highs. Overall the week has been seller dominated since the big gap down on Tuesday.

Heading into today, my primary expectation is for buyers to push into the overnight inventory and work up to 4171.50. Here I will be looking for signs of responsive sellers (responsive relative to the opening print, initiative in nature verse yesterday’s close). They will look to target the MCVPOC at 4144.50 where we will churn through lunch.

Hypo 2 is sellers drive off the open push down through MCVPOC 4144.50 down to 4125.75 where we find responsive buyers back up to MCVPOC 4144.50 and churn through lunch.

Hypo 3 is stronger buyers push on the open, take out 4171.50 and target a full gap fill up to 4185.75. If they can sustain price above 4171.50 then look to target overnight high 4208 and stretch target of MCHVN 4233.25.

Hypo 4 is a drive down, take out 4125.75 and target a break of Thursday’s low 4095.75.

Levels:

01302015_NQ_VP

01302015_NQ_MP

The Quiet Overnight Session

95 views

Nasdaq futures printed a balanced session overnight on normal range and volume. After a brief pop late Wednesday evening, price pushed lower and took out Wednesday’s low 4123.25 and found responsive buyers just ahead of the 1/20 low at 4109. Since then price has traded in a quiet 2-way manner. Earnings have sent the share price of BABA lower as well as CELG. COP is trading a bit higher. We have reports out of GOOGL and AMZN after market close. The Initial/Continuing jobless claims data at 8:30am came in a bit better than expected and we saw a bit of buying on the news.

Turning to the charts, sellers are in control on the short term timeframe. Yesterday we printed an outside day after starting the day gap up above Tuesday’s range and trading all the way though it and closing on the lows. Intermediate term is neutral as we continue working through a multi week range.

Just below the overnight low 4111.25 are some interesting price levels dating back to the last swing low. In particular, the naked VPOC at 4101.25 which we left behind when we turned upward. This level will be interesting to observe if sellers step in this AM.

Early on my primary expectation is for an open auction inside Wednesday’s range which gives way to selling. Sellers will look to take out the overnight low 4111.25 and continue down to test the NVPOC at 4101.25 where we find responsive buyers who work back into Friday’s range and up toward the MCVPOC at 4144.50.

Hypo 2 is buyers push early on and stall out near the MCVPOC 4144.25 churn a bit, before initiative sellers step in and work us lower to target overnight low 4111.25 and potentially the NVPOC at 4101.25.

Hypo 3 is an open drive higher, take out the MCVPOC at 4144.50 and continue higher to test the scene of the FOMC breakdown up at about 4172.

Hypo 4 is we drive lower and take out the NVPOC at 4101.25 and tag the MCLVN at 4083.25, if no responsive buying there then continue lower to the CHVN at 4053.75.

I have highlighted the above levels on the following volume profile chart:

NQ_01292015_trades

Pro Gap, Rule 48 Invoked

241 views

Several weak economic data points, weak reaction to earnings in MSFT and CAT and PG, and overall sentiment have the Nasdaq down over 50 points as we approach cash trade. This is pro gap territory. Interestingly, though the range is 2nd sigma aka abnormal, it took place on a normal amount, or 1st sigma volume. Typically these big down sessions carry some heavy volume.

At 8:30am Durable goods Orders came in much lower than expected. At 9am we have the Case-Shiller Composite, at 9:45am Markit Composite/Service PMI, and at 10am Consumer Confidence, Richmond Fed, and New Home Sales. After the bell we will hear earnings from Apple.

The NYSE is invoking Rule 48 on the market open, which may make for a choppy open.

Value started to overlap between Friday and Monday but heading into the close it seemed the market was not doing a very good job rolling over. Sellers did manage to take out Friday’s low and we had some excess wick on the upper end of the candles, but value was holding. However the overnight session has pushed us down below the Sunday-Monday Globex session low and back to where prices were the morning we heard from the ECB. It will be interesting to see if the buyers defend this level so soon after capturing it.

Early on I am looking for buyers to work into the overnight inventory and push up to the naked VPOC at 4226.50. In this level I expect to see sellers stepping in and defending and then pushing back lower to take out the overnight low 4202 and test deeper into the morning of the ECB, targeting 4171.50.

Hypo 2 is gap and go drive down. Sellers drive off the open and push through Thursday’s range to test the low at4164.50.

Hypo 3 is choppy, 2-way trade through much of the session as the market pauses ahead of AAPL earnings and tomorrow afternoon’s FOMC meeting.

NQ_MarketProfile_01272015 01272015_NQ_VP

Interesting Overnight Action To Start The Week

122 views

Buyers are showing some aggression as we approach cash open in the Nasdaq. The session started off weak Sunday evening with some attributing the move to the outcome of the Greek elections. The move lower around 6pm Sunday took place on light volume and buyers defended the upper edge of value formed Thursday afternoon. Once the globex auction turned around it spent the rest of the session slowly churning higher.

This week’s economic calendar starts off slow and builds in complexity. We have tons of earnings out and a heavy calendar of economic stats. Today we have Dallas Fed at 10:30am and Microsoft reporting after the bell.

Taking to the charts, we can see the Nasdaq went on a four day unidirectional streak to the upside, with Friday’s profile forming a balance on top of the range.  Typically after three days of trade in one direction we start to see price action become more two-way. After four days it becomes even more likely.

Price has so far managed to push up to the upper third distribution of volume. The current micro composite structure as we form this big range has three distinct areas of value with air pockets in between. These air pockets zones are where we see the dramatic, discovery-type moves take place. We could see downside action gain speed, given our current location. See below:

01262015_NQ_VP

So far sellers are defending the upper region of value. Whether they can continue doing so will be my primary focus this morning. My primary expectation this morning is for a choppy, two way auction on the open with sellers a bit more aggressive. They work to fill the overnight gap to 4268 and test the lower end of Friday’s value 4255-4253.75 where we see responsive buyers. These buyers than work up toward the MCHVN at 4285.25 and potentially test above Friday’s high to tag the HVN at 4293.50.

Hypo 2 is buyers active, perhaps not allowing the overnight gap fill to 4268 before making a move to take out Friday’s high 4286.50 and testing up to 4300 where we find responsive sellers and balance out.

Hypo 3 is sellers extend below 4254 and work down through the air pocket to target the overnight low 4231.50 and the naked VPOC below it at 4226.50. I have highlighted my key market profile levels below:

NQ_MarketProfile_01262015

Feels Different Today

214 views

Yesterday afternoon we started to see a behavioral shift from the marketplace. The Nasdaq slowed down and flagged about, much like it did last Friday. The violent waves as we explored the southern tip of the charts opened up to a peaceful, calm, quiet pond. Whether this behavior sticks is unknown but the change has so far carried over into Globex. Overnight the Nasdaq traded on the low end of its normal range on normal volume. Prices drifted above yesterday’s cash highs briefly before finding responsive sellers.

Last night the biggest post-earnings price action was seen in SBUX which traded higher after reporting. At 8:30am we had Chicago Fed Activity and it brought some selling in. At 9:45am we have Markit PMI stats set for release. This announcement shortly after the open may induce some early chop. We also have Existing Home Sales and leading indicators at 10am.

Yesterday was the third straight day of advance in the Nasdaq and price action tends to become a bit rocky on the fourth session. However, bulls have done well to negate the intermediate term seller control, pushing us back into a more neutral-to-bullish stance. We are currently trading in the upper pocket of our triple volume distribution, see below:

01232015_NQ_VPnaked

Drilling a bit closer to the action, we can see prices are coming into the lower end of a large balance area above. It makes sense to expect some overhead supply in this region. Given the pocket-nature of our current trade location, we might still see some speed in the market.

Early on, I am expecting a choppy open auction, inside Thursday’s range before buyers make an attempt at the overnight high 4275.25. Not far above there I will be looking for signs of responsive sellers who work us back below Thursday’s close 4266 and choppy-two way action takes hold.

Hypo two is sellers a bit more aggressive on the open, pushing us over the ledge at 4258.25 and sliding us down through most of the afternoon push higher to test it’s starting point down at 4235.

Hypo 3 is strong bulls push up through 4277.75 and begin exploring the upper balance zone.

These levels can be seen below:

NQ_MarketProfile_01232015 01232015_NQ_VP

Now We Wait

186 views

Nasdaq futures are lower as we head toward cash open. The range and volume associated with the move are about as normal as it comes, both falling right in the middle of their respective Gaussian distributions. Price managed to take out yesterday’s cash high 4175.25 for a while but eventually traded lower. Yesterday evening’s big surprise came from NFLX earnings, which propelled the stock much higher in after-hours trade. The Presidential State of The Union had little effect on index price. Just ahead of the 8:30am housing-type data we saw a run-up in prices which has subsequently faded off/traded flat since.

Yesterday we were gap up to start the week (on a Tuesday) and subsequently faded lower for much of the morning. It was only when price attempted to enter the value zone established when combining last Thursday and Friday that we saw a sharp responsive buyer. Their behavior was strong enough that it reversed the auction process in the opposite direction and we ended the day with a Neutral Extreme print.

The Neutral Extreme print carries strong directional conviction, second only to the trend, or, conviction day. Contributing to the validity of this structure was an end-of-day VPOC shift to the high end of the range. Calling the strength into question is cumulative delta, which, could not manage to stay positive.

Heading into today, my expectation is for buyers to push early on to close the overnight gap to 4167.25 then struggle a bit with 4171.50 before working to take out overnight high 4178.50 and targeting 4184.25 where we see sharp responsive selling.

Hypo 2 is sellers on the open work down to take out overnight low 4149 and target 4146 – 4142 where we see responsive selling and then an attempt at filling the overnight gap.

Hypo 3 is a stronger buying drive early on that takes out 4184.75 early on and opens the door to run up the zipper to 4229.75.

Hypo 4 is strong sellers take out 4142.50 and work back down into Tuesday’s lower distribution and target 4127.50.

These levels are on the following charts:

01212015_NQ_VP

NQ_MarketProfile_01212015

State of The Nasdaq

147 views

Nasdaq futures are higher overnight on a slow-grind type session of trade. As we head into cash open sellers are recapturing some of the progress. The gap up to start the week has been a common feature the last several weeks; a common feature which gives way to selling. Whether that continues to be the case this week will be interesting to observe. Range is on the high end of normal for a globex session and volumes are running in the 2nd sigma.

At 10am we have the NAHB Hosing Market Index as well as Fed’s Powell speaking. The housing data may carry an elevated impact on market prices after the weak showing from the Residential Construction industry last week. Several of the premarket earnings came in well. After hours, two of the majors we will hear from are IBM and NFLX. We also have a Presidential State of the Union Address set for 9pm. More housing stats are set for release in the premarket tomorrow.

Prices are trading inside a big area of acceptance currently, the microcomposite VPOC sits right at 4144.50. These high-volume areas tend to produce murky, choppy trading action. On either edge of this value we have volume pockets which are where the greater opportunity for trend-like behavior resides. Overall, the intermediate term timeframe is neutral-to-bearish. See below:

01202015_NQ_VP

Short term we are gap up with some magnets below. Early on my expectation is for sellers to push into the overnight inventory and take us back to the MCVPOC at 4144.50 and continue lower to close the open gap down to 4134.75. I will look for signs of responsive sellers here (responsive relative to the overnight session, initiative relative the Friday) who work toward taking out the overnight high 4168.

Hypo 2 is buyers enter aggressive early and take out overnight high 4168.25 and continue higher to 4184 and possibly trend through that area.

Hypo 3 is sellers close the overnight gap 4134.75 and continue lower to 4120 area. I have highlighted these areas on the following market profile chart:
NQ_MarketProfile_10202015

The Only Way Out Is Work

172 views

Nasdaq futures are lower overnight and as we come into cash open price are hovering just below Thursday’s range. Volume and range remain 2nd sigma elevated as the aftershocks continue to rip though global markets after an unexpected move from the SNB.

We came into the globex session with sellers pushing and the continued to do so into the afternoon and evening yesterday. INTC earnings were inline yesterday but shares still traded lower which may have contributed. Price pressed into the open gap from 10/27 before finding responsive buyers ahead of a closing of the range gap. Buyers pushed up but were unable to reclaim Thursday’s low 4077.75. We then revisited, but did not take out, the globex lows giving the session a weak looking low.

At 8:30am CPI data brought some buyers into the market who again struggled to reclaim Thursday’s lows.

We had Industrial/MFG production numbers out at 9:15am. We also have U of M Confidence at 10am, Fed’s Williams speaking at 11am, and Fed’s Bullard set to speak at 1:10am. The markets are also cruising into a long weekend as they will be closed Monday in observation of MLK.

Yesterday’s session featured sellers continuing to control the action. There was an interesting shelf formation at 4106.75 which served as a pivot for much of the session. Sellers eventually claimed victory of the area. Early on my primary expectation is for buyers to work into this overnight (short) inventory and close the overnight gap to 4089 to target the VPOC at 4095.25. There I am looking for responsive sellers to step in and continue driving lower. A return to the scene of the CPI bounce at 4061 puts us at the overnight midpoint. From there we continue to take out overnight low 4041.50 and close the range gap to 4040 then the full gap to 4033.

Hypo 2 is sellers drive off the open and run into a bit of demand at 4061 but overrun it and go fill the gap at 4040 then 4033 and overshoot to tag the NVPOC at 4028.

Hypo 3 is sellers early who are defended away above 4061 and buyers push the gap fill and retake the shelf pivot at 4106.75 to set up another leg higher.

You can see these price levels below:

01162015_NQ_VP_midday

NQ_MarketProfile_10162015

Strange Overnight Session Merits Caution

172 views

Volume and range shot well beyond second sigma overnight. This is a clear signal that what you are seeing taking place in the markets this morning is anything but normal. The primary driver of this volatility was forex macro moves resulting from an unexpected move by the Swiss National Bank.

Also occurring overnight was a move higher in oil. This morning the markets are dealing with more earnings from big banks who one after another are seeing share prices lose value post earnings. BAC is trading lower as is C although Citi is currently holding its prior lows.

At 8:30am the economic data including initial/continuing jobless claims, PPI, and Empire Manufacturing brought in some buyers who were quickly faded. This afternoon after market close we will here from INTC while the entire semiconductor industry teeters on the edge of a breakdown. We also have many more banks set to report tomorrow morning and CPI before market open.

Turning our attention to the auction, we can see some weak shelving occurring right at 4106.75. This level will be a big tell today. My initial expectation is we ‘spill over’ the shelf which opens the door for a test of the overnight lows which puts us in range of testing the prior swing lows and the Nasdaq on the cusp of breaking lower. See the context below:

NQ_MarketProfile_10152015

The intermediate term shows sellers controlling the market.

Yesterday the market continued trading lower until we closed to open gap from 01/06. Once we hit these levels a sharp buying response took hold and saw some continuation off the value zone around 4118.75. Buyers were unable to push through the early highs of the session during the afternoon ramp but did see their progress carry through into the overnight session.

The overnight session carried over 100 points of range and as we approach cash open we are trading right near the midpoint of that range. Early on I am looking the yesterday’s VPOC at 4138 as a short term pivot. If sellers can sustain trade below this level that adds confidence to my primary expectation for trade to take out the market profile shelf at 4106.75 (seen above).

Hypothesis 2 is strong buyers off the open who take out yesterday’s session high 4159 and continue probing higher into the volume pocket at 4171.50 and a continued auction higher to target overnight high 4190.

Hypo 3 is a slow open auction inside yesterday’s range and then 2-way chop between 4171.50 and 4118 which eventually gives way lower during the lunch hour.

I have highlighted these levels on the following volume profile chart:

01152015_NQ_VP

Working With The Pro Gap

156 views

Nasdaq volume and range went 2nd sigma overnight as the index traded lower for much of the session. As we approach cash open prices are below Tuesday’s range and we are in a “pro gap” type environment. The selling accelerated at 8:30am when weaker-than-expected Advance Retail Sales data hit the wires. We also had an corrective-type event in copper prices, the Japanese Yen is very active, and JPM missed earnings. WFC is trading lower premarket as well after reporting earnings.

Today we have crude oil inventory stats out at 10:30am. The weekly report is likely to be closely followed by all speculators as the commodity continues to correct lower. We also have Business Inventories at 10am and the Fed Beige Book at 2pm. Premarket tomorrow we will hear Continuing/Initial job claims and also earnings from BAC and C.

Yesterday prices opened gap up and we had an opening drive higher. After a strong first hour of trade buyers pushed us above the IB and we unable to test Friday’s high. The lack of order flow above the high was ominous and we quickly fell back to the daily mid. From there buyers were unable to defend and we gave back the entire opening drive and then some in a large impulse-type move. The overall print was a neutral print, perhaps barely able to classify as a neutral extreme.

The overnight session looks like a completion of the impulse wave. Early on my expectation is for buyers to push into the overnight short inventory and test Tuesday’s session low 4126.75 and likely push into the range a bit up to the LVN at 4138. From there I expect responsive sellers will step in and continue pressing lower to close the open gap at 4102.25 and test recent swing low 4082.

Hypo 2 is an open drive down. The risk of a drive is elevated given the recent price action on open and how we are out of balance to start the day. Drive down looks to test recent swing low 4082 early and push through to test 4069 then 4053.

Hypo 3 is a stronger than expected open which takes out the LVN at 4038 and sustains trade above it. This type of action likely builds into a full gap fill up to 4158.75.

These levels are highlighted on the following profile charts:

01142015_NQ_VP

NQ_MarketProfile_10142015

Time To End January

174 views

Nasdaq futures are lower as we head into cash open on an abnormal 50 point range and normal volume. At 8:30am the GDP data released was below expectations and we saw a brief pop in futures which was ultimately faded. As we come into the opening bell prices are on the low of the globex session.

Yesterday buyers were put on their heels early in the session as price pushed down into the lower edge of a multi week range and managed to turn. Price then took back more than half of the selling on Wednesday to finish the day up near the highs. Overall the week has been seller dominated since the big gap down on Tuesday.

Heading into today, my primary expectation is for buyers to push into the overnight inventory and work up to 4171.50. Here I will be looking for signs of responsive sellers (responsive relative to the opening print, initiative in nature verse yesterday’s close). They will look to target the MCVPOC at 4144.50 where we will churn through lunch.

Hypo 2 is sellers drive off the open push down through MCVPOC 4144.50 down to 4125.75 where we find responsive buyers back up to MCVPOC 4144.50 and churn through lunch.

Hypo 3 is stronger buyers push on the open, take out 4171.50 and target a full gap fill up to 4185.75. If they can sustain price above 4171.50 then look to target overnight high 4208 and stretch target of MCHVN 4233.25.

Hypo 4 is a drive down, take out 4125.75 and target a break of Thursday’s low 4095.75.

Levels:

01302015_NQ_VP

01302015_NQ_MP

The Quiet Overnight Session

95 views

Nasdaq futures printed a balanced session overnight on normal range and volume. After a brief pop late Wednesday evening, price pushed lower and took out Wednesday’s low 4123.25 and found responsive buyers just ahead of the 1/20 low at 4109. Since then price has traded in a quiet 2-way manner. Earnings have sent the share price of BABA lower as well as CELG. COP is trading a bit higher. We have reports out of GOOGL and AMZN after market close. The Initial/Continuing jobless claims data at 8:30am came in a bit better than expected and we saw a bit of buying on the news.

Turning to the charts, sellers are in control on the short term timeframe. Yesterday we printed an outside day after starting the day gap up above Tuesday’s range and trading all the way though it and closing on the lows. Intermediate term is neutral as we continue working through a multi week range.

Just below the overnight low 4111.25 are some interesting price levels dating back to the last swing low. In particular, the naked VPOC at 4101.25 which we left behind when we turned upward. This level will be interesting to observe if sellers step in this AM.

Early on my primary expectation is for an open auction inside Wednesday’s range which gives way to selling. Sellers will look to take out the overnight low 4111.25 and continue down to test the NVPOC at 4101.25 where we find responsive buyers who work back into Friday’s range and up toward the MCVPOC at 4144.50.

Hypo 2 is buyers push early on and stall out near the MCVPOC 4144.25 churn a bit, before initiative sellers step in and work us lower to target overnight low 4111.25 and potentially the NVPOC at 4101.25.

Hypo 3 is an open drive higher, take out the MCVPOC at 4144.50 and continue higher to test the scene of the FOMC breakdown up at about 4172.

Hypo 4 is we drive lower and take out the NVPOC at 4101.25 and tag the MCLVN at 4083.25, if no responsive buying there then continue lower to the CHVN at 4053.75.

I have highlighted the above levels on the following volume profile chart:

NQ_01292015_trades

Pro Gap, Rule 48 Invoked

241 views

Several weak economic data points, weak reaction to earnings in MSFT and CAT and PG, and overall sentiment have the Nasdaq down over 50 points as we approach cash trade. This is pro gap territory. Interestingly, though the range is 2nd sigma aka abnormal, it took place on a normal amount, or 1st sigma volume. Typically these big down sessions carry some heavy volume.

At 8:30am Durable goods Orders came in much lower than expected. At 9am we have the Case-Shiller Composite, at 9:45am Markit Composite/Service PMI, and at 10am Consumer Confidence, Richmond Fed, and New Home Sales. After the bell we will hear earnings from Apple.

The NYSE is invoking Rule 48 on the market open, which may make for a choppy open.

Value started to overlap between Friday and Monday but heading into the close it seemed the market was not doing a very good job rolling over. Sellers did manage to take out Friday’s low and we had some excess wick on the upper end of the candles, but value was holding. However the overnight session has pushed us down below the Sunday-Monday Globex session low and back to where prices were the morning we heard from the ECB. It will be interesting to see if the buyers defend this level so soon after capturing it.

Early on I am looking for buyers to work into the overnight inventory and push up to the naked VPOC at 4226.50. In this level I expect to see sellers stepping in and defending and then pushing back lower to take out the overnight low 4202 and test deeper into the morning of the ECB, targeting 4171.50.

Hypo 2 is gap and go drive down. Sellers drive off the open and push through Thursday’s range to test the low at4164.50.

Hypo 3 is choppy, 2-way trade through much of the session as the market pauses ahead of AAPL earnings and tomorrow afternoon’s FOMC meeting.

NQ_MarketProfile_01272015 01272015_NQ_VP

Interesting Overnight Action To Start The Week

122 views

Buyers are showing some aggression as we approach cash open in the Nasdaq. The session started off weak Sunday evening with some attributing the move to the outcome of the Greek elections. The move lower around 6pm Sunday took place on light volume and buyers defended the upper edge of value formed Thursday afternoon. Once the globex auction turned around it spent the rest of the session slowly churning higher.

This week’s economic calendar starts off slow and builds in complexity. We have tons of earnings out and a heavy calendar of economic stats. Today we have Dallas Fed at 10:30am and Microsoft reporting after the bell.

Taking to the charts, we can see the Nasdaq went on a four day unidirectional streak to the upside, with Friday’s profile forming a balance on top of the range.  Typically after three days of trade in one direction we start to see price action become more two-way. After four days it becomes even more likely.

Price has so far managed to push up to the upper third distribution of volume. The current micro composite structure as we form this big range has three distinct areas of value with air pockets in between. These air pockets zones are where we see the dramatic, discovery-type moves take place. We could see downside action gain speed, given our current location. See below:

01262015_NQ_VP

So far sellers are defending the upper region of value. Whether they can continue doing so will be my primary focus this morning. My primary expectation this morning is for a choppy, two way auction on the open with sellers a bit more aggressive. They work to fill the overnight gap to 4268 and test the lower end of Friday’s value 4255-4253.75 where we see responsive buyers. These buyers than work up toward the MCHVN at 4285.25 and potentially test above Friday’s high to tag the HVN at 4293.50.

Hypo 2 is buyers active, perhaps not allowing the overnight gap fill to 4268 before making a move to take out Friday’s high 4286.50 and testing up to 4300 where we find responsive sellers and balance out.

Hypo 3 is sellers extend below 4254 and work down through the air pocket to target the overnight low 4231.50 and the naked VPOC below it at 4226.50. I have highlighted my key market profile levels below:

NQ_MarketProfile_01262015

Feels Different Today

214 views

Yesterday afternoon we started to see a behavioral shift from the marketplace. The Nasdaq slowed down and flagged about, much like it did last Friday. The violent waves as we explored the southern tip of the charts opened up to a peaceful, calm, quiet pond. Whether this behavior sticks is unknown but the change has so far carried over into Globex. Overnight the Nasdaq traded on the low end of its normal range on normal volume. Prices drifted above yesterday’s cash highs briefly before finding responsive sellers.

Last night the biggest post-earnings price action was seen in SBUX which traded higher after reporting. At 8:30am we had Chicago Fed Activity and it brought some selling in. At 9:45am we have Markit PMI stats set for release. This announcement shortly after the open may induce some early chop. We also have Existing Home Sales and leading indicators at 10am.

Yesterday was the third straight day of advance in the Nasdaq and price action tends to become a bit rocky on the fourth session. However, bulls have done well to negate the intermediate term seller control, pushing us back into a more neutral-to-bullish stance. We are currently trading in the upper pocket of our triple volume distribution, see below:

01232015_NQ_VPnaked

Drilling a bit closer to the action, we can see prices are coming into the lower end of a large balance area above. It makes sense to expect some overhead supply in this region. Given the pocket-nature of our current trade location, we might still see some speed in the market.

Early on, I am expecting a choppy open auction, inside Thursday’s range before buyers make an attempt at the overnight high 4275.25. Not far above there I will be looking for signs of responsive sellers who work us back below Thursday’s close 4266 and choppy-two way action takes hold.

Hypo two is sellers a bit more aggressive on the open, pushing us over the ledge at 4258.25 and sliding us down through most of the afternoon push higher to test it’s starting point down at 4235.

Hypo 3 is strong bulls push up through 4277.75 and begin exploring the upper balance zone.

These levels can be seen below:

NQ_MarketProfile_01232015 01232015_NQ_VP

Now We Wait

186 views

Nasdaq futures are lower as we head toward cash open. The range and volume associated with the move are about as normal as it comes, both falling right in the middle of their respective Gaussian distributions. Price managed to take out yesterday’s cash high 4175.25 for a while but eventually traded lower. Yesterday evening’s big surprise came from NFLX earnings, which propelled the stock much higher in after-hours trade. The Presidential State of The Union had little effect on index price. Just ahead of the 8:30am housing-type data we saw a run-up in prices which has subsequently faded off/traded flat since.

Yesterday we were gap up to start the week (on a Tuesday) and subsequently faded lower for much of the morning. It was only when price attempted to enter the value zone established when combining last Thursday and Friday that we saw a sharp responsive buyer. Their behavior was strong enough that it reversed the auction process in the opposite direction and we ended the day with a Neutral Extreme print.

The Neutral Extreme print carries strong directional conviction, second only to the trend, or, conviction day. Contributing to the validity of this structure was an end-of-day VPOC shift to the high end of the range. Calling the strength into question is cumulative delta, which, could not manage to stay positive.

Heading into today, my expectation is for buyers to push early on to close the overnight gap to 4167.25 then struggle a bit with 4171.50 before working to take out overnight high 4178.50 and targeting 4184.25 where we see sharp responsive selling.

Hypo 2 is sellers on the open work down to take out overnight low 4149 and target 4146 – 4142 where we see responsive selling and then an attempt at filling the overnight gap.

Hypo 3 is a stronger buying drive early on that takes out 4184.75 early on and opens the door to run up the zipper to 4229.75.

Hypo 4 is strong sellers take out 4142.50 and work back down into Tuesday’s lower distribution and target 4127.50.

These levels are on the following charts:

01212015_NQ_VP

NQ_MarketProfile_01212015

State of The Nasdaq

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Nasdaq futures are higher overnight on a slow-grind type session of trade. As we head into cash open sellers are recapturing some of the progress. The gap up to start the week has been a common feature the last several weeks; a common feature which gives way to selling. Whether that continues to be the case this week will be interesting to observe. Range is on the high end of normal for a globex session and volumes are running in the 2nd sigma.

At 10am we have the NAHB Hosing Market Index as well as Fed’s Powell speaking. The housing data may carry an elevated impact on market prices after the weak showing from the Residential Construction industry last week. Several of the premarket earnings came in well. After hours, two of the majors we will hear from are IBM and NFLX. We also have a Presidential State of the Union Address set for 9pm. More housing stats are set for release in the premarket tomorrow.

Prices are trading inside a big area of acceptance currently, the microcomposite VPOC sits right at 4144.50. These high-volume areas tend to produce murky, choppy trading action. On either edge of this value we have volume pockets which are where the greater opportunity for trend-like behavior resides. Overall, the intermediate term timeframe is neutral-to-bearish. See below:

01202015_NQ_VP

Short term we are gap up with some magnets below. Early on my expectation is for sellers to push into the overnight inventory and take us back to the MCVPOC at 4144.50 and continue lower to close the open gap down to 4134.75. I will look for signs of responsive sellers here (responsive relative to the overnight session, initiative relative the Friday) who work toward taking out the overnight high 4168.

Hypo 2 is buyers enter aggressive early and take out overnight high 4168.25 and continue higher to 4184 and possibly trend through that area.

Hypo 3 is sellers close the overnight gap 4134.75 and continue lower to 4120 area. I have highlighted these areas on the following market profile chart:
NQ_MarketProfile_10202015

The Only Way Out Is Work

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Nasdaq futures are lower overnight and as we come into cash open price are hovering just below Thursday’s range. Volume and range remain 2nd sigma elevated as the aftershocks continue to rip though global markets after an unexpected move from the SNB.

We came into the globex session with sellers pushing and the continued to do so into the afternoon and evening yesterday. INTC earnings were inline yesterday but shares still traded lower which may have contributed. Price pressed into the open gap from 10/27 before finding responsive buyers ahead of a closing of the range gap. Buyers pushed up but were unable to reclaim Thursday’s low 4077.75. We then revisited, but did not take out, the globex lows giving the session a weak looking low.

At 8:30am CPI data brought some buyers into the market who again struggled to reclaim Thursday’s lows.

We had Industrial/MFG production numbers out at 9:15am. We also have U of M Confidence at 10am, Fed’s Williams speaking at 11am, and Fed’s Bullard set to speak at 1:10am. The markets are also cruising into a long weekend as they will be closed Monday in observation of MLK.

Yesterday’s session featured sellers continuing to control the action. There was an interesting shelf formation at 4106.75 which served as a pivot for much of the session. Sellers eventually claimed victory of the area. Early on my primary expectation is for buyers to work into this overnight (short) inventory and close the overnight gap to 4089 to target the VPOC at 4095.25. There I am looking for responsive sellers to step in and continue driving lower. A return to the scene of the CPI bounce at 4061 puts us at the overnight midpoint. From there we continue to take out overnight low 4041.50 and close the range gap to 4040 then the full gap to 4033.

Hypo 2 is sellers drive off the open and run into a bit of demand at 4061 but overrun it and go fill the gap at 4040 then 4033 and overshoot to tag the NVPOC at 4028.

Hypo 3 is sellers early who are defended away above 4061 and buyers push the gap fill and retake the shelf pivot at 4106.75 to set up another leg higher.

You can see these price levels below:

01162015_NQ_VP_midday

NQ_MarketProfile_10162015

Strange Overnight Session Merits Caution

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Volume and range shot well beyond second sigma overnight. This is a clear signal that what you are seeing taking place in the markets this morning is anything but normal. The primary driver of this volatility was forex macro moves resulting from an unexpected move by the Swiss National Bank.

Also occurring overnight was a move higher in oil. This morning the markets are dealing with more earnings from big banks who one after another are seeing share prices lose value post earnings. BAC is trading lower as is C although Citi is currently holding its prior lows.

At 8:30am the economic data including initial/continuing jobless claims, PPI, and Empire Manufacturing brought in some buyers who were quickly faded. This afternoon after market close we will here from INTC while the entire semiconductor industry teeters on the edge of a breakdown. We also have many more banks set to report tomorrow morning and CPI before market open.

Turning our attention to the auction, we can see some weak shelving occurring right at 4106.75. This level will be a big tell today. My initial expectation is we ‘spill over’ the shelf which opens the door for a test of the overnight lows which puts us in range of testing the prior swing lows and the Nasdaq on the cusp of breaking lower. See the context below:

NQ_MarketProfile_10152015

The intermediate term shows sellers controlling the market.

Yesterday the market continued trading lower until we closed to open gap from 01/06. Once we hit these levels a sharp buying response took hold and saw some continuation off the value zone around 4118.75. Buyers were unable to push through the early highs of the session during the afternoon ramp but did see their progress carry through into the overnight session.

The overnight session carried over 100 points of range and as we approach cash open we are trading right near the midpoint of that range. Early on I am looking the yesterday’s VPOC at 4138 as a short term pivot. If sellers can sustain trade below this level that adds confidence to my primary expectation for trade to take out the market profile shelf at 4106.75 (seen above).

Hypothesis 2 is strong buyers off the open who take out yesterday’s session high 4159 and continue probing higher into the volume pocket at 4171.50 and a continued auction higher to target overnight high 4190.

Hypo 3 is a slow open auction inside yesterday’s range and then 2-way chop between 4171.50 and 4118 which eventually gives way lower during the lunch hour.

I have highlighted these levels on the following volume profile chart:

01152015_NQ_VP

Working With The Pro Gap

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Nasdaq volume and range went 2nd sigma overnight as the index traded lower for much of the session. As we approach cash open prices are below Tuesday’s range and we are in a “pro gap” type environment. The selling accelerated at 8:30am when weaker-than-expected Advance Retail Sales data hit the wires. We also had an corrective-type event in copper prices, the Japanese Yen is very active, and JPM missed earnings. WFC is trading lower premarket as well after reporting earnings.

Today we have crude oil inventory stats out at 10:30am. The weekly report is likely to be closely followed by all speculators as the commodity continues to correct lower. We also have Business Inventories at 10am and the Fed Beige Book at 2pm. Premarket tomorrow we will hear Continuing/Initial job claims and also earnings from BAC and C.

Yesterday prices opened gap up and we had an opening drive higher. After a strong first hour of trade buyers pushed us above the IB and we unable to test Friday’s high. The lack of order flow above the high was ominous and we quickly fell back to the daily mid. From there buyers were unable to defend and we gave back the entire opening drive and then some in a large impulse-type move. The overall print was a neutral print, perhaps barely able to classify as a neutral extreme.

The overnight session looks like a completion of the impulse wave. Early on my expectation is for buyers to push into the overnight short inventory and test Tuesday’s session low 4126.75 and likely push into the range a bit up to the LVN at 4138. From there I expect responsive sellers will step in and continue pressing lower to close the open gap at 4102.25 and test recent swing low 4082.

Hypo 2 is an open drive down. The risk of a drive is elevated given the recent price action on open and how we are out of balance to start the day. Drive down looks to test recent swing low 4082 early and push through to test 4069 then 4053.

Hypo 3 is a stronger than expected open which takes out the LVN at 4038 and sustains trade above it. This type of action likely builds into a full gap fill up to 4158.75.

These levels are highlighted on the following profile charts:

01142015_NQ_VP

NQ_MarketProfile_10142015

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