Index futures are pricing a positive open for stocks this Wednesday. The NASDAQ managed to print an extreme range as it moved higher on elevated volume. Price managed to hold Tuesday’s low before turning higher and trending for most of the session to make a fresh weekly high heading into the midweek trade. At 7am MBA Mortgage Application data came out much higher than expected. The initial reaction was a small buying pulse.

The only other economic event today is the Consumer Credit data at 3pm. Investors are likely to begin weighing the looming FOMC minutes (tomorrow at 2pm) into the decision process as today progresses.

Yesterday we printed a normal variation down. This day type is characterized as having a balanced, bell-shaped volume distribution. It earns the ‘down’ potion from extended price lower after forming initial balance (first hour of trade).   It carried a slight expectation for lower prices heading into today—thus its reasonable to surmise short sellers being in an uncomfortable position heading into today.

My primary expectation today is for buyers to push off the open and trade up to the open gap at 4341.25. This is also the VAH of a well established balance area formed around 09/18. From there look for sellers to step in and work into the overnight inventory to test down to 4304 where I expect buyers to defend and two-way trade to ensue with a slight positive drift.

Hypo 2 buyers gap-and-go up. Price takes out 4341.25 and overshoots it early, setting up a move to target the open gap at 4366.25. Stretch target is 4378.50.

Hypo 3 sellers work down through 4304, muddle about the 4300 century mark, then continue working lower to close the overnight gap down to 4289.50. From there they seek to target overnight low 4270.75 and Monday’s still open gap down at 4261.75 before two way trade ensues.

Levels:

Like flipping a switch, the overnight volatility we’ve experienced for weeks is gone.  NASDAQ futures traded on normal range and volume overnight on a session that was contained inside Monday’s range.  Price worked slightly lower but as we approach cash open the market is right around Monday’s MID.  At 7:30am Trade Balance data came out slightly below expectations and the initial reaction has been mute.

We have no other economic events on the calendar today.  The market will be left to discover prices and balance on its own.

Yesterday we printed a double distribution day.  It was not really trending price action but instead we saw a p-shape profile form atop a normal distribution.  The P-shape suggests a short squeeze occurred late in the session.

Heading into today, my primary expectation is for buyer to work into the overnight inventory and close the gap up to 4312.25.  From there they target overnight high 4314.  Sellers defend around the 4315 level and we churn and chop before continuing higher to target 4320.25 then the open gap up at 4341.25.

Hypo 2 sellers work in around the gap fill/overnight high 4312.25 – 4314 and roll price over.  Price works down below Monday’s low 4279 and targets the weekend gap fill down to 4261.75.  There’s a globex distribution down to 4253—if sellers can push below it, they open up the door for a fast liquidation down to 4200.  We may see a false move down into the slip zone where buyers defend 4244.

Hypo 3 sellers push off the open, leave the overnight gap open, and work down below Monday’s low 4279 and targets the weekend gap fill down to 4261.75.  Then it is eyes on the globex distribution down to 4253—if sellers can push below it, they open up the door for a fast liquidation down to 4200.  Again, we may see a false move down into the slip zone where buyers defend 4244.

Levels:

NASDAQ futures are green heading into Monday’s cash open.  The globex session spent most of the evening trading flat before turning higher around the time European markets opened.  The session featured elevated range and volume.  Price managed to push up to the Friday, 9/25 high before sellers came in.

This week is light on economic events but there are a few high impact ones including this morning’s ISM Non-Manufacturing Composite at 10am.  Also out at 10am is the Labor Market Conditions Index.

Last week the NASDAQ started with a gap down and sellers drove price lower.  They extended beyond Monday’s low Tuesday then price went gap up into Wednesday.  Price churned sideways through Thursday and Friday was a trend day up after opening gap down.

Heading into today, my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4261.75.  Look for choppy trade early on ahead of the 10am data before sellers push down through 4270 setting up the gap fill.  Then look for a move to take out overnight low 4250.50.  Stretch target is 4243.75.

Hypo 2 sellers struggle to close overnight gap and cannot push down through 4270.  Buyers step in and probe above overnight high 4296.75 and above the 09/25 high at 4298.50.  Sellers do not defend up here and price continues working higher to target the open gap up at 4326.25.

Hypo 3 gap and go up.  Buyers take out 4298.50 early setting up a strong push to 4326.25.  Some churn in this region before continuing higher to close the open gap up at 4341.25.  Stretch target is the open gap up at 4366.25.

Hypo 4 when buyers probe above the 09/25 high 4298.50 it discovers sharp responsive selling and we work lower to target 4270 then a gap fill down to 4261.75.

Levels:

NASDAQ futures took the elevator down this morning after a much weaker-than-expected Nonfarm payroll print.  Prior to NFP the globex session was working higher.  Price managed to push into the low-end of last week’s range, just like yesterday morning, before reversing lower.  However, we did not exceed the globex high set Thursday morning.  The NFP reaction managed to push us into another extreme range/volume session with price now trading on the low-end of yesterday’s range.

Also on the agenda today we have Factory Orders at 10am and Baker Hughes Rig Count at 1pm.

Yesterday we printed a neutral extreme day.  After opening gap up we had a sharp drive lower but held Wednesday’s range.  Buyers stepped in and defended it twice—once in the morning and again in the early afternoon before reversing the auction and closing the day out at session high.

Heading into today, my primary expectation is for buyers to push into this NFP reaction.  Liquidity is still way out of whack as we head into cash open which can lead to quick directional moves.  Look for buyers to trade up and close the overnight gap up to 4187.25.  From there look for buyers to continue trading higher to ‘check back’ to the scene of the reaction up at 4213.25 before two way trade ensues.

Hypo 2, sellers gap-and-go lower.  The way USD/JPY is breaking lower supports this hypothesis.  Look for sellers to test yesterday’s low 4116.25 setting up a gap fill down to 4074.75.  Look for responsive buyers down at 4062.25 otherwise a move to the stretch target, the open gap down at 4031.25.  If the liquidation really accelerates then also look to fill the open gap down at 3997.50 from the China Rate Cut.

Hypo 3 so kind of two way trade ensues.  Sellers test below yesterday’s low 4116.25 and immediately find responsive buyers who struggle to fill the overnight gap up to 4187.25 stalling instead around 4160.

Levels:

NASDAQ futures are coming into the October nearly flat after being nearly 60 points higher early this morning.  Once the European markets opened pressure took price lower after buyers briefly pressed the market up into last week’s range.  Volume and range are both extreme on the session which so far managed to hold above yesterday’s midpoint.  At 8:30am Initial/Continuing Jobless claims data, an appetizer to tomorrow morning’s Non-farm Payroll data, came in mixed.  The initial reaction is selling.

We have a few economic points out at 10am including Construction Spending and ISM Manufacturing.

Yesterday price opened gap up right on top of Tuesday’s range and buyers pressed the morning trade.  By 1pm sellers pushed us neutral and by the close were trading just above the daily mid making it a classic neutral day.

Heading into today, my primary expectation is for sellers to press this overnight gap closed.  Look for trade down to 4154.50 then take out overnight low 4150.25.  From there a test down to 4132.75 where I will look for responsive buyers and two-way trade to ensues.  The 10am data may provide the turn/direction on the morning.

Hypo 2 sellers push down through 4132.75 setting up a test of 4100 with a stretch target down to 4083.

Hypo 3 buyers show up right around the gap fill 4154.50 and push higher to target overnight high 4225.75.  There is another piece of ‘pole climb’ context above 4238.50 which extends up to 4273.75 which would be my upside stretch target.

Levels:

Futures are pro gap up heading into Wednesday after a globex session featuring extreme range on elevated volume. Price managed to hold well above yesterday’s session low before trending higher for most of the evening.   At 8:15 am ADP Employment change came in slightly-better-than expectations and as we head into cash open price is hovering near yesterday’s session high, but buyers were unable to take it out overnight.

At 3pm today Fed Chair Yellen and St. Louis Fed President Bullard are giving a talk on community banking. Investors may be watching closely to see how Yellen’s health has progressed after last week’s near-vomit experience.

Yesterday we printed a neutral day, barely. Just after 10:30am, for a fleeting moment, price went range extension up. Shortly after, excess high was formed and we spent the rest of the day auctioning lower. Around 3pm we pressed neutral on fast liquidation and by the close price was back inside the initial balance.

Heading into today, my primary expectation is for seller to push into the overnight inventory. Look for price to work down to 4100 level where we may see responsive buying. Look for sellers to overwhelm the bid and continue lower to close the overnight gap down to 4074.75 then target overnight low 4066. Stretch target is the open gap down at 4031.25.

Hypo 2 buyers sustain price above 4100 and we make a move above overnight high 4138.75. Buyers target 4147.25 before two way trade ensues.

Hypo 3 buyers gap-and-go up, take overnight high 4138.75 early and set their sights on 4166.25. Potential exists for a pole climb all the way up to 4200.

Levels:

NASDAQ futures are starting the week out with a gap down. Price is down nearly 30 points which is right around pro gap territory. The overnight session featured extreme range on elevated volume during the choppy session. Globex trade started with selling and quickly exceeded Friday’s low before buyers stepped in and rallied price back up to the mid. From there we spent the early morning working back down through the range to make new lows. We have a weak/double low at 4175. At 8:30am Personal Consumption Expenditure data came out in line/slightly better than expectation and the initial reaction was buying.

The only other item on today’s economic calendar is Pending Home Sales at 10am. As the week progresses keep in mind Friday’s Nonfarm payroll data.

Last week price worked lower. There were two pro gaps down and Friday a pro gap up that was faded, along with all of Thursday’s range. Volume on the sell side was stronger than we have recently seen. However there was a slight bounce [at least in the NASDAQ] as we wrapped up the week.

Heading into today, my primary expectation is for seller to work into the overnight inventory and close the weekend gap up to 4213. From there I will look for buyers to continue higher to take out overnight high 4239. Look for buyers to stall out soon after exceeding overnight high and two way trade to ensue.

Hypo 2 buyers cannot fill overnight gap and instead sellers step back in ahead of it. Look for sellers to target the weak overnight low at 4175 then to continue lower to target 4122.25.

Hypo 3 strong buyers, push up through overnight high 4239 and pole climb up to 4265, Then some churn, before targeting 4279.

Levels:

Heading into Friday NASDAQ futures are trading pro gap up, the third such gap this week, only today the direction is up. As we close in on cash open price is essentially where we started the week. The globex session featured extreme range and volume as the night session continues to be abnormally active. At 8:30am we had some medium impact GDP data out which all read slightly better-than-expectations.

The morning is spattered with medium impact economic data. At 9:45am we shall hear the Markit Composite and Service PMI stats. At 10am the University of Michigan will issue their final read on September Confidence, and at 1pm we have the Baker Hughes Rig Count.

Yesterday we printed a neutral extreme day. The market opened pro gap down, saw an open auction outside range, then sellers worked into the tape and pushed us lower. Price closed up the Labor Day gap (09/03) down at 4194, printed an excess low, then turned higher. Late in the afternoon a short squeeze developed on decent volume and buyers pressed the overnight gap closed to the tick (4264.75) and managed to hold onto the neutral extension into the close.

My primary expectation is for sellers to work into the overnight inventory. With all the economic data this morning we are likely to see choppy conditions. Look for trade down to 4260 but buyers to step in there and target overnight high 4315.75. Then look for two-way trade to ensue.

Hypo 2 buyers gap-and-go up. We take out overnight high 4315.75 early and set our sights on 4326.75. Some churn at this level then a continuation up to 4340.

Hypo 3 sellers hold us below 4300 and then work a full gap fill down to 4247. Look for a responsive bid down at 4240 then 2-way trade.

Levels:

We are headed into Thursday trade pro gap down (2^nd pro gap down this week) after an extreme session. Both range and volume pressed out beyond 3^rd sigma while price auctioned around. Yesterday evening price exceeded RTH low briefly before pressing higher. Upon testing globex high, around 4:30am, we had a failed auction and subsequently traversed the entire range and more, putting us at fresh weekly lows. At 8:30am Initial/Continuing jobless claims data came out mixed. We also had Durable Goods Orders out at 8:30 and the data was slightly better than expected. So far futures have not reacted to the data.

Also on the agenda today is New Home sales at 10am. It will be an interesting stat after seeing the big upward beat in MBA Mortgage Applications yesterday and Monday’s unexpected drop in Existing Home Sales, perhaps a resolution of the mixed message in housing if you will.

Yesterday we printed a neutral day. Price opened gap up, faded, held Tuesday’s upper quad before making range extension up. Price then went for a retest of the low, putting us neutral, then we churned into the bell.

Heading into today my primary expectation is for price to work lower. We may see buyers push into the overnight inventory but look for them to stall out ahead of 4242. Then look for sellers to continue lower to close the 9/4 open gap down at 4194. From there look for a strong responsive bid and buyers to work the gap fill all the way up to 4264.75.

Hypo 2 sellers gap-and-go lower, take out overnight low 4206 early and close the 9/4 gap down to 4194. Responsive bid is overrun setting up a liquidation down to 4164.

Hypo 3 strong buying on the open, works up through 4250 early and continues higher to close the overnight gap up to 4264.75. Then buyer set their sights on overnight high 4278.75. Look for sellers to defend 4282.

Levels:

We are coming into the midweek trade gap up after NASDAQ futures had a busy globex session. Trade began yesterday afternoon lurching lower and taking back most of the late-day rally. Price pushed down near Tuesday’s low, but was unable to push through it (ledge). As the clock turned to Wednesday buyers came in and we spent the rest of the session working higher and managed to push into Monday’s range before balancing out. The volume print overnight is elevated-but-not-quite extreme on the 23^rd sigma range. At 7am MBA Mortgage Applications came in much stronger than expected. Third reaction to the numbers is a buy.

At 9:45 am we will hear Markit Manufacturing PMI. This early data may lead to choppy opening trade.

Yesterday price opened pro gap down and after a two-way, open action sellers worked the index lower. We managed to push down and close the open gap from 09/03 which aligned with a contextual ledge. We then spent the afternoon rallying higher and by the close we formed a weak, double top at 4273.50.  The session also had the highest NAS TRIN readings I have ever seen–peaking out near 135.  This typically occurs at-or-near inflection points from my observation.

Heading into today, my primary expectation is for seller to work into the overnight inventory and close the gap down to 4266.50. Look for sellers to continue pushing to target 4250 where buyers step in. Then look for buyers to target overnight high 4292.75 with a stretch target of Monday gap fill up at 4341.25.

Hypo 2 buyers gap-and-go up, take out overnight high 4292.75 early, and set their sights on Monday gap fill up to 4341.25 with a stretch target of Fed Rate gap up at 4366.25.

Hypo 3 sellers work us down to close the gap to 4266.50, down through 4250, and continue pushing to target 4237.25. Some churn but now put the overnight low 4221.50 at risk, which is the ledge, which, if breaks look for a liquidation down to 4200.

Risk is high, if you cannot tell from these hypos. Levels: