NASDAQ futures are up +100 ahead of opening bell after an overnight session featuring extreme range and volume. Price worked higher overnight, spiking up on the Globex open last night before stabilizing around 11pm New York along the bottom-side of Friday’s midpoint. Then around 3am buyers reclaimed the Friday mid, and as we approach cash open price is hovering right on the mid. At 8am Fed Chairman Jerome Powell discussed the role of the U. S. dollar as reserve currency and said the Fed is taking a closer look at issuing a digital currency. The announcement spiked bitcoin higher but equity markets are so far non-reactive.

Also on the economic calendar today we have housing market index at 10am followed by 3- and 6-month T-bill auctions at 11:30am.

Last week kicked off with a choppy open, slight selling before a big Monday rally. Price consolidated the gains through Wednesday morning. Then selling pressure was seen into the second half of the week and into the weekend. The last week performance of each major index is shown below:

On Friday the NASDAQ printed a normal variation down. The day began with a gap up beyond the Thursday range. Buyers campaigned up into the Wednesday range, tagging the midpoint before 10:30am. Responsive sellers here overwhelmed the big and the auction reversed course—pressing range extension down on its way to closing the overnight gap. Price consolidated here, below the daily mid, for several hours. Then there was strong selling during the closing hour, pressing to to a new session low and tagging the Thursday naked VPOC.

Heading into today my primary expectation is for sellers to work into the overnight inventory and closing the gap down to 11797.75. Sellers continue lower, filling last Friday’s open gap down at 11,726.25 before two way trade ensues.

Hypo 2 buyers gap-and-go higher, taking out overnight high 11,949.25 on their way to tagging 12,000 before two way trade ensues.

Hypo 3 stronger buyers tag 12,037 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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Quick note: After bears were trounced yesterday and with month-end/quarter-end only two days out, my bearish convictions have been called into question  at a time when the likelihood of a big move is high. I have no edge statistically, and my perception is off. Today we have a gap down in range and normally I would fade this gap higher, but I will not be participating. Now back to your regularly scheduled trading plan.

-Raul Santos, September 29th 2020

NASDAQ futures are coming into Tuesday, the second-to-last day of Q3 with a slight gap down after an overnight session featuring extreme range and volume. Price was steady last night, gently pressing up beyond the Monday high until about 10pm New York. From then onward the rotation was lower. At 8:30am advance good trade balance data came out mixed, and as we approach cash open price is hovering in the upper quadrant of Monday’s range.

Also on the economic calendar today we have consumer confidence at 10am.

Yesterday we printed a neutral extreme up. The day began with a pro gap up opening up at levels unseen since September 16th. The morning was spent attempting lower. Sellers drove down into the opening bell then held the mid on three attempts at it. Each time sellers made a slightly lower low, but not much progress. Around 12:30pm, after failing three times to take out the September 16th low, buyers stepped in and reclaimed the mid then continued higher, pressing neutral. We ended the day on the highs, tagging the September 16th naked VPOC right during the closing ramp.

Heading into today my primary expectation is for buyers to press into the overnight inventory and close the gap up to 11,395.50. Buyers take out overnight high 11,448.75 clearing the way for a run up to 11,480.75 before two way trade ensues.

Hypo 2 sellers take out overnight low 11,333.75 and tag 11,311.25 before two way trade ensues.

Hypo 3 stronger sellers take out the Monday low 11,226.25 setting up a Friday gap fill down to 11,135.25.

Levels:

Volume profiles, gaps and measured moves:

 

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NASDAQ futures are coming into Monday pro gap up after an overnight session featuring extreme range and volume. After a two way auction from Globex open until about 10pm a steady campaign higher took hold. Price has rallied unidirectional up since, and as we approach cash open price is hovering inside the upper quadrant of the 09/17 range (two Thursday’s back).

On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.

Recall last week started with a big down gap then lots of chop. Price chopped higher through Tuesday then lower until Friday morning. Then a big trend up Friday and into the weekend. The last week performance of each major index is shown below:

On Friday the NASDAQ printed a trend up. The day began with a pretty wide and choppy two-way auction, chopping all over the midpoint several times before around 10:20am when buyers took control of the tape. From then on we were trend up, ending the week just below the weekly high and near session high.

Heading into today my primary expectation is for a short squeeze on the open, squeezing up to 11,442.75 before two way trade ensues.

Hypo 2 sellers work into the overnight inventory and close the gap down to 11,135.25. Sellers continue lower, down through overnight low 11,125. Look for buyers down at 11,100 and for two way trade to ensue.

Hypo 3 stronger sellers liquidate down to 10,960 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume. Price was balanced overnight, balancing below Wednesday’s low for much of the Globex session before about 8:30am. At 8:30am jobless claims came out in-line with analyst consensus. Still, it sent price lower and as we approach cash open, price is trading right along the Monday low.

Also on the economic calendar today we have new home sales at 10am along with Fed Chairman Powell speak. At 11:30am there are 4- and 8-week T-bill auctions at there is a bunch of Fed speak due out from less important bankers from 12-1pm.

Yesterday we printed a trend down. The day began with a very slight gap up that was resolved during an open two-way auction. That would be the extent of the control buyers would have on the day. Price quickly drove down below the Tuesday midpoint and the daily midpoint wall until about 11:30am when sellers became initiative and drove lower, taking out the Tuesday low by about 2:30pm and eventually tagging the Monday naked VPOC. We ended the day near the low.

Trend down.

Heading into today my primary expectation is for a choppy battle. Buyers are seen defending ahead of 10,600 and we chop in this 10,600-10,700 range.

Hypo 2 stronger sellers gap-and-go lower, taking out 10,600 and sustaining trade below it to set up a run to 10,553.75. Look for buyers down at 10,527.50 and for two way trade ensue.

Hypo 3 buyers press into the overnight inventory and close the gap up to 10,830. Buyers continue higher, taking out overnight high 10,847 on their way to tagging 10,900.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into Tuesday gap up after an overnight session featuring extreme range and volume. Price was balanced overnight, chopping along the Monday high until about 1am when sellers made an attempt lower. Said sellers reversed much of the late Monday afternoon ramp before discovering a strong responsive bid. Buyers took price back up and beyond the Globex high, and as we approach cash open price is hovering up near last Thursday’s high.

On the economic calendar today we have existing home sales at 10am, Fed Chairman Powell speaking at 10:30am and a 2-year note auction at 1pm.

Yesterday we printed a neutral extreme up. The day began with a gap down in range and after a choppy open two-way auction sellers made a move on the lows. Sellers took out last week’s low, trading down into the July 30th range briefly before a strong responsive bid stepped in. There was a battle at the midpoint and we chopped over it a few times before buyers pushed away from it and into a neutral print. Around 3pm we worked back to the midpoint again, buyers defended, setting up a powerful ramp higher into the closing bell. The ramp saw price climb back above last Friday’s midpoint and we ended on session high.

Heading into today my primary expectation is for buyers to gap and go higher, squeezing up to 11,138.25 before two way trade ensues.

Hypo 2 stronger buyers sustain trade above 11,138.25 setting up a tag of 11,200 and a gap fill up to 11,252.75 before two way trad ensues.

Hypo 3 sellers press into the overnight inventory and close the gap down to 10,989. Sellers continue lower, down through overnight low 10,89750 setting up a tag of the Monday VPOC 10,808 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into the last full week of September gap down after an overnight session featuring extreme range and volume. Price was balanced overnight until about 3:20am when sellers stepped in and drove price down through last Friday’s low. As we approach cash open, price is bouncing along, right around the Friday low.

On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.

Last week featured a three day rally—rallying up into the FOMC rate decision then selling off for the rest of the week. There was a decent ramp higher into the Friday close. The Russell was divergent strong, suggesting a decent risk appetite still exists. The last week performance of each major index is shown below:

On Friday the NASDAQ printed a double distribution trend down. The day began with a slight gap up that sellers drove down into at the open. This selling continued until tagging Thursday’s volume point of control. A strong responsive bid stepped in here and formed a sharp excess low. The low would not hold, however, by late morning sellers were pressing into the tap again and before lunch the Thursday low was taken out. There was a minor battle along the Thursday low before the selling campaign continued, trading down into levels unseen since July 31st. Then around 1:45pm the auction reversed. We spent the rest of the day ramping higher. We closed just below the daily midpoint.

Heading into today my primary expectation is for buyers to work into the overnight inventory and work a partial gap fill up to 10,880 before two way trade ensues.

Hypo 2 gap-and-go lower, liquidating down through overnight low 10,708.50. Buyers cannot hold 10,700 setting up a move down to 10,630.25 before two way trade ensues.

Hypo 3 buyers work a full gap fill up to 10,927.50 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into Thursday pro gap down after an overnight session featuring extreme range and volume. Price drove lower overnight, continuing on the momentum of Wednesday afternoon’s selloff until about 2:30am, when responsive buyers stepped in slightly below last Friday’s open gap. Those sellers managed to put together a 110 point rotation higher that ran until about 6am. Since then sellers have been in control. At 8:30am initial/continuing jobless claims data came out very slightly worse than expected. At the same time housing starts came in soft and Philadelphia Fed data came out in line. As we approach cash open, price is in a bit of a free fall and nearing last Friday’s low.

Also on the economic calendar today we have 4- and 8-week T-bill auctions at 11:30am followed by a 10-year TIPS auction at 1pm.

Yesterday we printed a normal variation down. The day began with a slight gap up and after a tight open two way auction sellers stepped in and erased the open gap. Said sellers managed to take out the Tuesday low and press rang extension down by a few points before responsive buyers worked price back up to the daily midpoint. Sellers defended the mid, setting up a new low of the day. Third reaction to the FOMC rate decision was down and we spent the rest of the session working lower, eventually closing on session low, down in the lower quadrant of Monday’s gain.

Heading into today my primary expectation is for buyers to work into the overnight inventory, working up to 11,000 before stalling out and going into chop.

Hypo 2 sellers gap-and-go lower, tagging the open gap at 10,903.50 before two way trade ensues.

Hypo 3 full on liquidation. Downside targets 10,875 — 10,823 — 10,719 — 10,695.

Levels:

 

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into Wednesday with a slight gap up after an overnight session featuring extreme volume and range. The campaign higher continued overnight, with buyers bidding the Globex market back up near last Thursday’s high (but not exceeding it) before discovering responsive sellers. Said sellers stepped in around 7am New York and knocked price back down into Tuesday’s range. At 8:30am retail sales data came out weaker than expected. The market hasn’t shown much reaction to the data point so far, and as we approach cash open price remains hovering in the upper quadrant of yesterday’s range.

Also on the economic docket today we have business inventories and housing market index at 10am followed by crude oil inventories at 10:30am. Then comes the FOMC rate decision at 2pm followed by a press conference from Federal Reserve Chairman Powell at 2:30pm.

Fed fund futures are currently pricing in a 100% probability that the Fed will keep their benchmark borrowing rate pinned at 0%. The event is likely to cause an uptick in volatility as investors attempt to price in any further clarity they gain on the changes announced by Powell at the Jackson Hole symposium last month along with other factors like new economic forecasts and whether the central bank will commit to allowing inflation to overshoot their 2% target before tightening.

Yesterday we printed a neutral day. The day began with a gap up beyond Monday’s range. There was an open drive higher which stalled out within the first 30 minutes. Sellers managed to press the market range extension down right around 10:30am but buyers rejected an attempt back into Monday’s range. Instead price recovered the daily midpoint by late morning. Around 1:15 the market went range extension up, pressing into a neutral print. Sellers quickly reverted that move back to the midpoint before crossing down through it and making a new low of day. Again buyers were seen rejecting a move back into Monday’s range. Price ramped back up through the mid and ended the day in the upper quadrant of range.

Choppy neutral day.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 11,452.75. From here sellers continue lower, taking out overnight low 11,388.50 before two way trade ensues. Then watch for third reaction to the FOMC announcement to dictate direction into the close.

Hypo 2 stronger sellers trade down to 11,300. Then watch for third reaction to the FOMC announcement to dictate direction into the close.

Hypo 3 buyers press up through overnight high 11,539. Look for sellers just above at 11,545.25. Then watch for third reaction to the FOMC announcement to dictate direction into the close.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into Tuesday pro gap up after an overnight session featuring extreme range and volume. Price was balanced overnight until about midnight New York when initiative buyers stepped in and bid the market higher. Price has been on a unidirectional campaign since, trading up to levels unseen since last Thursday. At 8:30am Empire State manufacturing index came out much stronger than expected:

NY FED'S SEP MFG INDEX 17.0 VS 3.7 IN AUG

— *Walter Bloomberg (@DeItaOne) September 15, 2020

As we approach cash open, price is hovering around the upper quadrant of the Thursday (rollforward) range.

Also on the economic calendar today we have industrial production at 9:15am and a 20-year bond auction at 1pm. The Fed meeting has begun and we will hear their announcement tomorrow at 2pm tomorrow.

Yesterday we printed a normal variation down. The day began with a gap up and after a brief open two way auction price drove higher, driving higher right up until about 10:30am. Buyers could not, however, press the market range extension up. Instead price stalled just above last Thursday’s midpoint. Price then consolidated just below the daily high until about lunchtime when sellers stepped in and drove price back down through the midpoint and eventually to a brief range extension lower. Sellers were rejected from closing the overnight gap. Instead, only a few points below low of day responsive buyers (responsive relative to Monday’s open, initiative relative to Friday’s close) stepped in and worked price back up through the midpoint. We ended the day a bit above the midpoint.

Heading into today my primary expectation is for buyers to hold price above 11,381 setting up a run to 11,500 before two way trade ensues.

Hypo 2 sellers work into the overnight inventory and close the gap down to 11,261.75. Look for buyers down at 11,237 and two way trade to ensue.

Hypo 3 stronger buyers drive up to 11,546.75 before chop ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into the week gap up after an overnight session featuring extreme range and volume. Price was gap higher at 6pm Sunday evening when futures opened for trade. Price then drove unidirectional higher, trading right up to Friday’s high print and stalling (to the tick) and failing to take it out. Since then around 4:15am New York) we have been in a balance and as we approach cash open price is hovering in the upper quadrant of Friday’s range.

On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.

Last week was choppy and holiday shortened. U.S. markets were closed Monday in observation of Labor Day. Then we had two days up and two days down, ultimately closing lower across the board. The last week performance of each major index is shown below:

On Friday the NASDAQ printed a normal variation down. The case could be made that it was a double distribution trend down but I will classify it as a normal variation down. The day began with a gap up that was resolved during an open two way auction. From there sellers worked a bit lower but could not take out the Thursday low on their first attempt. Price campaigned higher before stalling out ahead of the morning high. The action was lower from then until about 1:45pm, selling down into levels unseen since August 11th. We caught a bid and rotated back to the daily midpoint, eventually closing just a few points below it.

Heading into today my primary expectation is for a partial gap fill down to 11,125 before buyers step in and work up through overnight high 11,265.75. Look for sellers up at 11,300 and two way trade to ensue.

Hypo 2 buyers gap-and-go higher, taking out overnight high 11,265.75 early on setting up a move to tag 11,300. Stretch target 11,381.

Hypo 3 full gap fill down to 11,050 then a tag of the Friday VPOC at 11,010. Look for buyers around 11,000 and two way trade to ensue.

Levels:

Volume profiles, gaps and measured moves:

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