NASDAQ futures are coming into Tuesday gap up after an overnight session featuring elevated range and volume.  Price worked higher overnight, stopping just one point shy of making a new record high.  As we approach cash open, price is hovering above the Monday range.

On the economic calendar today we have a 4-week T-bill auction at 11:30am and a 3-year note auction at 1pm.

Yesterday we printed a normal variation up.  The day began with a gap up-and-out-of range which sellers pushed into after a morning two-way auction.  Sellers were unable to reclaim the Friday range though, instead responsive buyers (responsive relative to the Monday open, initiative relative to the Friday close) rejected the attempt well ahead of Friday’s range.  We then spent the rest of the day auctioning higher trading into the upper quadrant of 6/21’s liquidation day.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7301.  From here we continue lower, down through overnight low 7295.25.  Look for buyers down at 7274.75 and two way trade to ensue.

Hypo 2 buyers reject an attempt to close the overnight gap, setting up a move to take out overnight high 7335.50.  Look for sellers up at 7338.25 and two way trade to ensue.

Hypo 3 strong buyers sustain trade above 7338.25 setting up a move to target 7400.

Levels:

Volume profiles, gaps, and measured moves:

Comments »

NASDAQ futures are coming into the first full week of Q3 gap up after an overnight session featuring elevated range and volume.  Price worked higher overnight, slowly, working well up into the 06/21 liquidation day.  As we approach cash open price is hovering beyond last Friday’s range and we are likely to begin the day out of balance, with higher time frame participants pushing each other around during the open.

The economic calendar is light today.  At 11:30am the US Treasury will auction off 3- and 6-month T-bills.  Then at 3pm we’ll hear the May reading of consumer credit (which is running high).

Last week was split in two by the American Independence day, which caused markets to close early Tuesday and remain closed Wednesday.  Last week began gap down which was quickly bought-up, closing the gap and continuing to run higher.  Tuesday opened gap up and faded the entire half day—moving lower.  Wednesday closed.  Thursday gap up.  Sellers manage to close gap to the tick then buyers step in and rally the rest of the day.  Friday trend up.  All the while the Dow lagged.  The last week performance of each major index is shown below:

On Friday the NASDAQ printed a trend up.  The day began with a gap up that managed to close during the opening auction before buyers drove higher and continued driving higher until reaching the open gap left behind on June 22nd.  The market paused here for a few hours then another leg of buying carried us into the bell.

Heading into today my primary expectation is for a gap-and-go higher.  Price works up to 7300 before two way trade ensues.

Hypo 2 stronger buyers trade up to the open gap at 7312.  Stretch target is 7331.50.

Hypo 3 sellers work into the overnight inventory and close the gap down to 7232.  Look for buyers down at 7200 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

Comments »

NASDAQ futures are coming into Monday gap down after an overnight session featuring extreme range and volume.  Price was balanced overnight before eventually breaking lower and trading down near last weeks low.  As we approach cash open price is hovering below last Thursday’s midpoint.

On the economic calendar today we have ISM Manufacturing/Employment at 10am, then the US Treasury auctioning off 4-week, 3- and 6-month T-bills at 11:30am.

Last week began with a quick gap down lower too.  It was sold into Monday, then a late-day ramp occurred.  Prices held the ramp levels until Wednesday afternoon when another leg of selling pushed through, making new weekly lows.  Thursday opened near the lows, two-way auction ensued and eventually broke higher.  Friday was spent balancing out.  The last week performance of each major index is shown below:

On Friday the NASDAQ printed a neutral extreme down.  The day began gap up and out of Thursday range.  A morning two-way auction broke higher briefly before responsive sellers stepped in and erased the morning gains then continued pushing lower, reclaiming the Thursday range late in the day.

Heading into today my primary expectation is for buyers to work into the overnight inventory and trade up to 7162.  Sellers reject a move back into the Friday low 7061.25 and two way trade ensues.

Hypo 2 stronger buyers work a full gap fill up to 7072.75 then sustain trade above 7061.25 setting up a move to take out overnight high 7088 before two way trade ensues.

Hypo 3 sellers gap-and-go lower, down through overnight low 6992.25.  Look for buyers down at 6892 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

Comments »

NASDAQ futures are coming into Friday gap up after an overnight session featuring elevated range and volume.  Price worked higher overnight, methodically trading higher in a unidirectional manner.  As we approach cash open price is hovering near the Thursday midpoint.

On the economic calendar today we have Markit manufacturing/service/composite PMI numbers at 9:45am.  There are no other important economic events.

Jim Dalton, a legend in the field of auction theory and market profile, put out a tweet this morning regarding the behavior of the auction, the 45-degree manner in which it traded yesterday and overnight, tweeting that the behavior suggests the market is dangerously net short.  Something to keep in mind on this first official summer Friday:

45-degree lines occur when the POC (fairest price at which business is being conducted) doesn't migrate lower with price. Yesterday provided a perfect example. When this occurs the market is dangerously short. See attached graphic. #ES_F #futures $spy pic.twitter.com/t2LOVEhL7P

— Jim Dalton Trading (@daltontrading) June 22, 2018

On Thursday the NASDAQ printed a normal variation down.  The day began with a gap up that buyers quickly drove shut.  Then sellers continued driving lower, effectively closing the open gap from Tuesday and pushing down into the Tuesday range before finding a strong responsive bid (responsive relative to the Thursday open, initiative relative to the Tuesday open).  Sellers defended the daily midpoint and then spent the rest of the session pressing lower, making new daily lows along the way, and pressing into the upper quad of Tuesday before the day’s end.

Heading into today my primary expectation is for buyers to gap-and-go higher, up through overnight high 7274 setting up a move to target 7300 before two way trade ensues.

Hypo 2 sellers work into the overnight inventory and close the gap down to 7236.75.  Sellers continue initiating trades, down through overnight low 7222.  Look for buyers down at 7211.50 and two way trade to ensue.

Hypo 3 stronger buyers trade us up to 7328 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves

Comments »

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring normal range and volume.  Price worked higher overnight during a balanced session, pushing back up near weekly highs, a place we have gone gap down-and-away from twice this week.  As we approach cash open price is hovering near Monday’s closing price.

On the economic calendar today we have existing home sales at 10am and crude oil inventories at 10:30am.

Yesterday we printed a neutral extreme up.  The day began gap down and with a choppy open.  By mid-morning sellers stepped in and pushed lower, into the 06/08 range from two Friday’s back.  The market briefly went range extension down before a strong bid stepped in and effectively reversed the selling with one hard rotation up.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7252.50.  Buyers step in here and work higher, up through overnight high 7274.75 to close the open gap at 7275.50.  Look for sellers up at 7279.75 and two way trade to ensue.

Hypo 2 buyers gap-and-go higher, trade up through 7279.75 and sustain trade above it setting up a move to target 7300.  Extended target is the open gap at 7312 then open air above 7321.

Hypo 3 stronger sellers close overnight gap 7252.50, trade us down through overnight low 7226.75.  Look for buyers down at 7216 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

Comments »

NASDAQ futures are coming into Tuesday pro gap down after an overnight session featuring extreme range and volume.  Price worked lower, down into the range from two Friday’s back before settling into balance.  As we approach cash open price is hovering near Globex low.  At 8:30am housing starts came out above expectations and building permits below.

At 11:30am the US Treasury will auction off 4- and 52-week T-bills.  There are no other important economic events today.

Yesterday the NASDAQ printed a normal variation up.  The week began with a gap down, after a choppy open buyer stepped in and worked a full gap fill to the tick before settling into balance.

Heading into today my primary expectation is for buyers to work into the overnight inventory and test up to Monday low 7208.  Sellers reject a move back into range, triggering a move down through overnight low 7162.  Look for buyers down at 7155.50 and two way trade to ensue.

Hypo 2 sellers gap-and-go lower, down through overnight low 7162 and sustaining trade below 7143.75, setting up a move to target 7100 before two way trade ensues.

Hypo 3 buyers regain Monday low 7208.75 and trade up to 7266.50, setting up a full gap fill up to 7275.50 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

Comments »

NASDAQ futures are coming into Monday gap down after an overnight session featuring extreme range on elevated volume.  Price worked lower overnight, trading down into last Tuesday’s range before settling into a mini balance.

Last week the NASDAQ worked higher, making a new record high by Wednesday and sustaining the gains into the weekend.  Meanwhile the other indices marked time and the Dow drifted lower.  The last week performance of each major index is shown below:

On the economic agenda today we have the NAHB housing market index at 10am and both a 3- and 6-month t-bill auction at 11:30am.

On Friday the NASDAQ printed a normal variation up.  The day began gap down and with a selling drive lower, down below the Thursday low.  However responsive buyers stepped in ahead of the open gap from Wednesday and two way trade ensued, eventually giving way to a range extension up during the drift.

Normal variation up.

Heading into today my primary expectation is for a choppy open.  Markets are out of balance from last week and we may some some institutional behavior sloshing through early on.  Eventually look for buyers to step in and work into the overnight inventory, closing the gap up to 7280.75 then continuing higher, up through overnight high 7289.25.  Look for sellers up at 7300 and two way trade to ensue.

Hypo 2 sellers reject a move back into the Friday low 7245 setting up a move down through overnight low 7218.25.  Look for buyers down at 7209 and two way trade to ensue.

Hypo 3 strong sellers gap-and-go lower, sustaining trade below 7195 and setting up a move to target 7155.75.

Levels:

Volume profiles, gaps, and measured moves:

Comments »

NASDAQ futures are coming into Friday gap down after an overnight session featuring extreme volume on elevated range.  Price worked lower overnight during a balanced session.  As we approach cash open price is hovering near the Thursday low.

On the economic calendar today we have industrial/manufacturing production at 9:15am and the University of Michigan’s primary June reading at 10am.

Yesterday we printed a normal variation up.  The day began with a gap up in range which sellers were unable to fill.  This setu up a move to new record highs.  Buyers became initiative in the afternoon and we closed near the daily high.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7312 setting up a move up through overnight high 7318.75.  Open air.

Hypo 2 sellers gap-and-go down through Thursday low 7261.25 setting up a move to target 7249.50 before two way trade ensues.

Hypo 3 stronger sellers close the gap down at 7230.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

Comments »

NASDAQ futures are coming into Thursday gap up after an overnight session featuring elevated range on elevated volume.  Price briefly traded below the Wednesday low overnight before spending the rest of the session drifting higher.  At 8:30am advance retail sales data came out better than expected and initial/continuing jobless claims data was worse that expected.

Also on the economic calendar today we have business inventories at 10am.

Yesterday we printed a neutral extreme down.  The day began with a gap up and buyers driving higher.  We made a new record high ahead of the FOMC rate decision.  At 2pm the Fed raised their benchmark borrowing rate by 25 basis points.  Sellers stepped in, and third reaction analysis ultimately yielded a sell signal.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7230.25.  From here we continue lower, down through overnight low 7205.25.  Look for buyers down at the open gap 7195 and two way trade to ensue.

Hypo 2 buyers gap-and-go higher, trading up through overnight high 7262.75 and setting up a move to target 7300 before two way trade ensues.

Hypo 3 stronger sellers sustain trade down below 7190 setting up a move to target 7155.50.

Levels:

Volume profiles, gaps, and measured moves:

Comments »

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring elevated volume on normal range.  Price worked higher overnight, briefly tagging but not exceeding the record high, forming a double high in the process. As we approach cash open, prices are hovering along the Tuesday high.

On the economic calendar today we have crude oil inventories at 10:30am.  Then at 2pm the FOMC will release their rate decision.  The decision is followed by a 2:30PM press conference with Fed chairman Powell.

Yesterday we printed a normal variation up.  The day began gap up and with sellers unable to fill the open gap during a choppy, slow, two-way morning auction.  Instead buyers stepped in and initiated higher prices, briefly exceeding last Thursday’s high before two way trade ensued.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7225.75.  From here we continue lower, down to 7200.  Then look for the third reaction after the FOMC decision to drive direction into end-of-day.

Hypo 2 buyers gap-and-go higher, trading up through overnight high 7257.50 and drifting into open air.  Then look for the third reaction after the FOMC decision to drive direction into end-of-day.

Hypo 3 stronger sellers sustain trade below 7190.50 setting up a move to target 7156.  Then look for the third reaction after the FOMC decision to drive direction into end-of-day.

Levels:

Volume profiles, gaps, and measured moves:

Comments »