NASDAQ futures are coming into Wednesday gap down after an overnight session featuring extreme range and volume.  Price worked lower overnight, driving fast at times, discovering lower prices.  As we approach cash open the auction profile resembles a lowercase letter-b which suggests a long liquidation occurred—a temporary market phenomenon like a short squeeze but in the other direction. Price is hovering on the topside of a multi-day value area formed in early May and showing short-term balance.

The economic calendar is loaded today.  At 9:45am we have Markit manufacturing/service/composite PMI.  New home sales data comes out at 10am, crude oil inventories at 10:30am.  At 11:30am the US Treasury will auction off $26 billion in 52-week bills and $16 billion in floating rate 2-year notes.  Then at 1pm they will auction off another $36 billion in 5-year notes.

Then, at 2pm the Federal Reserve will release the minutes from their May 2nd meeting.

Yesterday the NASDAQ printed a normal variation down.  The day began gap up and after a brief 2-way auction sellers stepped in and closed the gap.  We spent most the rest of the day chopping sideways until some late afternoon selling made new daily lows.

Heading into today my primary expectation is for buyers to push off the open.  Look for sellers to reject a move back into the 5/18 low, likely defending at the open gap left behind at 6874.25.  Then look for 3rd reaction after the FOMC minutes to dictate direction into end-of-day.

Hypo 2 gap-and-go lower, press through overnight low 6829.75 setting up a move to target 6801.25 before two way trade ensues.  Then look for 3rd reaction after the FOMC minutes to dictate direction into end-of-day.

Hypo 3 stronger buyers work a full gap fill up to 6909.25 then continue higher, up through overnight high 6913.25.  Look for sellers up at 6925.25 and two way trade to ensue.  Then look for 3rd reaction after the FOMC minutes to dictate direction into end-of-day.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range and volume.  Price drifted higher overnight, slowly and methodically, and as we approach cash open prices are hovering in the upper quadrant of Monday’s range.

The only economic events today are a 4-week T-bill auction at 11:30am and a 2-year note auction at 1pm.

Yesterday we printed a normal variation down.  The day began with a gap up and driver higher.  Buyers stalled ahead of last Thursday’s high and price made a sharp move back down into last Friday’s range. Sellers were unable to close the overnight gap.  We worked back to the daily mid then another sell rotation came through, again unable to close the overnight gap.  Responsive buyers (responsive relative to the Monday open, initiative relative to the Friday close) stepped in at the end of the day and ramped us back to the daily mid.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6915.25.  From here we continue lower, down through overnight low 6908.75.  Look for buyers ahead of 6890 and two way trade to ensue.

Hypo 2 buyers gap-and-go higher, up through overnight high 6947.50 setting up a test of the Monday high 6957.  Look for sellers up at 6963 and two way trade to ensue.

Hypo 3 stronger buyers close the gap up at 6973.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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This is what I was talking about Sunday when I said ‘where the rubber meets the road’.  Unless you held a position in the futures over the weekend, that 50 point gap up on Sunday evening was useless to you.  And if you appreciate your sanity then you probably don’t want to hold futures into the weekend.  For most of you the weekend is the only time you live your best life before returning to the servitude of your employer.

Being bearish into the week has had its perks thus far.  If you were trading Sunday evening the best rotation was down.

When cash session rolled around 9:30am New York bulls drove higher.  It was an impressive showing right off the rip and was cause to stand aside until we saw sellers of a comparable size and resource step in:

Buyers drive higher off the open doing their best to abandon this profile before it has a chance to fill in. Not stepping in front of this drive up https://t.co/Q94IBQtTwL

— RAUL (@IndexModel) May 21, 2018

It was sort of looking like a more aggressively bullish version of hypo 2.  Here is the text form this morning’s report:

Hypo 2 buyers defend ahead of overnight low 6898.75 setting up a move to take out overnight high 6947.75.  Look for sellers up at 6963 and two way trade to ensue.

We never made it to 6963 and by 11am were off the high and forming a mini-balance, which eventually broke lower and created the biggest rotation of the day.  Resourced sellers rejected a move out of a huge balance that has been building since last Tuesday.  Sellers then defended the daily midpoint setting up another hard rotation lower.

I did not trade the ‘throwback to the mid’ which I normally do, but I held a runner in hopes we would make a new daily low.  This was ultimately closed out right here at the close for a much smaller win.  Holding that intra-day runner is me being more aggressive.  This is what I was talking about Sunday, about pressing my bias.

Today my aggression did not pay.  Bulls pinged a few of the big names right at the bell and we spiked.  Look at 5 minute bars in names like Apple, Amazon, and to a lesser extent NVIDIA.

I was sending cryptic messages through StockTwits and Twitter, hoping to stoke some social tracking algo in my favor.  Aggressive desperation.  It should be noted I ate a small amount of pork yesterday. Sister RAUL prepared a shredded loaf of pig flesh and I had to try it.  I may have absorbed some of the rage and desperation the animal felt before its murder when I consumed its flesh.

Anyhow cash session was a draw.  If the recent history of bulls dominating GLOBEX continues, it is likely we drift higher overnight.  The picture over on the S&P is anything but bearish.  Bulls held their breakout:

But no matter how you observe it, the cash session was a draw.

Tomorrow’s cash session is, as always, TBD.  And you know which side I will be working at some point tomorrow morning.

It really feels to me that we are entering a holding patter ahead of Wednesday afternoon’s FOMC minutes and Friday’s Fed chaiman talk from Jerome Powell.

The excitement over ‘trade wars’ ending is a loose footing for making an argument, either way.  It is a mound of sand in comparison to the rock that is the Federal Reserve.

Look at the current /NQ profile.  You see what I’m seeing?

KEEP TRADING SIMPLE.  DISCOVER VALUE.  SELL ABOVE IT, BUY BELOW.

Selling is being absorbed and so far the buying is too.

trade accordingly

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NASDAQ futures are coming into Monday gap up after an overnight session featuring elevated range on normal volume.  Futures opened gap up, with the behavior being attributed to news that ‘trade wars’ were on hold.  We then spent most of the evening working sideways before sellers stepped in.  Their attempt back into the Friday range was rejected by buyers.  As we approach cash open prices are holding about 20 points above the Friday high.

The economic calendar is light to start the week.  At 11:30am we have a 3- and 6-month T-bill auction.  There are no other economic events.

Last week was the third choppy week in a row.  Strong Monday, gap down Tuesday, then consolidation.  Meanwhile the Russell demonstrated divergent strength.  The last week performance of each major index is shown below:

On Friday the NASDAQ printed a neutral extreme down.  The day began gap down in range.  The morning was spent attempting lower but with sellers being absorbed on the bid.  Then we went up and closed the overnight gap before drifting into the lower quadrant by the end of the day.

Neutral extreme.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6874.25 before two way trade ensues.

Hypo 2 buyers defend ahead of overnight low 6898.75 setting up a move to take out overnight high 6947.75.  Look for sellers up at 6963 and two way trade to ensue.

Hypo 3 stronger sellers trade us down to 6832.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Friday gap down after an overnight session featuring extreme range on elevated volume. Price was balanced for most of the overnight session before a wave of selling hit around 8:15am New York.  As we approach cash open prices are hovering along the Thursday low.

There are no important economic events today.  It is front-month option expiration day.

Yesterday we printed a neutral day.  Started out gap down in range, buyers close gap, push RE up, briefly take out Wednesday high, sellers at our hypo 3 price level, then traverse the entire range and go RE down, putting us neutral, excess low formed, back to the mean by close.

Neutral.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 6905.50.  Look for buyers to target 6913.50 MCVPOC before two way trade ensues.

Hypo 2 sellers reject us down and out of Thursday low 6875 setting up a move to target the open gap at 6843 then then 6832.75 before two way trade ensues.

Hypo 3 stronger sellers press down to the 6800 century mark 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 normal range and volume.  Price worked lower overnight, and as we approach cash open we are hovering along the Wednesday lows.  At 8:30am initial/continuing jobless claims data came out mixed.

Also on the economic calendar today we have leading index at 10am and a 10-year TIPS auction at 1pm.

Yesterday we printed a normal variation up.  The day began gap up and with sellers unable to quite fill the small gap.  Instead buyers stepped in and drove higher a few times, stalling ahead of the Monday high and settling into two-way trade.

Heading into today my primary expectation is for sellers to test down through overnight low 6898 and close that gap down at 6890.50 then continue lower, down to 6871 before two way trade ensues.

Hypo 2 stronger sellers trade us down to 6843 before two way trade ensues.

Hypo 3 buyers work into the overnight inventory and close the gap up to 6937.50 setting up a move to take out overnight high 6944.50.  Look for sellers up at 6959 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Wednesday flat after an overnight session featuring normal range on elevated volume.  Price worked sideways overnight in a balanced manner.  At 8:30am housing starts and building permits data came out below and above expectations, respectively.

Also on the economic calendar today we have industrial/manufacturing production data at 9:15am and crude oil inventories at 10:30am.

Yesterday we printed a normal variation down.  The day began gap down below the Thursday-Friday-Monday range.  Sellers drove lower off the open to prices unseen since last Wednesday before a sideways chop took hold.  Said chop went range extension down briefly before reverting back to the daily mean.

Heading into today my primary expectation is for sellers to press down through overnight low 6875.50 setting up a move to target the open gap at 6843.  Look for buyers at 6841 and two way trade ensuing, perhaps marking the low-of-the-week.

Hypo 2 buyers work up through overnight high 6907 setting up a test above Tuesday high 6817.25 before two way trade ensues.

Hypo 3 stronger buyers drive up to 6958.50 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

 

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NASDAQ future are coming into the week gap up after an overnight session featuring elevated range and normal volume.  Price worked up beyond the Friday high overnight before settling into balance right along the Friday range high.

The economic calendar is light this week.  Today we have only to be aware that the US Treasury is auctioning off $48Bln in 3-month and $42Bln in 6-month T-bills.

Crypto currency traders will likely be paying close attention to New York city this morning.  At 9:40am Federal Reserve banker Bullard is speaking at a crypto conference in the city.  Central banking meets ‘decentralized’ money supply.

Last week kicked off with a rally.  Buyers extended beyond the trend day printed two Friday’s back then the week became quite choppy.  Wednesday afternoon buyers reasserted themselves then we went gap up into Thursday.   After rallying through Thursday morning we chopped our way into the weekend.  The 1-week performance of each major index is shown below:

On Friday the NASDAQ printed a neutral day.  The day began gap down, in-range, and after a choppy open buyers stepped in and closed the overnight gap then briefly made new highs before discovering a responsive seller.  Then we went range extension down, putting us neutral, before ultimately rallying back to the mean late in the session.

Neutral day.

Heading into today my primary expectation is fro sellers to work into the overnight inventory and close the gap down to 6960.25.  From here we continue lower, down through overnight low 6953.  Look for buyers down at 6948 and two way trade to ensue.

Hypo 2 stronger sellers take us down to 6918 before two way trade ensues.

Hypo 3 buyers work up through overnight high 6994.25 setting up a move to close the open gap up at 6999.25.  Look for sellers around 7000 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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For the first time in 2018 we experienced volume and range within the confined of ‘normal’ relative to a five year study of the instrument.  There have been several days with normal range, or normal volume, but not both.  This may or may not be significant.  Price worked to a new weekly high overnight before coming into balance.

The only economic event today is University of Michigan’s primary May reading of confidence.

Yesterday we printed a double distribution trend up.  The day began with a gap up and sellers unable to work into it.  Then the rest of the day was spent slowly campaigning higher prices unseen since March 19th.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 6964.75.  From here we continue higher, up through overnight high 6979.50 setting up a move to close the open gap at 6999.25 before two way trade ensues.

Hypo 2 sellers trade down through overnigh5t low 6948.50.  Look for buyers around 6917.75 and two way trade to ensue.

Hypo 3 stronger buyers work up to 7022.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Thursday gap up after an overnight session featuring normal range on elevated volume.  Price worked higher overnight, pausing briefly as we explored levels unseen since late-March, and ultimately spending the night campaigning higher.  At 8:30am Initial/Continuing jobless claims data came out better-than-expected and CPI data came out mixed.

Also on the economic docket today we have a big Treasury auction; at 1pm the US Treasury will auction off $17 billion in 30-year notes.  At 2pm there is a monthly budget statement, and after-market-close NVIDIA is set to report earnings.

Yesterday we printed a double distribution trend up.  The day began gap up, out-of-range.  Sellers worked into it and soon found a strong responsive bid.  Buyers became initiative ahead of lunch and pressed higher before coming into balance at the highs late in the afternoon.

Heading into today my primary expectation is for sellers to wok into overnight inventory but stall around 6907.75 setting up a move to take out overnight high 6823.50.  Look for sellers up at 6963.25 and two way trade to ensue.

Hypo 2 sellers work a gap fill down to 6896 and continue lower, down through overnight low 6888.75.  Look for buyers down at 6879 and two way trade to ensue.

Hypo 3 stronger sellers trade us down to 6832.50 effectively eliminating Wednesday’s rally.

Levels:

Volume profiles, gaps, and measured moves:

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