NASDAQ futures are coming into Tuesday gap up after an overnight session featuring elevated range and extreme volume.  Price steadily campaigned higher overnight, taking out the Monday high along the way.

On the economic calendar today we have factory/durable goods orders at 10am then a 4-week T-bill auction at 11:30am.

Yesterday we printed a double distribution trend up.  The day began with a gap down that was quickly resolved.  Then, an attempt lower was rejected when responsive buyers defended the area around last Friday’s NVPOC.  We spent the rest of the day working higher, up through overnight high and beyond, eventually testing above last Thursday’s trend down before close of business.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6877.  From here we continue lower, down through overnight low 6876.  Look for buyers ahead of 6850 and two way trade ensues.

Hypo 2 gap-and-go higher up through overnight high 6926.  Look for to defend the NVPOC from 2/28 (last day of February) up at 6950 and two way trade to ensue.

Hypo 3 stronger buyers take us up to 6960 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Monday gap down after an overnight session featuring extreme range and volume.  Price briefly worked above the Friday high before settling into balance.

On economic calendar we have ISM non-manufacturing/services data at 10am, then a 3- and 6-month T-bill auction at 11:30am.

Last week markets began strong but by Tuesday sellers stepped in.  The selling accelerated through the week before finding a strong responsive buyer late Friday.  The last week performance of each major index is shown below:

*note the relative strength of the Russell

On Friday the NASDAQ printed a double distribution trend up.  The day began with a gap down to a new low on the week.  The rest of the day was spent steadily campaigning higher.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 6805.50.  This sets up a move to take out overnight high 6833.  Look for sellers up at 6845 and two way trade to ensue.

Hypo 2 sellers gap and go lower, take out overnight low 6742.50.  Look for buyers ahead of 6700 and two way trade to ensue.

Hypo 3 stronger buyers trade us up to 6872.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Sometimes interesting things happen inside a data set.  A rare quirk that makes you remember the specific rules of your system.  Today’s IndexModel reading is the exact same as the hybrid Exodus score, so the spread between the two is zero.

This has never happened.

If the IndexModel score were one one hundredth lower, it would trigger the bunker buster signal—my favorite signal—an alert of ultra-violent markets that knife lower and ultimately form a tradeable low.

But instead the model is neutral.

I have been bearish based off of extreme model signals many moons ago, back on February 4th.  I laid into Jerome Powell pretty hard last week, and I feel bad now.  He is probably a decent dude, I just saw the uncertainty he introduces to the market, and being bearish, I overly-criticized him to fit my narrative.

That being said he does look soft as pudding, and he is a new character on the scene.

Our authoritarian leader is adding to the uncertainty by meddling with huge economic levers.  I had to dust off the old macro-economics book and chart out a few tariffs as a refresher.  Overall I think it is a bad idea.  We do not like central planning in America.  It seems to work for China.  They will literally force an entire village of humans to move into apartments in some other city.  And it works.

Like some good central planning would be to force everyone in Flint to move to Detroit.  Detroit has everything they need and it is a waste of time, people living out in Flint.  There is no good reason for humans to live in Flint.

But we do not like central planning in America.  Libertarians really don’t like central planning.  I thought republicans didn’t either, but who knows anymore how those bible freaks like to get off.

With algos whispering in my ears, and global economic saber rattling, I am taking the upcoming week real slow, and while I suspect we are in the middle of a correction, I am cautiously optimistic about next week.

TBD

Exodus members, the 172nd edition of Strategy Session is live, go check it out!

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NASDAQ futures are coming into Friday gap down after a session featuring extreme range and volume.  Price worked lower overnight and as we approach cash open price is hovering below the Thursday low.

On the economic docket today we have U of Michigan sentiment at 10am.

Yesterday we printed a double distribution trend down.  The day began gap up, which was quickly filled, then after some violent two-way action price gave way to selling.

Then we went into balance.  But right after lunch President Trump announced a saber-rattling steel and aluminum tarrif directly targeting the Chinese, who are enjoying the end of their annual holiday, Chinese new year.  It sent markets careening lower into the end of the day.

Heading into today my primary expectation is for sellers to press down to 6600 before two way trade ensues.

Hypo 2 buyers attempt back into Thursday low 6689 but are rejected, sending us down to 6600 before two way trade ensues.

Hypo 3 buyers regain Thursday low 6689 and work up to 6764 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 extreme range and volume.  Over 100k contracts traded as price worked deep down into last Friday’s trend up.  At 8:30am initial/continuing jobless claims data came out mixed.

Also on the economic docket we have ISM manufacturing at 10am.

Yesterday we printed a neutral extreme down. A violent morning auction eventually gave way to sellers who briefly poked below the Tuesday low.  Then a strong bid came in and worked up through IB high.  Then we traversed the entire range again, eventually closing on the lows.

Neutral extreme.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6881.  From here we continue lower, down through overnight low 6823, setting up a move down to 6791.25 before two way trade ensues.

Hypo 2 buyers press up through overnight high 6898.75 and tag 6906.75 before two way trade ensues.

Hypo 3 stronger sellers close the gap down at 6789.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Wednesday gap up after an overnight session featuring elevated range on extreme volume.  Price made a new weekly low overnight before discovering a bid and trading back near the Tuesday midpoint.  At 8:30am GDP data came out better than expected.

Also on the economic docket today we have pending home sales at 10am and crude oil inventory and 10:30am.

Yesterday we printed a double distribution trend down.  The day began with a violent two-way auction which eventually gave way to selling once the world heard Jerome Powell speak to Congress for the first time.  The selling continued, methodically, right down to the open gap left behind from last Friday—down at 6909.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6917.50.  From here sellers continue lower, down below overnight low 6893.25.  Look for buyers just below at 6890.50 and two way trade to ensue.

Hypo 2 buyers gap-and-go up through overnight high 6945.75 and continue higher, up to 6977 before two way trade ensues.

Hypo 3 stronger buyers trade up to 7000 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

 

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NASDAQ futures are coming into Tuesday flat after an overnight session featuring elevated volume and normal range.  Price was balanced overnight and traded along the upper quadrant of Monday’s range.  At 8:30am Advance goods trade balance and Durable goods orders both came in below expectations.  At 9am the Case-shiller home price index came out better than expected.

Also on the economic docket today we have consumer confidence at 10am.  At the same time, new Federal Reserve chief Jerome Powell will begin testifying to the House Financial Services Committee.  This will be our first time hearing how the new Fed chair handles Q&A in Congress.

There are also 4- and 52-week T-bill auctions at 11:30am.

Yesterday we printed a double distribution trend up.  The week began with a gap up and early drive higher.  The morning featured a bit of two-way action before buyers ultimately stepped in and initiated new risk, slowly trending the market higher for the rest of the day.

Heading into today my primary expectation is for buyers to work up beyond overnight high 7009.  From here buyers continue higher, up to 7018.50 before two way trade ensues.

Hypo 2 sellers press down through overnight low 6977.25, setting up a move to target the naked VPOC at 6960.  Look for buyers ahead of 6946.50 and two way trade to ensue.

Hypo 3 stronger sellers work a full gap fill down to 6923.50 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 and volume.  Both measurements are the highest seen since election night in November 2016.  Partially driving the action was earnings from Big Tech, including Apple, Amazon, and Google.  Apple is a touch lower than its Thursday close, Google lower, and Amazon higher.  At 8:30am non-farm payroll data came out strong.

Also on the economic docket today we have factory/durable goods orders at 10am and U. of Michigan will issue their final read of January sentiment at 10am also.

Yesterday we printed a neutral extreme down.  The day began with a gap down just below the Wednesday range.  Buyers worked the gap filled but could not rally up beyond the Wednesday high before sellers stepped in and worked price back down to the lows—taking out overnight low late in the session and closing the day near session low.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 6896.25.  From here we continue higher, up to 6900 before two way trade ensues.

Hypo 2 stronger buyers take us up to 6927.75 before two way trade ensues.

Hypo 3 sellers push down through overnight low 6844.50 and trade down to 6831.25 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 all over the place during extended trade.  We briefly took out the Wednesday cash low then rallied back up near the highs as investors reacted to earnings out of Facebook and Microsoft.  Then, as the evening progressed we sold off, non-stop, traversing the entire range of a large balance that has been building since January 29th.  At 8:30am Initial/Continuing jobless claims data came out mixed.

Also on the economic docket today we have ISM manufacturing/employment at 10am.

After the bell Apple, Google, and Amazon report earnings.  These are major, market moving events.

Yesterday we printed a normal variation down.  The day began gap up.  And after a “farewell Yellen” morning raly up through overnight rally we stalled.  We stalled just 1.5 points ahead of the open gap left behind on 1/29.  This was a slight hint of weakness.  From then on the market began working lower, closing the overnight gap before finding a responsive bid late in the day.

Heading into today my primary expectation is for buyers to work into the overnight inventory and test back up into the Wednesday range 6922.  Look for buyers to succeed and continue higher, up to close the overnight gap up at 6950.75 before violent, choppy two-way trade ensues.

Hypo 2 sellers press down to 6880.75 before violent choppy two way trade ensues.

Hypo 3 stronger sellers take us down top 6850 before violent choppy two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Wednesday gap up after an overnight session featuring elevated range and volume.  Price was balanced overnight, briefly poking above the Tuesday high during the POTUS SOTU address.  As we approach cash open price is hovering just above the Tuesday high.

Today is a transition day, economically and socially.  A sad day for many.  Fed chair Yellen, who has presided over one of the strongest market ever, will finish her final rate decision meeting today at 2pm.

Other less important economic items include pending home sales at 10am and crude oil inventory at 10:30am.

Also and remember, Microsoft and Facebook report earnings after the bell.  Alibaba reports before market open Thursday.

It is also January 31st.

Yesterday we printed a normal variation up.  The day opened pro gap down and a battle ensued off the open.  Sellers pressed down through last Tuesday’s low before finding a strong responsive bid late-morning and choppy, two-way trade ensuing.

Heading into today my primary expectation is for a gap-and-go ‘farewell J.Yell’ rally higher.  Look for buyers to reject a move back into the Tuesday range 6969.25 triggering a rally up to the gap at 6992.50 ahead of the FOMC decision.  Use 3rd reaction after the Fed decision to dictate direction into the close.

Hypo 2 sellers to work back down into the Tuesday range 6969.25 and close the overnight gap 6936 before continuing lower thorough overnight low 6935.25.  Look for buyers ahead of 6920.  Use 3rd reaction after the Fed decision to dictate direction into the close.

Hypo 3 stronger buyers rally us to 7017.50 ahead of FOMC decision.  Use 3rd reaction after the Fed decision to dictate direction into the close.

Levels:

Volume profiles, gaps, and measured moves:

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