NASDAQ futures are priced to gap up into Wednesday after an overnight session featuring elevated range on normal volume.  Price continued working higher during Globex after a trend up took hold all day yesterday.  The market continued higher, up to the 04/26 range before coming into balance.

The economic calendar is spattered with medium impact events today.  At 9:45 we hear Market Service PMI, at 10:30am crude oil inventories, at 11:30am there is a 2-year Floating Rate note auction, and at 1pm they’re auctioning off 5-year notes.

Yesterday we printed a trend up, conviction day.  The session started with a gap up to the top of Monday’s range that was quickly followed by an opening drive.  Buyers were initiative well-beyond the first hour of trade, pushing range extension up just after 10:30am and continuing to slow grind higher for the remainder of the session.  We did start to see value for near the end of the day, giving the profile a slight P-shape.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4445.75.  From here the continue lower to take out overnight low 4443.  Look for responsive buyers at the low volume node print at 4440 before two way trade ensues.

Hypo 2 sellers cannot fill overnight gap.  Instead responsive buyers (responsive relative to the open, initiative relative to yesterday’s close) step in and work price higher.  They take out overnight high 4472.75 and continue working higher to target 4492.50 before two way trade ensues.  Stretch target is 4500.

Hypo 3 strong sellers take price down, close overnight gap 4445.75 and take out overnight low 4443 early.  Then they sustain trade below 4443 setting up a move to 4418 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are set to gap up after an overnight session featuring elevated range on normal volume.  Price continued working lower during the evening, extending the late-day selling from Monday, before finding a strong responsive bid at the upper boundary of lower value and traversing the entirety of yesterday’s range.  The rally started around 3am.

On the economic calendar today we have New Home Sales at 10am.  This afternoon the U.S. is auctioning off lots of debt.  We have the 52-week and 4-week T-Bill auctions at 11:30am and the 2-year note auctions at 1pm.  These short duration note auctions will be followed closely by traders as the yield curve starts to flatten.

See Also – Danger: The Yield Curve Is Flattening

Yesterday we printed a normal variation down.  Value was attempting to migrate higher in the morning before we settled into balanced, two way trade.  Just after yesterday’s T-bill auctions [around 11:30am] sellers became more aggressive.  Eventually, by late afternoon they managed to push the market range extension down.  NASDAQ futures ended the day at session low.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the overnight gap down to 4352.75.  Look for a responsive bid right around these levels and two-way trade to ensue.

Hypo 2 sellers only work the half gap, trading down to about 4362.25 in choppy trade before responsive buyers step in.  We then go higher and take out overnight high 4382.25.  The auction stalls out just above overnight high, around 4385.50 and two way trade ensues.

Hypo 3 buyers gap-and-go higher.  Take out overnight high 4382.25 and sustain trade above 4385.50 early on, setting up a move to test 4397.  Look for a probe of the 4400 century mark before two way trade ensues.  Stretch target is 4418.

Hypo 4 strong selling, perhaps a drive after the T-bill auctions, fills the overnight gap down to 4352.75 then continues lower to take out overnight low 4341.75.  This opens the gates to explore lower value.  Target VPOC at 4318.75.  Stretch targets to downside are VAL levels at 4311.50 then 4298.50.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are set to start the week flat after an overnight session featuring normal range and volume.  Price held Friday’s range with sellers defending just below the Friday high and buyers defending just above the Friday morning conviction drive.  Rotations were equal, with bulls and bears taking the same sized swipes at each other.

The economic calendar is quiet to start the week and earnings season is coming to an end as we close out the month of May.  At 9:45am we have Markit Manufacturing PMI data due out, and at 11:30am both a 3- and 6-month T-bill auction are scheduled.

Last week the NASDAQ set balance by taking is already slightly balanced structure and firming it up by testing both the upper and lower boundaries of value.  Then Friday the bulls made a conviction drive off the open, successfully pinning price just above value to close out option expiration week.  The move, however, did not attract initiative buyers, and the resulting profile resembled the letter ‘p’.  This is indicative of a short squeeze.

Heading into today my primary expectation is for sellers to work down into the overnight inventory and take out overnight low 4348.25.  Look for a move to continue lower, down to 4342.75 before responsive buyers step in and two way trade ensues.

Hypo 2 strong selling takes price down through overnight low 4348.25 and sustains trade below 4342.75 setting up a move to target 4323.  Look for responsive buyers down at 4311.75 then two way trade to ensue.

Hypo 3 buyers work up through overnight high 4378.25.  Look for responsive sellers up at 4381 then 4385.25 before two way trade ensues.

Hypo 4 strong buyers take out overnight high 4378.25 then sustain trade above 4385.25 setting up a move to test 4396.25.  Stretch targets are the 4400 century mark then 4418.

Levels:

Volume profiles, gaps, and measured moves:

 

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NASDAQ futures are priced to start the session gap up after an overnight session featuring normal range and volume.  Price worked higher overnight to return price back to the NASDAQ pin point before settling into two-way trade.  This upward action put price up through yesterday’s high.

On the economic docket today we have Existing Home Sales at 10am and Baker Hughes Rig count at 1pm.

Yesterday we printed a normal variation down.  Price worked lower, fast at first, down to about 4290 before stalling out and fading back up toward the mean, or value, or the pin point…whichever you prefer.

Heading into today my primary expectations are low.  Price is right on value and I am looking for chop and sideways, range bound between 4344 and 4310.

Hypo 2 sellers work into the overnight inventory and close the gap down to 4317.25 then take out overnight low 4314.75 before buyers step in and two way trade ensues.

Hypo 3 buyers push up through overnight high 4341.50 and continue higher, up to test 4360, luring in ambitious long, before reverting back to the pin at 4340.

Levels:

Volume profiles, gaps, and measured moves:

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Welcome to the holding pattern, a place where expectations of movement are squashed by giggling market makers who ensure your stock options expire worthless.

NASDAQ futures are set to open gap down after an overnight session featuring normal range and volume.  Price held yesterday’s range while forming both a weak high and low, with the globex low looking more vulnerable than the high.  At 8:30am Initial/Continuing Jobless claims data was in-line with expectations, Chicago Fed National Activity index came in better than expectations, and Philadelphia Fed Manufacturing index came in well below expectations.

Also on the economic docket today we have Leading Indicators at 10am and a 10-year TIPS auction at 1pm.

Yesterday we printed a neutral day.  The session was working higher and went range extension up, pushing up through the single prints [as described in hypo 3 of yesterday’s morning report] before a huge buy program hit the NASDAQ tape:

Biggest buy program since 3/9/16 just ran on the NASDAQ??

— Raul (@IndexModel) May 18, 2016

Then, right as the minutes hit and increased the probability of a rate hike a hard sell order came to market and pushed the day into neutral territory.  Buyers then faded price back to the mean to end the session.

Heading into today my primary expectation is for sellers to take out overnight low 4313 and continue lower to test the 4300 century mark.  This will suck in short sellers, who will then be squeezed as price traverses back up through the range to close the overnight gap up to 4333.50 before two way trade ensues.

Hypo 2 buyers work into the overnight inventory and close the gap up to 4333.50.  From here they set their sights on overnight high 4340.75.  Look for responsive sellers around 4350 and two way trade to ensues.

Hypo 3 strong sellers push below yesterday’s low 4301 and continue working lower to target 4286.75 before two way trade ensues.

Hypo 4 strong buyers work to test above yesterday’s session high 4359 sucking in buyers before finding a strong seller up at 4360 and two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures dropped hard after the 2pm Minutes showed most Fed Policymakers viewed it ‘likely’ they would raise interest rates in June.

The verbiage spiked the probability of a June rate hike up over 30% per the Fed Fund futures.  Before the announcement the implied probability was just over 25%, see below:

After the minutes:

 

 

 

 

 

 

 

 

 

 

 

 

The NASDAQ is now in a neutral print.  Look for buyers to work price back up the mean:

 

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NASDAQ futures are mildly gap down heading into Wednesday trade after an overnight session featuring normal range and volume.  Price was balanced overnight, holding yesterday’s lower quadrant until around 8:30am when a hard push lower took price down to new lows on the week.  At 7am MBA Mortgage Applications came in at -1.6% and well below last month’s 0.4%.

Also on the economic docket today we have crude oil inventories at 10:30am.  More importantly, we have Fed Minutes out at 2pm.  The minutes may provide more market volatility than normal due to recent hawkish comments from a few Fed members.

SEE ALSO: FEAR THE FED

Yesterday we printed a double distribution trend down.  This came on the heels of Monday’s trend up.  This is the second time in the last 6 trading days where sellers promptly erased up-trend days in the following session.  The same thing happened last Wednesday.

Heading into today my primary expectation is for seller to lurch lower.  Look for a move to test the 4300 century mark where responsive buyers show up and make a steady campaign back up to close the overnight gap at 4321.50 before two way trade ensues.

Hypo 2 sellers push down through 4300 setting up a move to target 4286.25 before two way trade ensues.

Hypo 3 buyers work higher off the open, close the gap up to 4321.50 then target overnight high 4329.25.  This triggers a rally up to 4360 before two way trade ensues.

These hypos only apply to the morning.  After FOMC minutes we could see participants providing direction into the end of the week.

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 normal range and volume.  Balanced price action gave way to upward movement after a strong buyer stepped in around 4:30am.  The buyers stalled out just ahead of 4350–about at the upper quadrant from last Tuesday’s session.

The economic calendar is slow all week.  We have already heard earnings from most major companies. Today we have Labor Market Conditions index at 10am, also a 3- & 6-month T-Bill auction at 11:30am.

Last week we kicked off the month of May will a bull trap.  Price went trend up Monday only to gap down and hold lower Tuesday.  The rest of the week price walked lower, no real volatility, and this continued until late-Friday afternoon when a strong bid pushed into the marketplace.

Heading into today my primary expectation is for sellers to push into the overnight inventory and close the gap down to 4328.50.  Sellers continue working lower, down to 4322 but fail to take out overnight low.  Instead price works higher to take out overnight high 4347 before two way trade ensues.

Hypo 2 buyers gap-and-go higher, take out overnight high early on 4347 then sustain trade above 4350 setting up a test above last Tuesday’s session high 4360.50.  This triggers a chase and price works higher, up to close last Monday’s gap at 4369.50.  Look for responsive sellers up at 4372 and two way trade to ensue.

Hypo 3 sellers close overnight gap down to 4326.50 then take out overnight low 4318.  Sellers slide down through the air pocket formed during last Friday’s afternoon rally and price tests 4304.75 before two way trade ensues.

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Levels:

Volume profiles, gaps, and measured moves

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NASDAQ futures are coming into the first Friday of the month lower because it’s May.  The globex session featured normal range and selling as the downward price action has been orderly.  Price managed to push to a new swing low after 8:30am when Non-Farm payroll data came in much worse than expected.

See also: Huge Payrolls Miss: Non-farm Payrolls Come in at 160k, Well Below Estimate of 207k

The only other economic events scheduled for today are the Baker Hughes rig count at 1pm and Consumer Credit at 3pm.

Yesterday we printed a neutral extreme down. A choppy open gave way to buyers pushing higher.  Their try was quickly thwarted, and sellers managed to push down through the entire daily range and extend lower.  We ended the session chopping below the key 4300 level. The selling has been methodical so far, with volatility hardly inching higher.

Sticking below 4300 is what bears need to bust this balance loose. Tick tick, let's go $NQ_F

— Raul (@IndexModel) May 5, 2016

Heading into today my primary expectation is for a hard move lower off the open, fast, that quickly stalls out around 4265.  Look for responsive buyers to then start working price back up to 4300 where we chop heading into the weekend.

Hypo 2 buyers press into the overnight inventory and work back up to 4300 gap.  From here they set their sights on overnight high 4302.75. Buyers rally price through the close, up to 4324.50 before two way trade ensues.

Hypo 3 full on liquidation.  Sellers sustain price below 4265 setting up a liquidation down to 4200.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are starting the morning out gap up after an overnight session featuring normal range and volume.  Price worked higher through most of Globex before finding sellers at the same level as yesterday’s Globex session–near Tuesday’s value area high.  At 8:30am Initial/Continuing Jobless claims data came out better than expected.  The initial reaction is muted.  Investors are likely waiting to hear tomorrow morning’s Non-farm Payroll report before reacting, especially with our current auction context (see blog title).

There are no other scheduled economic events today.

Yesterday we printed a normal variation down.  A brief attempt at working higher to close the gap down was thwarted when sellers stepped in.  Price then worked lower, slowly and methodically, to take out last Friday’s low (swing low) briefly before price was bid back up into our short term balance (see blog title).

Heading into today my primary expectation is for chop.  Look for sellers to work into the overnight inventory and close the gap down to 4309.25 before finding responsive buyers and two way trade ensuing south of 4330.

Hypo 2 buyers work higher off the open and close Tuesday gap up at 4335.25.  Buyers continue higher and take out overnight high 4342.50.  Look for responsive sellers up at 4343 and two way trade to ensue.

Hypo 3 sellers work down through the gap fill, below 4309.25 setting up a move to test the 4300 century mark.  Look for two-way trade to ensue

Hypo 4 liquidation snap.  Price breaks down through 4300 sending the market down to 4275.75 before two way trade ensues.

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Levels:

Volume profiles, gaps, and measured moves:

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