The Nasdaq globex session was one again busy and once again the scene of aggressive selling until early this morning when buyers stepped in and stabilized the action just ahead of yesterday’s session lows.

The economic calendar is seemingly busy today but mostly with low/medium impact events including the initial/continuing jobless claims (came in lower than expected) at 8:30am (muted reaction), Markit Manufacturing PMI at 9:45am, New Home Sales at 10am, Natural Gas storage stats at 10:30am, and Kansas City Fed at 11am.

The Nasdaq’s behavior is likely to take its cues today from the behavior the FB shares after they reported yesterday evening. Its shares have been active overnight as well. Also, after market close we will here from tech juggernauts Google, Microsoft, and Amazon.

Yesterday we printed a normal variation up marking the third up day (2.5 up day perhaps, given Tuesday’s normal print) in a row. Sellers were active at the open but the auction reversed during the initial balance and worked higher. Sellers pushed in near the close.

Heading into today, my primary expectation is for buyers to push into the overnight inventory to close the overnight gap up to 4446. I will look for them to overshoot this area before finding sellers up near 4453.75 who work us back down to 4429 and two way trade ensues.

Hypo 2 is sellers push off the open to take out overnight low 4418. Look for responsive buyers near 4415 and two way trade ensues with sellers sustaining price below 4441.

Hypo 3 is a drive up through yesterday’s high 4457.50 and a push to target the open gap left behind on March 2^nd up at 4478.75.

Hypo 4 is drive down through 4414.75. If seller can take trade down through 4400 a liquidation may take hold and push us down to 4355.

Levels:

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Traders were busy overnight pushing the Nasdaq around. Price managed to print an abnormal 47.75 point range downward and starting around 6am traders have nearly gone round trip on the range, taking us back to positive as we head into cash open.

Economically, we have Existing Home sales at 10am and Crude/Distillate inventories at 10:30am. KO,BA, and MCD are some of the big players who reported earnings premarket, and after the close we’ll hear from FB, T, QCOM, and EBAY.

Yesterday we opened gap up and printed a normal day with no range extension. We’re currently priced to open on the top-end of its range.

Heading into today, my primary expectation is for sellers to work into the overnight inventory and push dwon to 4427. From here I will look for buyers to step in and start working toward the overnight high 4446.25 to ultimately target the HVN at 4450.75.

Hypo 2 is buyers drive off the open, take out 4446.25 (ONH) early and test through 4453.25. If they can sustain trade above this level then look for a run to new high on the Nasdaq.

Hypo 3 is sellers responds at 4450 and reverse us down through 4426 setting up another tour of the choppy range into the end of the week.

Hypo 4 sellers push into overnight inventory off the open and sustain trade below 4426 to target the overnight low 4398.50.

Levels:

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Nasdaq futures are up on abnormal volume and managed to print an abnormal 2^nd sigma range as well. The globex session managed to print out a low by about 6pm eastern time and spent the rest of the session trading higher. Around Europe open it began trading lower but found initiative buyers around 4417.

The economic calendar is quiet today and the market is more likely to take its cues from natural order flow, earnings, and macro currents.

Heading into today my primary expectation is for sellers to work into the overnight inventory and attempt a gap fill. If they can close the range gap (4417) they might have a chance at it. However, early on I expect buyers to defend ahead of 4417 and make a push to take out overnight high 4441.

Hypo 2 is buyers drive off the open, squeezing higher to target the HVN at 4450.75 before finding responsive sellers and 2-way trade ensues.

Hypo 3 is a full gap fill down to 4407.25 and a break of overnight low 4402.75. This may lead to a liquidation especially if trade goes below 4396.50.

Levels:

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Range is a touch above first sigma overnight on normal volume as we head into a fresh week. Friday the market opened to a pro gap down and the selling continued throughout most the session. By about 2:30pm however we formed a decent looking excess low and the auction showed early signs of changing direction.

Yesterday the Chinese announced a reduction to their reserve ratio. It led to choppy trade in Shanghai but has seen a favorable reaction in US markets. The economic calendar is quiet today. At 8:30am we had Chicago Fed National Activity which did not generate a reaction from the market. At 9:45 there are some details coming out of the ECB regarding their QE purchases.

Morgan Stanley is trading higher in the pre-market after reporting earnings and after the close attention will be on Big Blue (IBM) as they report their first quarter results.

We are currently set to open inside the fast liquidation zone from Friday. Opening in this thin zone and the fact we are at much different prices then Friday’s close mean we are likely to see other time frame active on the open.

Heading into today, my primary expectation is for sellers to push into the overnight inventory and test down to 4355. From here I will look for buyers to come in and work higher for the session, targeting 4388.50.

Hypo 2 is buyers push off the open and find responsive selling up near 4388.50 and two way trade ensues.

Hypo 3 is sellers work down through overnight now 4348.75 and continue to 4339.75 before finding responsive buying.

Hypo 4 is a drive higher, up through 4390 with a stretch target of 4406.75.

Levels are highlighted below:

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Nasdaq futures are lower overnight. Reports of widespread failure by Bloomberg Terminals may be at least partially to blame for the selling which accelerated around 5am. One may think volume would be low if participants were without data, however quite the contrary, volume was elevated to second sigma as was the range.

CPI data came in lower than expected and so far we have not seen any reaction in price. At 10am The primary read of U of Michigan data is out.   The primary read has often been a source of fast intraday Nasdaq moves. Also at 10am we have Leading Indicators and at 1pm energy traders will keep an eye on the Baker Hughes Rig Count.

Yesterday we printed an neutral day, the second neutral day in a row. Price settled right in the middle of the range however, which was unlike Wednesday’s neutral extreme day. Now, given the context of Wednesday’s neutral extreme, it is likely the initiative buyers seen Wednesday will be underwater due to this morning’s developments. Whether they can make a strong and aggressive responsive buy today will be telling. If not, we may see liquidation take hold.

Headed into today, we are priced to open on the low end of Tuesday’s range. The naked VPOC just above at 4386.25 is likely to attract price, as is the overnight gap up to 4414.25. However, today we are dealing with a pro gap, thus it will take significantly more resources to fill.

My primary expectation is for buyers to push into the overnight inventory and trade up to 4386.25 before finding sellers attempt to work down to the overnight low but struggle to take out 4363 and find responsive buying. Two way trade ensues.

Hypo 2, sellers gap and go lower, taking out 4363 early on and trigger a liquidation move down to 4337.

Hypo 3, strong buyers off the open work up to the range gap 4401 before finding responsive sellers who defend the range and churn us back down to 4386.25.

Hypo 4 full gap fill up to 4414.25 then a run for overnight high 4417.50 with a stretch target of the NVPOC at 4435.25.

Levels:

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Nasdaq futures are down overnight on an elevated range and normal volume. Price managed to exceed yesterday’s RTH high by 2-ticks before falling back through the entire daily range.

Pre-market we had Initial/Continuing jobless claims data which was mixed and Housing Starts which came in lower than expected. At 10am the Philadelphia Fed data is out and at 10:30am Natural Gas storage.

Yesterday we printed a neutral-extreme up day after the range extension down was quickly rejected and buyers put together an afternoon rally. The profile left behind had a pronounced pocket from 4417.25 – 4411.75. I would expect this area to trade fast on a revisit and afterward we’re likely to spend some time filling it out.

Heading into today we are set to open on the low end of yesterday’s range. My primary expectation is for buyers to work into the overnight inventory and attempt at gap fill. If they can trade up through 4411.75 they likely don’t see much friction on their quest to 4421.50. Then I will look for 2-way trade chop to ensue.

Hypo 2 is sellers defend the volume pocket and start working lower to target 4386.25 then choppy conditions.

Hypo 3 is buyers push the gap fill and continue on to take out the overnight high 4429.50 and target the NVPOC at 4435.

Hypo 4 sellers take out 4380 before finding a responsive bid.

Levels:

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Tax day is upon us. This day often marks a turning point in the market. Take last year, for example, we were all freaked out by the ultra-violent marketplace. Then, as if a switch was turned, we gracefully ascended from about tax day thru to 4^th of July.

This year we have little to fear. Markets are behaving well, the Russell is undergoing a major breakout, and oil has a bid. My hypothesis of a down week calls for Wednesday strength, thus I will stick with my cautious theme.

The Nasdaq trader higher overnight after catching a bid around 3am. No particular economic event stands out at that time. Around 10pm the China GDP data came out in line and on deck for today we have Industrial Production at 9:15am, NAHB Housing Market Index at 10:30am, Crude/Distillate Inventory at 10:30am, and Fed Beige Book at 2pm.

Intel traded higher last night after reporting, BAC is slightly lower after their premarket earnings. On deck this evening are NFLX and SNDK, while C, and GS are set to report tomorrow BMO.

Taking to the chart, we can see the 2-way conditions present. We started the week continuing to explore higher prices. By mid morning the market managed to find sellers and roll. That selling continued into Tuesday before managing to print a decent looking low (excess wicks on candles) before firming up into the close.

Heading into today, my primary expectation is for action early on to fizzle out relatively soon and put us into a holding pattern ahead of the Beige Book. Look for sellers to work into the overnight inventory and test down to 4397. Here I will look for buyers to step in and take out overnight high 4410.75 to target 4414.75 before two way trade ensues.

Hypo 2 buyers take out 4415 early and set up a leg to 4435.25

Hypo 3 we test down to 4381.50 – 4378 before finding buyers and balancing out below 4398.

Levels are highlighted on the following market profile chart:

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Range elevated just a touch beyond normal overnight while volume came in normal during globex. The market continued pushed lower overnight before finding buyers around Friday’s session low to bring us back flat headed into Tuesday. Advance Retail Sales came in a bit softer than expected at 8:30am and the data encouraged a bit more buying.

This is where the week starts becoming interesting. WFC and JPM earnings are out this morning and neither has made a dramatic premarket move. The financial sector has coiled over time and we may see the compression resolve as the banks earnings continue to roll in. Also important is tonight’s GDP data out of China. All eyes are on the red giant as its stock market soars. Finally, the Nasdaq is likely to be reactive to the INTC earnings scheduled for release after market close.

Yesterday the week started with a small gap up then an open drive higher. Price managed to tag the naked VPOC at 4438.25 and go slightly beyond it before stalling out. Sellers then slowly worked the market lower before accelerating down through the open drive to extend the range lower.

Intermediate term conditions are neutral, but overall context is bull.

Heading into today, my primary expectation is for sellers to make a push to test 4395. Look for responsive buying here. Choppy conditions between 4395 and 4405 give way to another leg lower to target 4382 and a stretch target of 4379 before 2-way trade resumes.

Hypo 2 is buyers push off the open to 4415 where responsive sellers are found and two-way trade ensues with buyers sustaining above 4395.

Hypo 3 is buyers make an aggressive push back above 4415 which leads to a second leg up to 4429.25.

Levels are highlighted below:

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Part of the reason I work with market profile is it allows me to envision how the day might progress. The idea is simple. Going back and reviewing a market profile chart shows you how markets often trade in statistical bell curves. Therefore, if you come into a session with a slightly incomplete bell curve, you and visualize what type of trade would be needed to smooth it out.

The economic calendar is quiet to start the week and earnings are starting to roll in. But for all intents and purposes Nasdaq futures will be left to their own device today due to limited external factors.

What was constructive about last week was how we auctioned each price level thoroughly before advancing to the next. The prior auctions that took place from about 4377 – 4425 were fast jerks through price. When instead each level is debated as we go, it sets a better foundation. See below:

Heading into today, my primary expectation is for buyers to continue exploring higher prices. However, I will be looking for signs of responsive sellers ahead of 4425 and two way trade to ensue. This is the green hypo on the below chart.

Hypo 2 is buyers continue exploring higher prices, trade up through 4425 early on and sustain trade at these levels before setting up a second leg to 4440.

Hypo 3 is sellers go to work off the open and churn us down below 440 before finding responsive buyers and 2-way trade ensues. This is the orange hypo on the below chart.

Hypo 4 sellers take out 4395 early and set up a fast leg down to 4382.25.

Chart & Levels:

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Nasdaq futures are set to open flat after spending the globex session consolidating along the upper-end of Thursday’s range.   The economic calendar was quiet this morning and has little scheduled for this breezy Friday. Around 12:20 Fed’s Kocherlakota is scheduled to speak, but these talks have not carried much weight recently. At 1pm energy traders will have a look at the Baker Hughes Rig Count and at 2pm the US Monthly Budget Statement is out.

Yesterday the Nasdaq printed a neutral extreme day. Bulls used a tactic recently employed by sellers (Tuesday, 4/7) and made a late-day second range extension. Of day-types generally observed by market profile theorists, the neutral extreme carries one of the highest directional convictions. Thus when Tuesday printed one, it likely enticed bears into thinking they could build off it. When Wednesday opened strongly against them it may have created tinder. Today it will be the bull’s job to hash out whether they truly meant business with their intra-day and late-date initiative buying.

Location wise, we are trading in the fast Fed reaction range (about 4410 – 4375) where price can move fast. If we instead build out lots of time and volume at these prices, that would suggest a significant sentiment shift is underway.

Heading into today, my primary expectation is for buyers to continue exploring higher prices. Look for a move to take out overnight high 4403 and continue higher to target 4414.50. From here to about 4418 I will look for responsive sellers to come in and 2-way trade to ensue.

Hypo 2 is sellers push down though overnight low 4393.25 and accelerate us down to 4382.25. From here to about 4379.25 I will look for signs of responsive buyers and 2-way trade to ensue.

Hypo 3 is buyers take out 4418.25 early and sustain trade above it, setting up for a drive higher to 4440.

Hypo 4 is we fall down through yesterday’s range and test out 4365.

Level are highlighted below:

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