Nasdaq futures are lower as we head into US cash open on a normal amount of volume. Range is also normal but entirely to the downside. The overnight session has a slight trendiness to it. The session opened right where we closed Friday and quickly moved lower. The action took us back to Wednesday’s open gap at 4204.25.

The economic calendar is quiet to start the week. We have a report on Labor Market Conditions out at 10am which is likely a low impact announcement. We also have Fed’s Powell speaking in Washington right at 4pm regarding the audit proposal. Lowes and Masco are both trading higher in the pre-market after reporting earnings. It will be interesting to see how this affects the weak charts on KBH and BZH.

Last week we traded just below our prior swing lower before a sharp buyer stepped in and reversed the auction. We spent the rest of the week exploring higher—eventually reaching upward to the top-end of our intermediate term range. There we found responsive sellers during Friday’s session when price went range extension up, flagged and then fell through the range resulting in a neutral day.

My primary expectation this morning is for buyers to push into the overnight inventory and work up to 4214.50. This is a short term pivot that will give clarity to the morning. If sellers cannot defend in this area then we head higher for a full gap fill to 4230.50 then target the MCHVN at 4233.25 and continue to a stretch target of 4245.75. However, if sellers do defend at 4214.50 then we continue working lower to test Wednesday’s low 4191.25 and target the mCVPOC at 4178.75. Here I would expect to see signs of responsive buying.

Hypo 2 is we drive lower off the gap down and tag 4178.75 early, find responsive buyers who cannot reclaim Wednesday’s range low around 4191.25 and we see anther leg lower down to test Tuesday’s low 4166.50.

Hypo 3 is a robust push higher which fills the overnight gap to 4230.50 early and overshoots it, then another big leg higher up to 4248.75.

These levels are highlighted on the following charts:

Comments »

Friday is upon us and after 4 days of upward price movement traders are wondering if Friday will see some selling. The overnight session was quiet and balanced ahead of the 8:30am NFP data. After a strong set of numbers and revisions prices went higher-lower-higher on third reaction analysis. Range and volume managed to maintain a normal 1^st sigma range and volume. Fed Plosser was speaking this morning, saying the FOMC is at a point where they are nearly forced to raise rates soon.

Coming up today we have Fed’s Lockhard speaking at 12:45pm and Consumer Credit stats at 3pm.

Yesterday we printed a normal variation-type day. Price was gap up to start the session and sellers pushed us down through Wednesday’s volume pocket to the mCLVN at 4214.50 where responsive buyers stepped in and took us up through Wednesday’s high. Sellers were unable to complete a full gap fill down to 4204.25 thus it remains open to the downside.

The normal variation resembled a P-shaped short squeeze before making a second leg higher in the afternoon shifting the shape almost into a double distribution trend. The action put us up into the range of 1/26. The full gap fill up to 4269.25 is still open. There is also an interesting LVN at 4260.75.

The auction tends to become a bit rough after 3-4 days of unidirectional movement. Therefore early on I am expecting sellers to push into the overnight inventory to close the gap to 4249.25. From there we may see responsive buyers initially but they cannot take us up through 4260.75 and we see another leg lower to take out overnight low 4245.50 and target the MCHVN at 4233.25. Stretch target is a Wednesday gap fill down to 4204.25.

Hypo 2 is buyers gap-and go to take out overnight high 4263.50 and close the gap up at 4269.25. Responsive sellers struggle to re-enter Thursday’s range ~4253.75 and we continue higher to target the MCHVN at 4285.25.

Hypo 3 is 2-way chop with slight buyer edge with range between 4240.50 and 4270.

These levels are highlighted below:

And here are the market profile levels and structures I am working with today:

 

Comments »

Volume and range expanded to 2^nd sigma overnight suggesting the session was slightly abnormal. It started off with a secondary completion wave after the market experienced an encompassing wave of selling at the end of the trading session. The secondary wave pushed through overnight and exceeded yesterday’s low and pushed deep into Tuesday’s range—trading down through the volume pocket we printed on that day before finding strong responsive buying.

Once the auction reversed higher it continued doing so, nearly uninterrupted, up to now, where we are trading about 20 points higher from yesterday’s close. At 5am Fed’s Rosengren was giving an early bird lecture on Sovereign Risk (apropos), at 7am the Bank of England rate decision and Asset Purchase Target numbers came out inline (brought buyers into the NQ), at 8:30am we had Initial/Continuing Jobless Claims and Trade Balance. At 10:30am we have Natural Gas Storage change stats for January.

Prices are higher over a 2-3 day stretch after oversold conditions. We are trading on the high end of a 7-day value range. We are also trading just below the gap zone from 01/26 (last Monday) but we have not yet closed the range gap. Yesterday was a neutral day with a double volume distribution. Intermediate term we are neutral-to-slight-bullish.

My primary expectation this morning is for sellers to push into the overnight inventory and try to fill this gap down to 4204.25. The volume pocket from 4220 to 4209.50 will be an interesting reference point for gauging their success. If they can push down to 4214.75 my expectation is elevated that they will trek all the way through to 4209.50 and a gap fill to 4209.25 where we find responsive buyers.

Hypo 2 is a balanced 2-way open with buyers defending the volume pocket ~4220 setting up for a test of the crime scene at 4242. If they do not find responsive selling then take out yesterday’s high 4243 and work up to the range gap 4246 then a stretch target of full gap fill 4269.25.

Hypo 3 is we grind slowly into yesterday’s volume pocket (4220 – 4209.50) and spend much of the session “filling it in” with 2-way chop.

These levels are highlighted below:

And here are the current market profiles:

 

 

 

Comments »

Nasdaq is trading lower premarket on a balanced structure and normal range and volume. ADP Employment change came in a bit lower than expected at 8:15am and prices saw little reaction to the news.

On deck we have ISM Non-Manufacturing at 10am, Crude-distillate inventories at 10:30am, and Fed’s Mester is talking at 12:45pm.

Yesterday the market went gap up after a strong bounce of the lows Monday only to see some early selling. Sellers pushed to test the afternoon rally and found responsive buyers who took us all the way though the initial balance to put a neutral. Buyers then sustained their strength into the close resulting in a neutral extreme print. This day-type is a high conviction day type for buyers.

Intermediate term, we are trading at the top end of a six-day range after a big gap down last week. This balance structure is inside an even larger balance structure dating back to late October. Compression-inside-compression.

Heading into today, my primary expectation is for sellers to try and push lower early on and test the LVN at 4189. Here I will look for responsive buyers who work toward closing the overnight gap up to 4215.25. Stretch target is a move up into the above gap and a targeting of the MCHVN at 4233.25.

Hypo 2 is sellers push through the LVN at 4189 and test through the pocket and down to the 6-day mCVPOC at 4178.75. If buyers are not found here then a continued move lower to test yesterday’s low 4166 and a revision to the October MCVPOC down at 4144.50.

Hypo 3 is buyers press up and close the gap to 4215.25 and push above 4233.25 to sustain a drive up to close the gap to 4269.25.

These levels are highlighted on the following volume profile chart:

Comments »

Nasdaq futures are up a few points as we head into cash open. The overnight session featured 1^st sigma range and volume (normal) trading in a balanced manner. Price extended above yesterday’s range and formed a weak, double top at 4203.25 which was also the swing high on 1/30.

Yesterday we had strong early selling which slightly exceeded our 1/29 low 4095.75 before finding a strong responsive buyer. The responsive buyers stepped in before 10:30am thus preserving the initial balance. Buyers then transitioned to being initiative in behavior in the afternoon and made a strong secondary push to close out the session.

Overall, the last 5 days of trade are overlapping but the last three in particular form an interesting view of balance. Given the week overnight high and the quality low below, my initial expectation is for price to work higher and take out the overnight high 4203.25 and continue higher to test the MCLVN 4209.50. The upper target for this move is the MCHVN at 4233.25.

Hypo 2 is a gap fill down to 4183.75 then a move up toward overnight high 4203.25.

Hypo 3 is sellers push into the overnight inventory to close the gap to 4183.75 and push through to take out the overnight low 4165.75 setting up for a move back to the MCVPOC at 4144.50.

Hypo 4 is a drive higher, take out 4233.25 early and work up toward the open gap to 4246 then 4269.25.

These levels are highlighted below:

Keep these economic events on your radar too:

Comments »

Nasdaq futures are up a bit as we head into the cash open. The overnight session was on the low end of normal range and volume in a balanced session of trade. 8:30am we head Personal Income/Spending stats, we have 9:45am Markit Manufacturing PMI, and 10am Construction spending and ISM Manufacturing. XOM is trading flat after reporting earnings trhis morning.

Friday the Nasdaq gave back about half of the rally it had Thursday from oversold conditions to settle right at the MCVPOC of our large intermediate term balance dating back to the end of October. The market is trying to explore lower prices on the short term and is did an okay job of it last week with a gap lower and so far a lower high.

Early on, my primary expectation is for sellers to come in and work the overnight inventory toward a gap fill down to 4144.75. After some two way action we continue lower to target the overnight low 4129.25 and then the NVPOC at 4121.25.

Hypo 2 is buyers push off the open and work higher to 4173.50 and then stretch to 4181.25 where we find responsive selling back toward the gap fill 4144.75.

Hypo 3 is a early drive higher above 4181.25 and continue higher to test Friday’s high 4203.25.

There levels are highlighted on the following volume profile and market profile charts:

 

Comments »

Nasdaq futures are lower as we head into cash open on an abnormal 50 point range and normal volume. At 8:30am the GDP data released was below expectations and we saw a brief pop in futures which was ultimately faded. As we come into the opening bell prices are on the low of the globex session.

Yesterday buyers were put on their heels early in the session as price pushed down into the lower edge of a multi week range and managed to turn. Price then took back more than half of the selling on Wednesday to finish the day up near the highs. Overall the week has been seller dominated since the big gap down on Tuesday.

Heading into today, my primary expectation is for buyers to push into the overnight inventory and work up to 4171.50. Here I will be looking for signs of responsive sellers (responsive relative to the opening print, initiative in nature verse yesterday’s close). They will look to target the MCVPOC at 4144.50 where we will churn through lunch.

Hypo 2 is sellers drive off the open push down through MCVPOC 4144.50 down to 4125.75 where we find responsive buyers back up to MCVPOC 4144.50 and churn through lunch.

Hypo 3 is stronger buyers push on the open, take out 4171.50 and target a full gap fill up to 4185.75. If they can sustain price above 4171.50 then look to target overnight high 4208 and stretch target of MCHVN 4233.25.

Hypo 4 is a drive down, take out 4125.75 and target a break of Thursday’s low 4095.75.

Levels:

Comments »

Nasdaq futures printed a balanced session overnight on normal range and volume. After a brief pop late Wednesday evening, price pushed lower and took out Wednesday’s low 4123.25 and found responsive buyers just ahead of the 1/20 low at 4109. Since then price has traded in a quiet 2-way manner. Earnings have sent the share price of BABA lower as well as CELG. COP is trading a bit higher. We have reports out of GOOGL and AMZN after market close. The Initial/Continuing jobless claims data at 8:30am came in a bit better than expected and we saw a bit of buying on the news.

Turning to the charts, sellers are in control on the short term timeframe. Yesterday we printed an outside day after starting the day gap up above Tuesday’s range and trading all the way though it and closing on the lows. Intermediate term is neutral as we continue working through a multi week range.

Just below the overnight low 4111.25 are some interesting price levels dating back to the last swing low. In particular, the naked VPOC at 4101.25 which we left behind when we turned upward. This level will be interesting to observe if sellers step in this AM.

Early on my primary expectation is for an open auction inside Wednesday’s range which gives way to selling. Sellers will look to take out the overnight low 4111.25 and continue down to test the NVPOC at 4101.25 where we find responsive buyers who work back into Friday’s range and up toward the MCVPOC at 4144.50.

Hypo 2 is buyers push early on and stall out near the MCVPOC 4144.25 churn a bit, before initiative sellers step in and work us lower to target overnight low 4111.25 and potentially the NVPOC at 4101.25.

Hypo 3 is an open drive higher, take out the MCVPOC at 4144.50 and continue higher to test the scene of the FOMC breakdown up at about 4172.

Hypo 4 is we drive lower and take out the NVPOC at 4101.25 and tag the MCLVN at 4083.25, if no responsive buying there then continue lower to the CHVN at 4053.75.

I have highlighted the above levels on the following volume profile chart:

Comments »

Several weak economic data points, weak reaction to earnings in MSFT and CAT and PG, and overall sentiment have the Nasdaq down over 50 points as we approach cash trade. This is pro gap territory. Interestingly, though the range is 2^nd sigma aka abnormal, it took place on a normal amount, or 1^st sigma volume. Typically these big down sessions carry some heavy volume.

At 8:30am Durable goods Orders came in much lower than expected. At 9am we have the Case-Shiller Composite, at 9:45am Markit Composite/Service PMI, and at 10am Consumer Confidence, Richmond Fed, and New Home Sales. After the bell we will hear earnings from Apple.

The NYSE is invoking Rule 48 on the market open, which may make for a choppy open.

Value started to overlap between Friday and Monday but heading into the close it seemed the market was not doing a very good job rolling over. Sellers did manage to take out Friday’s low and we had some excess wick on the upper end of the candles, but value was holding. However the overnight session has pushed us down below the Sunday-Monday Globex session low and back to where prices were the morning we heard from the ECB. It will be interesting to see if the buyers defend this level so soon after capturing it.

Early on I am looking for buyers to work into the overnight inventory and push up to the naked VPOC at 4226.50. In this level I expect to see sellers stepping in and defending and then pushing back lower to take out the overnight low 4202 and test deeper into the morning of the ECB, targeting 4171.50.

Hypo 2 is gap and go drive down. Sellers drive off the open and push through Thursday’s range to test the low at4164.50.

Hypo 3 is choppy, 2-way trade through much of the session as the market pauses ahead of AAPL earnings and tomorrow afternoon’s FOMC meeting.

Comments »

Buyers are showing some aggression as we approach cash open in the Nasdaq. The session started off weak Sunday evening with some attributing the move to the outcome of the Greek elections. The move lower around 6pm Sunday took place on light volume and buyers defended the upper edge of value formed Thursday afternoon. Once the globex auction turned around it spent the rest of the session slowly churning higher.

This week’s economic calendar starts off slow and builds in complexity. We have tons of earnings out and a heavy calendar of economic stats. Today we have Dallas Fed at 10:30am and Microsoft reporting after the bell.

Taking to the charts, we can see the Nasdaq went on a four day unidirectional streak to the upside, with Friday’s profile forming a balance on top of the range.  Typically after three days of trade in one direction we start to see price action become more two-way. After four days it becomes even more likely.

Price has so far managed to push up to the upper third distribution of volume. The current micro composite structure as we form this big range has three distinct areas of value with air pockets in between. These air pockets zones are where we see the dramatic, discovery-type moves take place. We could see downside action gain speed, given our current location. See below:

So far sellers are defending the upper region of value. Whether they can continue doing so will be my primary focus this morning. My primary expectation this morning is for a choppy, two way auction on the open with sellers a bit more aggressive. They work to fill the overnight gap to 4268 and test the lower end of Friday’s value 4255-4253.75 where we see responsive buyers. These buyers than work up toward the MCHVN at 4285.25 and potentially test above Friday’s high to tag the HVN at 4293.50.

Hypo 2 is buyers active, perhaps not allowing the overnight gap fill to 4268 before making a move to take out Friday’s high 4286.50 and testing up to 4300 where we find responsive sellers and balance out.

Hypo 3 is sellers extend below 4254 and work down through the air pocket to target the overnight low 4231.50 and the naked VPOC below it at 4226.50. I have highlighted my key market profile levels below:

Comments »