Nasdaq futures are set to gap up this Monday after trading an abnormal 50 point range during globex. Around 8pm buyers started working, and just before 11pm a large stop-run style push worked through. The move held though some 2-way action and ahead of the European markets opening it went on a secondary rally before finding sellers right as Euro markets opened.

Price is set to open inside the afternoon value zone formed last Wednesday during the trend lower. On both sides of this distribution the action can accelerate. Thus today carries an elevated risk:reward.

At 8:30am we had Personal Spending/Consumption data and saw a muted reaction. At 10am Pending Home Sales are out, and keep in mind we have German Unemployment stats out tonight.

Heading into today, my primary expectation is for sellers to work into this overnight inventory. Look for a struggle at 4338.75 but sellers manage to take out that area and work to 4323.

Hypo 2 is buyers sustain trade above 4338 and continue working higher. If they can take out overnight high 4367.50 then look for a push up through 4381 to run up the thin area to 4397.

Hypo 3 is we stick in a range between 4360 and 4340 (unlikely).

Levels:

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Nasdaq bulls were knocked around well this week by sellers who took advantage of the thin market profile left behind after the Fed back on 3/18. After sliding down through that region they used their momentum to overshoot the reaction zone and close the 3/13 gap and push through most of its range.

Futures were flat heading into the 8:30am GDP and Personal Consumption data. Also on the agenda today is the U of M Confidence data at 10am, Baker Hughes Rig Count at 1pm, and a sneaky 3:45pm Yellen speaking engagement on Monetary Policy. The initial reaction after the GDP data was selling.

Heading into today, my primary expectation is for buyer to attempt a continuation of yesterday’s rebound. If they can push above yesterday’s session high 4331 I will look for an accelerated move up to the NVPOC at 4350.75.

Hypo 2 is sellers push us below 4300 early on and sustain trade below it to set up a move toward overnight low 4297.25 then a continued exploration lower below Thursday’s low 4271.75. If responsive buyers are not found here, then it opens the door for a push down to 4250.

Levels are highlighted below:

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Nasdaq futures are running abnormally hot this morning with extreme range readings (beyond 2^nd sigma) and abnormal volume. The market managed to 1 time frame down (price discovery) up until about 6am when buyers began defending just below the 3/13 swing low. At 8:30am initial/continuing jobless claim readings initially brought more selling in but have since reversed said losses.

Also on the economic calendar today is Markit Composite/Service PMI at 9:45am, Natural Gas storage stats at 10:30am, and Kansas City Fed Manufacturing activity at 11am. Keep in mind there are also some GPD readings out Friday before market open.

The market is currently pricing a pro gap down. Any attempt to fade this move would require significant resources. The open print will be way out of balance and is likely to encourage other time frame activity.

Taking to the charts, we can see sellers probing back into the upper-most distribution of our multi-month consolidation which precluded the latest rally. Now that we have pushed through its HVN (4285.25) it is likely we test down through the other side of it which would mean a move to about 4250.

Heading into today my primary expectation is for some whipsaw at the open before buyers make an attempt higher to work into the overnight inventory. Look for sellers to defend ahead of 4308.75 to set up a move below the overnight low 4270.

Hypo 2 is a full gap fill up to 4325.50.

Hypo 3 is a gap and go lower to continue the 1 time frame trending activity.

Hypo 4 is a push below overnight low 4270 which is met by responsive buying ahead of 4250 and we balance out on the lower end of the top distribution.

These levels are highlighted below:

 

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This morning promises to be a choppy one. After a sedentary session yesterday, price and value have settled into a stable pocket with a well-established distribution both above and below our current area. Please, see more clearly what I mean below where I have marked the key reference points and a two visual hypotheses:

Adding tinder to the potential for a choppy open is the sexy world of economic releases. CPI (Feb, YoY) was out at 8:30am and firmed up more than expected leading to rate hike talk. Price initial pushed lower by has since gone unchanged off the data. Several more data will spatter out this morning including House Price Index at 9am, Markit Manufacturing PMI at 9:45am, and New Home Sales at 10am.

Heading into today, my primary hypo is sellers work down into overnight inventory and take out overnight low 4431.25 and do their best to fill the gap down to 4424.50 and target the NVPOC at 4422.25 before finding responsive buyers.

Hypo 2 is buyers defend around 4438.50 (overnight gap fill) and push up through overnight high 4449.75 and continue on to work the value area high of the upper distribution around 4457-4460.

Hypo 3 is a strong drive higher up through VAH 4460 and a gap fill up to 4472.50.

Levels highlighted below:

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Nasdaq futures are starting the week flat after rallying last week. The overnight session printed normal volume and range but did manage to take out Friday’s session low a few times before bouncing back to unchanged.

The economic calendar is quiet stateside today with Existing Home Sales at 10am as well as Fed’s Williams talking economic outlook. At 1:15pm attention will be on the European Union where Chancellor Merkel is meeting with Greek Prime Minister Tsipras for talks on Greece. They are meeting in Berlin.

Turning our attention to the charts we can see how the Nasdaq went gap up through a prior well-established value area. Price worked higher for much of Friday’s session before finding responsive sellers 1-tick ahead of closing the gap dating back to March 1st at 4472.50.

4444 serves as a helpful pivot point especially if sellers decide to work into the below gap zone today. Please see below:

Heading into today, my primary expectation is for an open auction inside Friday’s range followed by a push higher to target overnight high 4461.25. If buyers sustain trade above 4459 then look for a push to new swing high 4477.

Hypo 2 is sellers contain trade below 4448.25 and work down into the gap zone below to target overnight low 4439, Thursday’s range gap 4432.50 and a full gap fill to 4424.50. The ultimate target of this hypo is tagging the NVPOC at 4422.25.

Hypo 3 is aggressive selling takes us down through the NVPOC at 4417 and begins working down into the Fed rally. Look for signs of responsive buying down at 4400 but be cautious of a full take back down to 4355.25.

I have highlighted key market profile zones below:

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Nasdaq futures are up sharply as we head into monthly/quarterly option expiration day. No news appears to be behind this overnight action (correct me if I’m overlooking something) and heading into cash open we are working with a pro gap.

The economic calendar is quiet today. There are two Fed heads speaking—Lockhart at 10:20am in Georgia and Evans in Washington. Energy traders will likely be closely watching the Baker Hughes Rig Count at 1pm as well.

Yesterday the Nasdasq printed a normal variation with a range extension down. Overall a quiet, balancing session in the upper quad of Wednesday’s Fed day move. Once the cash session ended however prices began trading 1-time frame up.

Heading into today, my primary expectation is for buyers to build off their overnight progress by attempting a gap and go. To succeed in doing so, they will need to sustain trade above the very prevalent mCLVN at 4459. If they do, then look for a push to target the open gap up at 4472.50.

Hypo 2 is sellers defend the mCLVN at 4459 and begin working into the overnight inventory. In that case, look for swift action back down to 4437 area and a potential full gap fill down to 4424.50.

Hypo 3 is a big gap up and then sideways grind to wear out any intraday theta on options.

These levels are highlighted below:

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I spent the morning updating my charts and stats to the current market conditions and the result is overwhelmingly neutral. Nasdaq futures are trading lower on the globex session after taking out Wednesday’s session high by a few ticks. The range and volume are both on the high end of normal as traders actively debated the true value of this instrument.

At 8:30am Initial/Continuing Jobless claims data came out mixed and brought sellers in who made a new overnight low. At 10am Leading Indicators and Philadelphia Fed info will be released. At this time Fed’s Tarullo will also begins his testimony to the Senate. At 10:30am Natural Gas Storage data is out.

Turning to the charts, yesterday we printed a neutral-extreme profile print suggesting strong upward directional conviction. The major move up was news driven. Participants drove price higher after the release of the FOMC rate decision and commentary. In the wake of the move is a zipper or single prints which are vulnerable to fast selling. Should price trade down below 4400 it may setup a fast move back to 4350 to reassess the crime scene.

Conversely, there are a few price magnets just above our current prices. Just above overnight high (4435) there is a micro-composite volume point of control (mCVPOC) and a bit higher an open gap (4472.50). These areas may attract price and lead to a drift higher.

Thus, my primary expectation heading into today is for buyers to work into the overnight inventory to close the gap up to 4421.25. From here look for buyers to attempt to take out overnight high 4435 and target the MCVPOC at 4444.25.

Hypo 2 is buyers are unable to sustain trade above yesterday’s close 4421.25 and responsive sellers step in to push below overnight low 4412.75. Look for responsive buyers ahead of 4405 who stabilize the action and balanced, 2-way trade ensues.

Hypo 3 is sellers push down through 4400 and sustain trade below this level setting up a fast move down the zipper. Look for buyers at 4385 but ultimately they are run over on the way back to 4350.

These levels are highlighted below:

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What if you had a large data set that said you suck at Wednesdays? It would give a whole new sting to hump day, wouldn’t it? For reasons unbeknownst to me (I have looked over the data with a comb) my will power breaks down and old bad habits creep in by Wednesday resulting in poor trading performance.

And that’s okay because will power is finite. These days I only take the highly qualified trades and only early on. Once my will muscles are stronger I will increase duration.

Nevertheless today is incredibly important in the grand scheme of things because today we make an earnest attempt to find a tradable low. Early this morning we had MBA Mortgage Applications which had a sell, buy, sell reaction affirming the sellers are still in short term control (the number was a bit better than expectations). At 10:30am we have oil/gas inventory stats and the market is working higher from VAL already, constructive. At 2pm we have a Monthly Budget Statement, and most importantly we have the results of the Fed’s Bank Stress tests after market close at 4:30pm.

The short term trend is seller dominated. It started Friday with a motivated move out of balance. Monday price drifted higher but found a sharp responsive seller (responsive relative to Monday’s open, initiative relative to the upper balance, VITAL you understand this). Then yesterday we had a pro gap down and completion-type wave which closed down near the low of the session.

Overnight prices drifted higher on normal volume and range but were unable to reclaim the lowest seller-defended area from yesterday at 4349.50.

Heading into today my primary expectation is for sellers to push into the overnight inventory and test below the overnight low 4330.75. Just below there at 4326.75 there is a wonderful NVPOC magnet. I will look for signs of responsive buyers here, otherwise we continue lower to test the 2/12 session low gap zone.

Hypo 2 is buyers hold above 4336 and we start working higher. Look for a move above 4349.50 and look for buyers to become initiative above 4353.

Hypo 3 is a quiet digestion of the selling with price holding yesterday’s low 4328.50 and reverting to quiet, two-way trade.

Levels are highlighted below:

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You won’t come to the Raul blog often and find my crying about wolves. I study the tape, like a psychopath stalker. Its nuances speak to me. We are waking up to a pro gap down this morning.

The overnight session managed to go second sigma range, something it has not done in quite some time. However, the volume behind the move was a bit less compelling. However there is still a half hour of globex to go.

The Greek situation is heating up in Europe where parties are growing frustrated with how much time is being wasted. Likely adding to European frustration is the quirky 3 week window where daylight savings throws them off with our time and markets. The economic calendar is otherwise quiet until tomorrow when we here about mortgage applications, oil inventories, and bank stress test results.

Yesterday we started the week quietly despite closing Friday out with a strong neutral extreme day. The up move in the Nasdaq occurred around 1pm and can be considered news driven, because it was closely associated with the Apple live event. However at the end of the session sellers began piling onto the bid.

The overnight session managed to pushed down through the micro balance we formed from 2/16 to 2/18 before finding responsive buyers. This zone has a compelling VPOC at 4382 which we are currently priced to open upon.

Heading into today, my primary expectation is for an open auction outside range due to this VPOC. Look for 4372.25 and 4389.50 to contain price early on. Look for buyers to work the range gap up to 4391.75 before finding responsive sellers (responsive relative to the open, initiative relative to Monday) who step in and leg us lower to target the NVPOC at 4360. That would be a big day

Hypo 2 is we gap and go lower to target the NVPOC at 4360 then the gap down to 4345.75 to retest prior swing high 4343.25.

Hypo 3 is a strong responsive buy full gap fill to 4414.75. It has happened a few times in recent history and requires some serious resources to do so, hence the Pro Gap nomenclature.

Levels:

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Nasdaq futures are indicating a gap up on the open after a session which mostly featured selling. In the wake of this normal range and volume session, participants left behind a somewhat weak looking low at 4396.25.

The economic calendar is quiet today so the market will be left to its natural discovery device with the exception of Greek news flow.

Looking at the bigger picture, the Nasdaq went on a strong rally which started early February around 4220. Part of the catalyst was news from Greece. Before this rally we spent several months in a 2-way grind. Here is an interesting look at the forest:

Last week we started March with a gap up and strength through Monday. The rest of the week was mixed action which ultimately gave way to selling on Friday. Buyers managed to step in ahead of the mini value area around 4380 last week. Heading into today that zone may behave like a magnet.

My primary expectation this morning is for sellers to work into the overnight inventory and press the gap closed to 4406. By doing so they assert their responsiveness and increase the likelihood we continue discovering lower prices. I will look for them to take out overnight low 4396.25 and target the discrete gap down at 4386.25.

Hypo 2 is sellers cannot close the overnight gap and strong buyers take back much of Friday’s selling starting with acceptance above 4414. Buyers will look to target the low end of the value zone above at 4436.

Hypo 3 is we fill the overnight gap down to 4406 and then revert to quiet, two-way trade.

The short term levels I will be operating from are highlighted below:

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