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Tag Archives: $QQQ

Starting The Week Pro Gap Down

Nasdaq futures are down as we head into the holiday shortened week after news from Greece began to deteriorate over the weekend. Futures opened and immediately pushed gap down to 4400 before a well-balanced, 2-way trade ensued. Volume is abnormal but not breaching the extreme 2nd sigma threshold. The range on trade post-gap down is elevated, but including the range of the gap we have extreme 2nd sigma range.

I envision this Greek news slowly fizzling out this week, but as for today, it’s likely to be of elevated importance. With headline risk high, we may see less impact to today’s only economic event—Pending Home Sales at 10am. Keep in mind, we have NFP data out on Thursday instead of Friday due to Independence Day (USA#1).

Last week we started with a big gap up and essentially spent the rest of the week fading it lower. On Friday liquidation accelerated through an air pocket present on the profile before finding responsive buyers to end the week.

Heading into today, my primary expectation is for buyers to push into the overnight inventory and test higher. Look for sellers to defend 4446 and two way trade to ensue, north of the overnight low 4400.

Hypo 2 buyers push up through 4446.75 and continue higher to 4467. If they can breach this levels as well, look for a throwback to the scene of the crime, the open gap up at 4481.75. Note, this is pro gap territory—thus attempting to fade it is an effort requiring “professional” resources. The half gap scenario above is more likely.

Hypo 3 we take out overnight low 4400 and test below prior swing low 4386.50. Look for responsive buyers otherwise liquidation grip the market and sellers push to target 4353.50.


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Super Balance

Markets pushed higher early this morning, and as we head into cash open price is entrenched in balance. Range is abnormally elevated on the overnight session and volume is close to abnormal too. The main feature of the overnight session is a 25 point rotation higher that hit right around 4am.

The Greek drama continues and at 7am Eurogroup Finance Ministers were set to meet.  At 8:30am Initial/Continuing jobless claims data, as well as Personal Income/Spending data were out and the initial reaction to the news is some slight selling. Also on the docket today is Market Composit PMI at 9:45am and Nat Gas Storage data at 10:30am.

Yesterday we printed a neutral extreme day, and quite an interesting one. Price went up and took out the prior swing high and order flow dried up. We spent the rest of the session working lower and went out near the session low.

This action followed what has been a frustrating week for bears. We started Monday with a big gap up and sellers have struggled to fade it. Instead we are churning and accepting these higher prices.

The result is a well-defined value area that we can work with. It spans from 4545 – 4511. The more time we spend inside this balance, the more likely it is to resolve higher and in congruence with the higher time frame trend.

Heading into today, my primary expectation is for buyer to push on the open to target 4541. From there I will look for sellers to defend the high end of value and two-way trade to ensue.

Hypo 2 is sellers push into the overnight inventory and close the gap down to 4514.50, setting up a test of VAL 4511. Look for buyers and two-way trade to ensue.

Hypo 3 sellers close overnight gap early, selling pressure persists, and we push to test the century mark 4500. Look for a liquidation if we pierce the air pocket below 4498.50.

Hypo 4 strong buyers, push up through 4545 and continue on to test above yesterday HOD 4555.25 to target measured moves at 4557 and 4565.75.



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Three Possible Outcomes for Today’s Trade

Nasdaq futures are a touch lower as we round the bend into cash open. The session featured normal range and volume while trading inside of yesterday’s range. This suggests we are in balance and nothing overnight changed that. The overnight profile features a weak low and the predominant feature of the session was a 16 point rotation lower around 5:30am, otherwise the session yields little clues on the day.

At 8:30am a buffet of economic numbers was delivered—most coming in-line or slightly better than expectations. At 10:30am we have crude oil inventories and at 2pm it appears a Greek Summit meeting is taking place over in the Eurozone.

Yesterday we printed a normal variation down but saw little initiative selling after going range extension down. Instead we grinded back up into the balance formed by Monday’s neutral day. Starting the week with a big gap up, after starting the prior week with a big gap down, may make participants hesitant to chase price higher. However, the longer we can hold balance up here, building acceptance of these prices, the more likely it becomes that we test contract high and explore for buy stops.

Heading into today, my primary expectation is for buyers to push into the overnight inventory and close the gap up to 4541.25. From there I will look for them to take out overnight high 4545.75 setting up a move to target 4557 then 4565.75. Stretch targets are 4579.50 and 4596.

Hypo 2 buyers struggle while closing the overnight gap and we push down to take out overnight low 4526. Look for price to continue lower and look for buyers around 4511.75 then continued balanced trade.

Hypo 3 sellers push down through 4511.75 to target the 4500 century mark. If they can push trade below 4498.50 look for liquidation to take hold, and a fast move down to 4465.25 with a potential gap fill target down at 4454.



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Overnight Action Quite Calm

Nasdaq futures are priced to gap up slightly heading into Tuesday. The overnight session was a balanced-two way chop along yesterday’s midpoint. The range printed is normal on abnormally low volume.

At 8:30am Durable Goods data came in weaker than expected, and at 9am House Price Index did too. The initial reaction to both news items is selling. Also on the docket, we have a morning loaded with low impact events including Markit Manufacturing PMI at 9:45am, New Home Sales at 10am, and Richmond Fed at 10am as well.

Yesterday we started the week with a big gap up after news out of the Euro zone sent world equity markets higher. The Nasdaq managed to close the open gap it left behind from May 28th during the opening trade. Buyers briefly became initiative, pushing us range extension up, before responsive sellers stepped in and pushed us neutral.

Heading into today, my primary expectation is for a choppy open. The flurry of news items and balanced overnight session suggest we chop between 4545.75 – 4531.75 before heading higher to test above yesterday’s HOD 4552.25 to target a measured move up to 4557, then 4565.75.

Hypo 2 sellers break the balance to target the MCHVN at 4512.75. Look for responsive buyers at 4509.75 otherwise the open gap down at 4499 becomes a likely magnet.



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First We Cover A Few Scenarios

Nasdaq futures are lower as we head into option/contract expiration week. The session opened gap down, a somewhat uncommon occurrence, and then spent the rest of the session trading in a normal 20 point range on somewhat normal volume. Volume analysis is a bit buggy right now as some volume is still trading on the June contract while most has rolled onward to the September contract.

The economic calendar has a few events today—at 9:15am Industrial/Manufacturing Production, at 10am the NAHB Housing Market Index, and at 4pm the Net Long-term/Total TIC Flows. However, attention will quickly shift to Wednesday afternoons Fed Rate Decision which is likely to be a high impact event regardless of the decision/verbiage. We are also still dealing with headline risk out of the Eurozone.

Last week we came into Monday gap down and proceeded to sell off for most of day and into Tuesday morning. By Tuesday afternoon, prices were off the lows and Wednesday featured a trend day up. After a brief continuation higher Thursday, equities rolled over and grinded lower into Friday’s closing bell.

Heading into today, my primary expectation is for sellers to push lower and work below 4405 to test the 4400 century mark. Look for sellers to target the NVPOC at 4405.50 then some churn at 4398 before continuing lower to test below last Tuesday’s low 4390.25.

Hypo 2, buyers push into the overnight inventory, take out overnight high 4437.25 to set up a gap fill trade to 4448.25. Look for responsive sellers to defend Friday’s range.

Hypo 3 churn, 2-way trade south of the overnight gap (4448.25) followed by liquidation in the afternoon.

Hypo 4 early push lower to NVPOC 4405.50 and sharp responsive buy up to close the gap at 4448.25 and continue higher.



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Hey, A Normal Overnight Session

My expectation heading into the week was for volatility to be low in the beginning of the week. And while most other indices saw volatility decrease, the Nasdaq has been ripping around, especially overnight.

However volatility receded during this morning’s globex session, and we’re heading into cash open with a normal range and volume overnight session in tote.

This is a slow week for economic events, but the pace will pick up a bit on the tail end of the week. At 7am we had MBA Mortgage Applications, at 10:30am Crude/Gas Inventories, and at 2pm we have a Monthly Budget Statement. Tomorrow morning BMO we have Advanced Retail Sales.

Yesterday we printed a neutral day, and nearly a neutral extreme day. The variation that qualifies a neutral day as extreme, at least in my unwritten book, is closing in the upper quadrant of the day’s range. Neutral days feature a range extension on both sides of the initial balance and tend to occur at-or-near inflection points. The session also printed a healthy-looking excess low that may stick for the remainder of the week.

Heading into today, my primary expectation is for seller to push into the overnight inventory and close the gap to 4431. From here, it’s not a big distance to take out the overnight low 4430.50. Look for responsive buyers at 4411.50-4407.50 and two way trade to ensue, south of ONH 4451.75.

Hypo 2 buyers gap-and-go higher, instantly leaving unfinished business in their wake, to take out overnight high 4451.75 and continue exploring higher to target 4480.

Hypo 3 sellers push down through 4407.75 setting up a test of yesterday’s low. Look for responsive buyers from 4387.25 – 4379.



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Easing into Monday With A Chill Vibe

Nasdaq futures are heading into the week balanced and compressed. The overnight session has so far been a narrow (but normal) range on normal volume. The economic calendar is light this week and today in particular only has one low impact release—at 10 am the Labor Market Conditions Change.

Aside from headline risk, that essentially leaves the market to its own device.

Last week we came in ambitious, gap up, and quickly eroded the gap to kick off 3 days of chop. Toward the end of the week sellers worked us lower until we found a sharp responsive bid Friday morning. We closed out the week grinding sideways.

Interesting to note, last week Monday we printed a normal day—we haven’t seen this print in quite some time. It suggests strong OTF presence early in the session, but no conviction follow through afterwards. The footprint it left behind suggests higher time frame selling that was absorbed well for much of last week.

Heading into today, my primary expectation is for buyers to work the market higher. Look for an early move to take out overnight high 4483.25 followed by a gap fill trade up to 4497.50 with 4508.25 as an upside target.

Hypo 2 buyers push up to 4497.50 then stall out and two way trade ensues with a range of about 4500 to 4473.

Hypo 3 sellers work lower, take out overnight low 4468.75 and test below Friday’s low 4449.25.


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Back on The Bottom of The Range

Nasdaq futures are trading lower as we head into Friday’s trade. The session was active even before the Non-farm Payroll data but obviously the pace has increased since the data. Range and volume have extended beyond first sigma and it will be interesting to see if the volumes carry into the day session of if we instead see action fizzle out as the day progresses.

Also on the calendar today we have the Baker Hughes rig count at 1pm and Consumer Credit at 3pm.

Yesterday we printed a normal variation down to press the low end of our range. Down there we found buyers who emerged late in the session despite being bludgeoned most of the day with selling pressure. If affirms the idea of intermediate term balance.

Heading into today, I will patiently observe the first hour, allowing the post-NFP dust to settle. However, my primary expectation is for buyers to push into the overnight inventory to close the gap up to 4497.50 and continue to target the overnight high 4506.50.

Hypo 2 is a seller push down to test below yesterday’s low 4473.25. Look for buyers at 4460.50 then again at 4450.50.

Hypo 3 we chop inside of 4473 – 4500 range.



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Huge Overnight Session

Europe took to the main stage overnight both with their economic reports and news bits revolving around the Greeks. We’re heading into US cash open on the tails of a historic overnight session featuring range well beyond second sigma and volume nearly as elevated. On the Nasdaq, 60,000 contracts is the 2nd sigma threshold, we are nearly exceeding it with just under an hour until the open.

The standout feature of the session is a huge, 41.25 point rotation lower right around the time German Employment data was released, followed by a 40.50 point counter rotation higher to effectively undo the selling. Since then we have churned between the peak and valley. The selling managed to take back nearly the entire range of Wednesday’s trend day before finding the responsive bid. It’s interesting to note that buyers came in right around the 5am Euro-Zone CPI data—a very news/headline driven market.

Fortunately we only have one item on the US agenda today, Factory Orders at 10am.

Yesterday we printed a normal day-type, a structure that’s anything but normal, with a 5.66% occurrence rate since January 2013. It featured a big push lower early on, but no range extension. Instead neither sellers nor buyers became initiative. Instead we worked the rest of the day within the range.

It speaks to the developing balance we’ve been discussing since two weekends back. We are in a 2-timeframe market meaning both locals and longer term participants are active In these conditions, intraday levels can become less reliable and it’s prudent to give more weight to the higher timeframe levels presented by the developing volume profile. With that in mind, you will notice I am only presenting the volume profile below to emphasize these price levels.

Heading into today, my primary expectation is for buyers to work into the overnight inventory to close the gap up to 4521.75. Look for buyers to continue up to target the overnight high 4529.75 with a stretch target of 4543.25.

Hypo 2 is a quick push up above overnight night 4529.75 and beyond to close the gap up to 4543.25 where we find responsive sellers who push us back into 4530.

Hypo 3 sellers push early to test yesterday’s low 4486 but cannot take out overnight low 4480.75 and responsive buyers push us back up for a gap fill to 4521.75.

Hypo 4 sellers push down to 4460.50, look for responsive buyers here otherwise a test down to 4450.



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Rumors of Rumors

Nasdaq futures are coming into the new week (and new month) gap up. The globex session featured an abnormal range on high-end normal volume. The defining feature of the session was a large rotation up, nearly 30 points, that occurred from about 7am to 7:45am. The move is being attributed to rumors of a Greek accord coming out.

We had Personal Consumption data out at 8:30am which came in softer than expected. It introduced a bit of selling into the market. We also have Markit Manufacturing PMI at 9:45am, and Construction Spending/ISM Manufacturing at 10am.

Last week was a holiday shortened week. We came into Tuesday gap down and trended lower most of the session before finding buyers in the former resistance zone from back on 5/8-5/13. They worked price nearly 30 points off the lows Tuesday which led to Wednesday when buyers became initiative and trended price higher all day. Thursday and Friday we chopped about in Wednesday’s upper half range.

Heading into today, my primary expectation is for sellers to work into the overnight inventory. The push to green was rumor driven and may stick, but I will look for sellers to attempt a gap fill down to 4516.75. From there I will look for buyers to come in and work higher to target the open gap at 4543.25 then a test of Wednesday’s high 4547.50.

Hypo 2 buyers gap-and-go higher, take out the gap up at 4543.25 before stalling out and rolling over to chop around 4520.50 for the rest of the session.

Hypo 3 gap-and-go higher, take out and sustain trade above 4543.25 to set up a leg higher to new swing high. Measured move targets are 4557, 4560.75, and 4565.75.

Hypo 4 sellers fade the overnight move, take out overnight low 4506.50 and undo Wednesday’s trend day by testing below it 4497.25.



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