Heading into the new month the Nasdaq is trading up a few points. The overnight auction has been on normal range and volume and shows sellers having the slight edge for most of the session. This is shown by rotation size and the weaker looking session low.

Heading into today, my primary expectation is for prices to close the overnight gap to 4448 and then test higher to the VPOC at 4457.75. Overnight high is also up there at 4458 if buyers can take out the ONH the look to continue and test swing high 4464.

Hypo 2 is sellers push down through Friday close 4448 and take out overnight low 4446.5. If buyers no show at 4440 mCVPOC then take out weak low at 4429.25 and target NVPOC 4418.

Levels:

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Nasdasq futures are about flat as we enter US trade. After printing a neutral day yesterday we spent most of the overnight session drifting higher. This drift took us just above yesterday’s MID to test the volume pocket just below 4450 before finding responsive sellers.

Those responsive sellers starting working ahead of the 8:30am data dump, which included CPI, Durable Goods, and Initial/Continuing Claims. Overall it was a balanced session with a slight upward drift on normal volume and slightly compressed, but normal range.

Also on the docket today is some Fed repo activity from 9:30-10am, at 10:30 natural gas storage stats, at 11am the Kansas City Fed MFG activity, and at 1pm Fed’s Lockhart is set to speak. We also have GDP stats out tomorrow pre-market.

Our last three day’s overlapping value are just like last week’s Monday-Wednesday. Last week it turned out to be a time-style correction before we legged higher Thursday and Friday. Coming into today, Thursday, we have essentially the same look—three days of overlap atop a rally. The nuance is yesterday’s neutral print.

Heading into today, my primary expectation is for sellers to work a gap fill down to 4437.75. That opens the door to take out ONL 4435 and test the low of our 3-day balance 4427. I will look for responsive buyers to defend and trade up through the ONH 448.75 air pocket to 4450 to target a new swing high 4461

Hypo 2 buyers cannot defend 4427 then we continue lower to target the NVPOC at 4417.75 and stretch to 4413 then 4399.50.

Hypo 3 is we stick inside the 3 day balance and continue sideways between 4450 and 4430.

Levels can be seen below:

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Nasdaq futures drifted lower, down into the mid of yesterday on abnormally low volume and range. There seems to be little interest in conducting business during globex with the looming Yellen discussions and perhaps Friday’s GDP data on the horizon.

Today, as I mentioned above, Fed Chair Yellen will be testifying for a second day. Today she meets with the Financial Services Committee at 10am. We halso have month-over-month new home sales at 10am and oil/gas inventories at 10:30am.

The trend continued yesterday, intermediate term, where buyers are in control. The last few days have been buyer controlled. Yesterday we managed to briefly take out the prior session’s low 4429.75 before finding responsive buyers who took us to new swing high prices.

Heading into today, my primary expectation is for an open auction in range to push into the overnight inventory to close the gap up to 4450.25. From there I will see if buyers can take out yesterday high 4455.75. Above there I will look for signs of responsive selling.

Hypo 2 is seller push down through yesterday’s VAL 4442 to probe yesterday’s session low. Look for responsive buyers around 4430.

Hypo 3 is drive down, take out 4430 and target 4422.

These levels are highlighted below:

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The Nasdaq futures aren’t signaling we’re in store for a busy Tuesday, what with range and volume compressed well-below normal. But perhaps they are. Perhaps the volume and range are so abnormally low because everyone waits with bated breath to hear what The Fed Chair Yellen has to say both today and tomorrow. First she will talk with the US Senate at 10am. Atop this discussion we have Markit Composite PMI at 9:45am, and both Consumer Confidence and Richmond Fed MFG at 10am.

For all intents and purposes, the market doesn’t open until 10am.

Overnights low range pushed back to the 50% mid of the afternoon ramp before finding responsive buyers. Yesterday we printed a normal variation day with a small range extension up. The most prominent feature of yesterday’s session was a late-afternoon push which traversed nearly the entire range to close us out near the high of the session.

Intermediate term the Nasdaq is trading up at swing highs after a multi-month neutral consolidation. This timeframe is bullish.

Heading into today, my primary expectation is for balanced, 2-way chop. I will look for buyers to defend yesterday’s value area low 4436.25-35.25 and then make a push to test swing high 4449.25 and in particular the mezzo century figure 4450.

Hypo 2 is sellers accelerate down through yesterday’s VAL 4436.25-35.25 and push through yesterday’s low 4429.75. In this instance I will look for responsive buyers down at 4423-22.25 area. If they do not show then sellers will target the NVPOC at 4417.75 and perhaps overshoot down to 4413 LVN.

Hypo 3 is a strong push higher up through 4450 to continue the discovery process up.

Key levels can be seen below:

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Ahoy mates, I saved you the rigmarole of running standard deviation studies on the NASDAQ 100 TICK. Using high quality IQ Feed data, I ran a study on 1-minute bars to determine 1^st-3^rd standard deviation for the indicator.

I set audio alerts for the 2^nd and 3^rd thresholds using Multicharts. We’ll see if those last or end up in the junkyard with the other algo scraps.

Here’s how the data looks on my side:

Positive TICK 1^st, 2^nd, 3^rd sigma: 36, 54, 70

Negative TICK 1^st, 2^nd, 3^rd sigma: -37, -52, -68

Why does any of this matter? Have you ever looked at something and thought, “hmm, that’s different”? Would you want to know if something you’re seeing is in fact abnormal? I do. When I am in a trade I accept that my limbic system will be active and a big part of my job is being aware of the waves of emotion that sometimes get in the way of trading. One of my boulders to channeling that creative energy into objective trading is basing my observations and decisions on cold-dead numbers, logic.

Are they Holy Grail trading signals? No, but they do offer a peek inside the engine of our good friend /NQ_F.

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The Nasdaq is starting the week flat after an abnormally docile overnight session. Both range and volume are compressed below normal which is even more radical given the longer duration of the Sunday/Monday globex session.

Last we the market started at swing highs and spent three days [one, Monday, a holiday] trading flat before making a two day upward thrust. Friday’s action resembled a trend day although not an exceedingly strong trend day.

We have Existing Home Sales at 10am and Dallas Fed at 10:30am. Traders are already looking forward to Tuesday and Wednesday when Fed Reserve Chair Yellen is set to testify before the U.S. Senate and House. They will be listening for any hint of when the Fed will raise interest rates.

Heading into today, my primary expectation is for balanced, two-way action. Sellers may push into the long inventory a bit to test down into Friday’s move. I will look for responsive buyers to defend from 4423 -4420 area.

Hypo 2 is buyers continue drifting the market higher and sustain trade above 4435.

Hypo 3 is a sharp move down through 4423-20 area to test 4413 then 4408.

See what I am seeing, below:

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Nasdaq futures are flat as we head into Friday’s trading session. The holiday shortened week featured flat trading until yesterday when an early OTF buyer came in and triggered a short squeeze. We then spent much of the afternoon drifting sideways with a slight upward skew.

The action carried into the overnight session where prices continued to drift higher until early this morning when a seller knocked them back a bit. Price held yesterday’s VAL and is working higher as we approach cash open.

Heading into today, my primary expectation is for buyers to push into this morning’ seller to close the gap up to 4414.75 and test yesterday’s high 4415.75. Here I will look for sellers to defend and then push us below the overnight low 4406.25 to work us back into Wednesday’s range 4393.50.

Hypo 2 is buyers take out yesterday’s high 4415.75 and target the overnight high 4425.25.

Hypo 3 is sellers push down through yesterday’s low 4387.25 early and down into Wednesday’s range to target 4382 mCVPOC. Extended target is NVPOC at 4360.

Markit MFG PMI at 9:45 may lend to a choppy 2-way open until after the number.

Levels below:

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The Nasdaq is up a touch, trading in the upper half of yesterday’s range. Price exceeded yesterday’s high briefly this morning on [untrue] reports of an agreement of sorts in Greece. The move went on to test the 4400 century mark before falling back into the weekly long value/balance we have formed.

At 8:30am Initial/Continuing Claims came out a touch worse than expected as was the revision to the prior number. This brought in a small bit of buying but nothing overly notable. At 10am we have Leading Indicators and the Philadelphia Fed, at 10:30am the Natural Gas Storage statistics, and at 11am Crude/Gas Inventory stats.

Wal-Mart reporting earnings this morning and they are often considered the purest data point to the overall health of the retail front in America. They are trading a touch lower premarket after beating earnings expectations and raising the dividend. The selling pressure may be attributed to their guidance where they cite the strong dollar as a potential headwind to forecasts.

As stated earlier, we are in 3 days of balance. This is occurring just after the market made new swing high and as we push through the monthly option expiration week. The action is in stark contrast to the rest of the year so far, which has featured large/fast ranges.

Heading into today’s session my primary expectation is for sellers to push into the overnight inventory and test down to 4382. Below here I will look for buyers to respond and start working toward yesterday’s high 4393.50.

Hypo 2 is sellers push down through the overnight low 4376. In this instance I will look for responsive buyers at 4372.75. They struggle to reclaim 4382 setting up a liquidation lower to target 4363.25 then the naked VPOC at 4360.00.

Hypo 3 is a variation of hypo 2 where the responsive buyers at 4372.75 hold and 2-way balance ensues a bit lower.

Hypo 4 is we drive and take out the overnight high 4400 century mark to target the measured move to 4417.50.

Levels are highlighted on the following charts:

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The Nasdaq is off to a slow start this week, and the tranquility continued into globex overnight where both range and volume compressed to below-normal levels. The overnight session is pressing its lows as we head into cash open after taking out yesterday’s high last night.

At 8:30am we have Housing Starts/Permits which came in worse than expected. We have Industrial Production stats just before the open at 9:15am and most importantly the FOMC minutes at 2pm.

After the holiday on Monday, yesterday we saw 2-way short timeframe participants performing the balance trade atop 2 weeks of rallying. Buyers managed to extend the range up slightly. Heading into today we are trading inside yesterday’s balance range.

Early on my primary expectation is for the two-way trade to continue. I will look for signs of a higher timeframe around the open, but they may not become active until the afternoon. I am looking for an open auction inside yesterday’s range to test down to 4272.25 before finding responsive buying back up to 4386.50. from there I will look for buyers to made a run at overnight high 4390.50.

Hypo 2 is sellers push through the low-end of yesterday’s range 4272 and continue working lower to target the naked VPOC at 4360 and then a stretch target of the gap to 4345.75.

Hypo 3 is buyers are aggressive early, take out overnight high 4390.50 and work toward the measured move target of 4417.50.

Note, the volume profiles and market profiles are quite similar today:

 

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Nasdaq futures are pairing back some of their overnight gains as we head into cash open. The overall structure is balanced on a normal range for Globex but on slightly abnormal (2^nd sigma) volume.

At 8:30am Empire Manufacturing came in lower than expected and introduced some selling to the market. Also on the agenda today are NAHB Housing Market Index at 10am, Fed’s Plosser speaking at 12:45pm, and Net Long Term TIC Flows at 4pm. Traders will also focus on tomorrow afternoons FOMC minutes which are just on the horizon during this option expiration week.

Taking to the charts, we see buyers probing up above prior swing highs after chopping through a multi-month range dating back to late October. Thus the long term is neutral-to-bullish—the risk of mean revision back into the range is still present.

Intermediate term we are bullish. Price and value have been migrating higher for over two weeks. Along the way we left some open gaps and naked VPOCs. Friday we printed a normal variation after sellers could not range extend lower and close the overnight gap. Instead we traded higher into the weekend.

Heading into today, my primary expectation is for sellers to push into the overnight inventory and test down through the overnight low 4364.50 to tag the NVPOC at 4360. Here I will look for responsive buyers to take us back up to Friday’s close 4377.25 then take out the overnight high 4385.75 to target the measured move up to 4391.25.

Hypo 2 is buyers defend around Friday’s close 4377.25 and continue exploring higher prices. Take out overnight high 4385.75 and measured move target 4391.25 to begin working toward 4417.50.

Hypo 3 is sellers aggressive and overshoot the NVPOC at 4360 to test the LVN at 4353 and then eventually close Thursday’s gap down to 4345.75 with a stretch target down to 4326.75.

These levels are highlighted on the following volume profile chart:

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