NASDAQ futures are coming into Wednesday flat after a normal session of trade. By normal I mean both range and volume were within their respective first standard deviation. Price pushed down below yesterday’s range and down into last Thursday before finding buyers and rotating back up to the high. Advance Retail Sales at 8:30am came in slightly lower than expectations and introduced some sellers into the market.
Bank earnings were sort of a non-event—BAC is up a touch, WFC and JPM are down a touch. SanDisk is holding onto its gains after work of a sale came out yesterday evening.
We also have the Fed Beige book today at 2pm.
Yesterday we formed a neutral extreme down. After a borderline pro gap was snapped up by buyers we formed an excess high and then traversed the entire range to close near the low of the session and just below initial balance (hence the neutral extreme classification).
Heading into today, my primary expectation is for buyers to make a push to take out overnight high 4350.50 and target the MCVPOC at 4361. Just a touch higher at 4366 look for responsive sellers to emerge and two way trade to ensue.
Hypo 2 sellers work down through the overnight range and take out overnight low 4321. Look for a move to target 4310.50 then look for responsive buyers and two way trade to ensue.
Hypo 3 sellers move fast, take out 4310 early setting up a move for the 4300 century mark. Stretch target is the MCVPOC we established last week down at 4290.
Hypo 4 buyers sustain above 4366 setting up a test of yesterday’s high 4390.75.
Levels:
Nice call on hypo 1. But that last drop, I do believe the poleaxe is being sharpened…
Furthermore, the effect of background variables such as repo/derivatives is not calculable by any conventional analysis. I look to yen, euro, and US bond futures to indicate something is amiss there.
Looks like hypo 1 morphing right into hypo 2