NASDAQ futures are priced to gap down heading into Tuesday after news the Turks shot down a Russian jet during air combat. The initial reaction to this news occurred around 3:30am eastern time. Range on the globex session is elevated as is volume. Price managed to push down into the slippery single prints left behind last Wednesday before finding buyers. At 8:30am GDP data came out in-line with expectations while Personal Consumption was a bit lower.
Also on the economic docket today we have the Case-Shiller composite-20 at 9am and more importantly Consumer Confidence at 10am.
Yesterday we printed an efficient normal variation down day. It was effiecient because it managed to close two open gaps. First it traded higher to close the 4702.50 gap from 11/6 then it formed excess high and pushed down to close the gap left behind last Thursday at 4659.75. The session ended with price trading below the mid.
Heading into today my primary expectation is for buyers to push into the overnight inventory and ‘check back’ to 4670, where the reaction to the jet fight happened. Look for responsive sellers (responsive relative to the open, initiative relative to yesterday close) ahead of the 4676 gap who push to take out overnight low 4634.25. Look for responsive buyers just below here and two way trade ensues.
Hypo 2 gap-and-go down. Take out overnight low 4634 early on and sustain trade below it to set up a liquidation down to 4607.
Hypo 3 buyers press the full gap fill up to 4676 then set their sights on overnight high 4684.50 before two way trade ensues.
Hypo 4 sellers take out overnight low 4634.25 early but stall and buyers step in to work back up to scene of crime 4670.
Levels:
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Putin is too intelligent and even tempered to be baited. Watch how our modern day Machiavelli resolves this….
Primary Hypo. Nice.