NASDAQ futures are priced for a gap down after an overnight session featuring elevated volume and range. Price breached the Wednesday high before rolling over early this morning. On the way down, price managed to hold yesterday’s range before settling into two way trade. At 8:30am we heard from the Philadelphia Fed and also Initial/Continuing Jobless claims. The initial reaction is buying.
Also on the economic calendar today we have JOLTS Job Openings and Leading Indicators at 10am, and at 1pm there is a 10-Year TIPS auction.
Yesterday we printed a double distribution trend up. The gap down to start the session was quickly bid up in an opening drive. Sellers worked in ahead of the Fed rate decision by were ultimately overrun during the reaction to the unchanged rates. Price worked higher to close the 10/21 open gap at 4399 before responsive sellers stepped in and faded the move.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4386.75. Look for sellers to defend the 4400 century mark before a long balance takes hold. Late in the session look for a move to take out overnight low 4359.75 before two way trade ensues.
Hypo 2 strong buyers close overnight gap up to 4386.75 then push up through 4400 and sustain trade above it setting up a move to take out overnight high 4412.75. Look for responsive sellers up at 4416. Stretch targets are 4424.75 then 4444.75.
Hypo 3 sellers gap and go lower, take out overnight low 4359.75 early then work down to target 4343 before two way trade ensues.
Volume profiles, gaps, and measured moves:
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