NASDAQ futures are set to start the week flat after an overnight session featuring normal range and volume. Price held Friday’s range with sellers defending just below the Friday high and buyers defending just above the Friday morning conviction drive. Rotations were equal, with bulls and bears taking the same sized swipes at each other.
The economic calendar is quiet to start the week and earnings season is coming to an end as we close out the month of May. At 9:45am we have Markit Manufacturing PMI data due out, and at 11:30am both a 3- and 6-month T-bill auction are scheduled.
Last week the NASDAQ set balance by taking is already slightly balanced structure and firming it up by testing both the upper and lower boundaries of value. Then Friday the bulls made a conviction drive off the open, successfully pinning price just above value to close out option expiration week. The move, however, did not attract initiative buyers, and the resulting profile resembled the letter ‘p’. This is indicative of a short squeeze.
Heading into today my primary expectation is for sellers to work down into the overnight inventory and take out overnight low 4348.25. Look for a move to continue lower, down to 4342.75 before responsive buyers step in and two way trade ensues.
Hypo 2 strong selling takes price down through overnight low 4348.25 and sustains trade below 4342.75 setting up a move to target 4323. Look for responsive buyers down at 4311.75 then two way trade to ensue.
Hypo 3 buyers work up through overnight high 4378.25. Look for responsive sellers up at 4381 then 4385.25 before two way trade ensues.
Hypo 4 strong buyers take out overnight high 4378.25 then sustain trade above 4385.25 setting up a move to test 4396.25. Stretch targets are the 4400 century mark then 4418.
Levels:
Volume profiles, gaps, and measured moves:
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nice analysis today dude.