NASDAQ futures are coming into Tuesday gap down after an overnight session featuring normal range and volume. Price held Monday’s range overnight, first working higher. The Globex rally ended ahead of Monday’s high when a strong sell pushed through the marketplace around midnight eastern time. The selling ended at the same prices as we saw yesterday afternoon–which line up with last Friday’s high.
On the economic docket today we have Personal Income/Spending at 8:30am and a 4-week T-bill auction at 11:30am.
Yesterday we printed a normal variation up. We opened flat and after a brief test lower participants drove price higher all morning and achieved new all-time highs. An aggressive responsive sell occurred during the lunch hour but sellers never became initiative. Instead we balanced out into Monday’s close.
Heading into today my primary expectation is for buyers to push into the soft-handed, sell-bot inventory and close the gap up to 4745. The buying drys up around 4570 and the market rolls over and takes out overnight low 4732 setting up a move to target 4727 before two way trade ensues.
Hypo 2 sellers are more aggressive early on and manage to keep the overnight gap open. They take out overnight low 4732 then sustain trade below 4726 setting up a move to target 4719.25 before two way trade ensues.
Hypo 3 buyers close gap up to 4745 then sustain trade above 4750 setting up a move to take out overnight high 4759.50 then continue probing all-time highs. Look for sellers around the measured move target of 4765.25.
Levels:
Volume profiles, gaps, and measured moves:
It’s only a matter of time that Wall Street starts allowing pajamas into the dress code to make the environment more “friendly”.
When this happends, look for it to be the topping signal.