NASDAQ futures are coming into the week gap up after an overnight session featuring elevated range and volume. Price worked higher overnight in a steady campaign of buying that took prices to levels unseen since mid-March. As we approach cash open prices are hovering up near overnight high.
On the economic calendar today we have factory and durable goods orders at 10am followed by 3- and 6-month T-bill auctions at 11:30am.
Last week a three-week-long stalemate broke higher. The holiday shortened week began weak and finished strong, steadily working higher from Wednesday-thru-Thursday before going into trend up mode Friday. The performance of each major index is shown below:
On Friday the NASDAQ printed a double distribution trend up. The day began with a gap up and drive higher out of Thursday range. The morning was violent, with big range and sellers attempting to respond to higher prices. However their efforts were overrun and we continued to trend higher into the afternoon, eventually coming into balance near session high and drifting into the weekend.
Heading into today my primary expectation is for sellers to work into the overnight inventory but fail to reclaim the Friday range. Instead, responsive buyers (responsive relative to the open, initiative relative to the Friday close) step in and defend around 7091 setting up a move to take out overnight high 7120.75 before two way trade ensues.
Hypo 2 stronger buyers gap-and-go higher, sustaining trade above overnight high 7120.75 setting up a continued trend up to 7159 before two way trade ensues.
Hypo 3 sellers work a full gap fill down to 7082.25 then continue lower, down through overnight low 7071.75. Look for buyers down at 7062.50 and two way trade to ensue.
Levels:
Volume profiles, gaps, and measured moves:
