NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range and volume. Price worked higher overnight, probing beyond the high print from Monday in a slow, methodical fashion. As we approach cash open price is hovering near last Friday’s midpoint.
On the economic agenda today we have consumer confidence at 10am, a 2-year floating rate note and 4-week t-bill auction at 11:30am, and a 5-year note auction at 1pm.
Yesterday we printed a double distribution trend up. The day began with a gap down and drive lower. Ahead of last week’s lows, a strong responsive bid stepped in resulting in the formation of an excess low. The open gap from 09/19 was resolved and then converted into support. By late morning buyers were driving higher from this support to close the overnight gap from last Friday. The market again paused here before buyers became initiative (relative to last week’s close) and drove price higher into the bell.
Heading into today my primary expectation is for buyers to gap-and-go higher, up through overnight high 7603.25, trading up to 7614 before two way trade ensues.
Hypo 2 stronger buyers sustain trade above 7624 setting up a move to target the open gap at 7640 before two way trade ensues.
Hypo 3 sellers work into the overnight inventory and close the gap down to 7585.75. Sellers continue lower, down though overnight low 7573.50 before two way trade ensues.
Volume profiles, gaps, and measured moves:
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