NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume. Price worked lower overnight, trading down into prices unseen since last Wednesday. As we approach cash open prices are hovering below the weekly low. At 8:30am initial/continuing jobless claims came out better than expected.
(good news, neutral reaction, bearish)
Also on the economic calendar today we have factory/durable goods orders at 10am.
Yesterday we printed a normal variation down. The day began with a gap up inside range. Buyers made a small push off the open but were unable to test beyond the Tuesday high. They also stalled out before the market could go range extension up. Then responsive sellers stepped in. The pushed RE down then we came into balance. Then later in the session they closed the overnight gap and we ended the day near session low.
Heading into today my primary expectation is for sellers to gap-and-go lower, trading down through overnight low 7602.25 setting up a move to close the gap down at 7590.50 before two way trade ensues.
Hypo 2 stronger sellers trade us down to 7573.25 before two way trade ensues. Stretch target is 7573.25.
Hypo 3 buyers work into the overnight inventory to close the overnight gap up to 7665.50 then continue higher, up through overnight high 7667.50 before two way trade ensues.
Volume profiles, gaps, and measured moves:
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