NASDAQ futures are coming into Tuesday gap down after an overnight session featuring extreme range and volume. Price chopped sideways overnight, along the bottom-side of the Monday midpoint. As we approach cash open sellers are pressing us lower, into the bottom quadrant of the Monday range.
On the economic calendar today we have consumer confidence at 10am followed by 4- and 8-week T-bill auctions at 11:30am.
Yesterday we printed a trend down. The day began gap up and the morning auction showed early signs of holding the gap before buyers were unable to test above the Friday high before sellers stepped in and closed the gap. Selling then continued lower, pausing during the lunch hour just above the Friday low before driving lower in the afternoon. There was a brief attempt by buyers to defend 6666 before we continue lower, trading down to about 6600 before a strong rally near the end of the day took us more than 100 points higher, to close above 6700.
Heading into today my primary expectation is for sellers to work down to 6666 before two way trade ensues.
Hypo 2 stronger sellers trade down through Monday low 6580.50 and continue lower to target the open gap at 6554.75 before two way trade ensues.
Hypo 3 buyers work into the overnight inventory and close the gap up to 6733.25 before two way trade ensues.
Volume profiles, gaps, and measured moves:
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