NASDAQ futures are coming into Wednesday gap up after an overnight session featuring extreme range and volume. Price worked higher overnight, wrestling with Tuesday’s high for several hours before breaking loose around 3am and setting out to discover higher prices. After the bell Tuesday afternoon Facebook earnings were better than expected despite missing top-line revenue expectations. The news wires had a hard time making sense of the earnings/conference call, but as we approach cash open FB shares are priced to gap up by about 7%. At 8:15am ADP employment data came out stronger than expected.
Also on the economic agenda today we have crude oil inventories at 10:30am. Also be aware that the largest NASDAQ component, Apple, is set to report earnings Thursday, after market close. As their earnings draw near, it is possible that we may enter a holding pattern as investors wait to see the information.
Yesterday we printed a normal variation up. The day began with a slight gap down. During the open we traded down to 6666 before discovering a responsive bid. The market went range extension up just before lunchtime. The rest of the session was choppy but eventually closed near high of day. It was an inside day, inside Monday’s trend down.
Heading into today my primary expectation is for buyers to gap-and-go higher, up to the composite VPOC at 6945.50. From here we continue higher, up to 6976.50 before two way trade ensues.
Hypo 2 stronger buyers drive up to 7000. Look for sellers up at 7023.25 and two way trade to ensue.
Hypo 3 sellers work into the overnight inventory and close the gap down to 6814. Look for buyers down at 6800 and two way trade to ensue.
Volume profiles, gaps, and measured moves:
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