NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume. Price worked lower overnight after briefly poking beyond the Wednesday trend high early in the globex session. As we approach cash open price is hovering at the low-end of the upper quadrant of Wednesday’s trend up. At 8:30am initial/continuing jobless claims data came out better-than-expected.
Also on the economic docket today we have an uncommon Thursday FOMC rate decision at 2pm. The gambling halls in Chicago are currently predicting a 92.8% probability of no change to the Fed’s current benchmark borrowing rate of 2.25%.
Yesterday we printed a trend up. The day began with a gap up above last week’s hig, so we were out of balance. After an initial two-way auction was unable to reclaim last week’s range buyers stepped in and became initiative, driving price higher. Price paused briefly after closing the 10/22 open gap. Then late in the session a fresh leg higher took shape, trending up into the close and ending at session high.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7218.50. From here we continue higher, up through overnight high 7231. Look for sellers up at 7263.50 and two way trade to ensue. Then look for third reaction after the FOMC minutes to drive direction into the close.
Hypo 2 sellers gap and go lower, trading down through overnight low 7162 which sets up a move to target 7109.75 before two way trade ensues. Then look for third reaction after the FOMC minutes to drive direction into the close.
Hypo 3 stronger buyers trade up to 7300 before two way trade ensues. Then look for third reaction after the FOMC minutes to drive direction into the close.
Volume profiles, gaps, and measured moves:
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