NASDAQ futures are coming into Wednesday up a quick 40 points after an overnight session featuring extreme range and volume. Price worked lower overnight, trading down to prices unseen since October 30th. Around 4:30AM a responsive bid stepped in and since then we have trade uni-directionally higher, up more than 100 points off the low. As we approach cash open price is hovering along the Tuesday midpoint.At 8:30am consumer price index data came out mixed.
The only other important economic event scheduled for today comes after the bell. At 6pm Fed Chairman Jerome Powell will be talking economy down in Dallas.
Yesterday we printed a neutral day. A neutral day after a normal day, with a long-liquidation lowercase-b profile. All formations typically seen at-or-near swing low. Tuesday began with a gap up and very choppy opening auction. Said chop managed to take out overnight high early on before thrusting lower to resolve the overnight gap. At this point sellers were unable to press the market range extension down. Instead we drove higher, going RE up and tagging the composite volume point of control 6950. Strong responsive sellers stepped in here and defended their Monday morning selling conviction. This pushed us back down through the entire daily range, putting us into a neutral print. Bids came in late on the session and pushed price just up beyond the day’s lower range quadrant.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6851.50. Buyers reject a move down through Tuesday low 6818.25 setting up a move to take out overnight high 6899, setting up a move to target the composite VPOC at 6950 before two way trade ensues.
Hypo 2 buyers gap-and-go higher, trading up to 6950 early. There’s a battle here that ultimately gives way to buyers who drive price up to 7000. Look for sellers up at 7023.50 and two way trade to ensue.
Hypo 3 stronger sellers close overnight gap 6851.50 then continue lower, down through overnight low 6777 setting up a move to target 6717.25 before two way trade ensues.
Volume profiles, gaps, and measured moves:
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