NASDAQ futures are coming into Monday gap down after an overnight session featuring extreme range and volume. Price was balanced for most of the globex session, chopping along the lower quadrant of Friday’s RTH range. Around 8am price began probing lower, and as we approach cash open prices are down near last Monday’s lower quad.
On the economic calendar today we have NAHB housing market index at 10am, 3- and 6-month T-bill auctions at 11:30am, and Long-term TIC flows at 4pm.
Last week began flat across the board and with a wide open auction Monday morning. Said auction was overrun by pressure from selling which drove price lower. This ultimately resulted in an excess low and we rallied off of it through Wednesday morning. Sellers came back in Wednesday afternoon and we spent the rest of the week working lower. The low from Monday held for all but the Russell, which made new lows at the end of the week. The last week performance of every major index is shown below:
On Friday the NASDAQ printed a trend down. The day began with a gap down and two-way auction. Buyers were unable to reclaim the Thursday low before initiative sellers stepped in and began driving price lower. A steady selling campaign continued throughout the rest of the day, ultimately closing on the low.
Trend down.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 6621.25. From here we continue higher, up through overnight high 6656. Look for sellers up at 6666 and two way trade to ensue.
Hypo 2 stronger buyers trade us up to 6698.25 before two way trade ensues.
Hypo 3 gap-and-go lower, trading down to close the gap at 6530.50, look for buyers down at 6543.75 and two way trade to ensue.
Levels:
Volume profiles, gaps, and measured moves:
