NASDAQ futures are coming into 2019 with a pro-gap down after an overnight session featuring extreme range and volume. Price worked up through the Monday high briefly before beginning a sustained, unidirectional move that descended 230 points lower. As we approach cash open price is finding balance inside last Thursday’s range, in an area we saw conviction buying last week.
The U.S. government remains shutdown. This appears to be affecting an 8-week T-bill settlement auction that was scheduled for today. The only other economic event today is PMI manufacturing index at 9:45am.
On Monday the NASDAQ printed a normal variation down. The day began with a gap up and after a brief two-way auction at the open price worked lower to close the overnight gap and go range extension down. Then responsive buyers stepped in and we chopped into the close. It was an inside day, with the entire daily range being contained in last Friday’s range.
On Tuesday U.S. markets were closed in observation of New Year’s Day.
Heading into today my primary expectation is for buyers to work into the overnight inventory and work a half gap up to 6275. Sellers step in here and two way trade ensues.
Hypo 2 sellers gap-and-go lower, taking out overnight low 6154 and trading down to 6100 before two way trade ensues.
Hypo 3 stronger buyers trade up to 6300 before two way trade ensues.
Volume profiles, gaps, and measured moves:
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