NASDAQ futures are coming into Wednesday gap up after an overnight session featuring extreme volume on extreme range. Price worked higher overnight, gradually auctioning higher for most of the globex session but staying contained inside the Tuesday range. As we approach cash open, price is hovering above the Tuesday midpoint. At 8:15am ADP employment data came out better-than-expected.
Also on the economic calendar today we have crude oil inventories at 10:30am, FOMC rate decision at 2pm, and a Jay Powell press conference at 2:30pm.
After the bell we’ll hear earnings from Microsoft, Facebook, PayPal, and Tesla. These are all NASDAQ movers.
Yesterday we printed a normal variation down. The day began with a small gap up that sellers quickly resolved by driving lower off the open. Said sellers continued lower, trading down into last Wednesday’s range before settling into balance.
Heading into today my primary expectation is for buyers to gap-and-go higher, trading up to 6769.50 before two way trade ensues. Then look for the third reaction after the FOMC rate decision to dictate direction into the second half of day.
Hypo 2 sellers work into the overnight inventory and close the gap down to 6641.50 then continue lower, down through overnight low 6625.50. Look for buyers down at 6600 and two way trade to ensue. Then look for the third reaction after the FOMC rate decision to dictate direction into the second half of day.
Hypo 3 stronger buyers trade up to close the gap at 6789.75 then continue up to 6800 before two way trade ensues. Then look for the third reaction after the FOMC rate decision to dictate direction into the second half of day.
Levels:
Volume profiles, gaps, and measured moves:
Great call on the day.