NASDAQ futures are coming into Wednesday flat (v.slight gap up) after an overnight session featuring normal range on elevated volume. Price was balanced overnight, chopping along inside the Tuesday range. At 7am MBA mortgage applications came in below expectations. As we approach cash open, price is hovering just below the Tuesday midpoint.
At 2pm today we have an FOMC rate decision. According the CME Fed Fund futures, there is a 98.7% probability of no change [UNCH] their benchmark borrowing rate. We also have crude oil inventories at 10:30am.
Yesterday we printed a neutral day. The day began with a gap up and tight two-way auction. Sellers briefly pushed us range extension down in the late morning, but there was no interest in going lower. Instead buyers rejected a move back into the Monday high and drove us to a neutral print, stalling just a few ticks ahead of the weekly ATR band. Sellers then stepped in and reversed the entire daily range and eventually closed the overnight gap. Buyers stepped in during the final 15-minutes and worked price back up, but not beyond the daily mid.
Neutral day, and a choppy one.
Heading into today my primary expectation is for buyers to work up through overnight high 7392.25 before we balance out and mark time. Then look for the third reaction after the 2pm FOMC rate decision to drive direction into the second half of the day.
Hypo 2 sellers press down through overnight low 7353 setting up a move to target 7334. Then look for the third reaction after the 2pm FOMC rate decision to drive direction into the second half of the day.
Hypo 3 stronger buyers trade us up to 7426.50 before we balance out and mark time. Then look for the third reaction after the 2pm FOMC rate decision to drive direction into the second half of the day.
Levels:
Volume profiles, gaps, and measured moves:
