NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume. Price worked lower overnight, after a brief evening rally, eventually trading back down to where price was before the FOMC interest rate decision [benchmark borrowing rate left unchanged (expected) and tone/verbiage considered ‘dovish’ (accommodating/expansive) by most participants]. Overall the Globex session has been contained inside the Wednesday range. At 8:30am initial/continuing jobless claims data came out below expectations. As we approach cash open, price is hovering in the lower quadrant of Thursday’s range.
Also on the economic calendar today we have 4- and 8-week T-bill auctions at 11:30am followed by a 10-year TIPS auction at 1pm.
Yesterday we printed a neutral day. The session began flat and with a tight two-way auction . Said tight auction first went range extension up, then it went neutral (offering a great long entry point) then it coiled into the FOMC decision. After the decision we rallied to a new 2019 high, trading just a few point above the 10/09/18 high, into levels unseen since 10/05 before responsive sellers stepped in and worked price back to the daily midpoint. The day ended with price hovering well above the daily mid.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7403.75. From here we continue higher, trading up through overnight high 7440. Look for sellers up at 7466 and two way trade to ensue.
Hypo 2 sellers push down through overnight low 7367.75 setting up a move to target 7334 before two way trade ensues.
Hypo 3 local-to-local chop, close overnight gap 7403.75 and take out overnight high 7440 but then stall into a tight two-way chop.
Volume profiles, gaps, and measured moves:
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