NASDAQ futures are coming into Tuesday with a slight gap up after an overnight session featuring extreme range and volume. Price was choppy overnight, briefly trading below Friday’s low before coming into balance. as we approach cash open, price is hovering below Friday’s midpoint.
On the economic calendar today we have consumer confidence at 10am, 6-month T-bill and 2-year Note auctions at 11:30am, and 3-month T-bill and 5-year Note auctions at 1pm.
Last week featured methodical, almost programmic selling early in the week. Several major indices closed their 05/13 open gap nearly to the tick before reversing higher late in the week. NASDAQ came under the most selling pressure while the Dow demonstrated relative strength. The last week performance of each major index is shown below.
On Friday the NASDAQ printed a double distribution trend down. The day began with a gap up above Thursday’s range. An early attempt higher discovered responsive sellers inside last Monday’s range. Said sellers reclaimed the Thursday range and made short work of closing the overnight gap before price worked back up to kiss the midpoint, find initiative sellers, and we eventually closed back down at low-of-day, right near the Thursday close.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7315.50. From here we continue lower, down through overnight low 7291.25. Look for buyers just below here and two way trade to ensue.
Hypo 2 stronger sellers close the gap down at 7266.75. Look for buyers down at 7242 and two way trade to ensue.
Hypo 3 buyers work up through overnight high 7354.75 and sustain trade above it, setting up a run to tag the 7400 century mark.
Volume profiles, gaps, and measured moves: