NASDAQ futures are coming into Monday gap down after an overnight session featuring extreme range and volume. Price worked lower overnight, extending the selling seen last Friday and continuing to probe down into the 03/11 conviction buy day’s range. As we approach cash open, price is hovering below Friday’s range.
On the economic calendar today we have ISM employment/manufacturing along with construction spending at 10am followed by 3- and 6-month T-bill auctions at 11:30am.
Last week markets worked lower. The holiday shortened week kicked off Tuesday with early buying across the board. Said buyers were overrun by Tuesday afternoon. We chopped through Thursday before sellers stepped in again Friday. The NASDAQ showed slight signs of bullish divergence along the way. The last week performance of each major index is shown below:
On Friday the NASDAQ printed a neutral extreme down. The day began with a gap down and slight push lower before responsive buyers stepped in and took the market range extension up. Said buyers could not reclaim the Wednesday/Thursday balance, instead initiative sellers (initiative relative to Thursday close, responsive relative to Friday open) stepped in and eventually worked price range extension down. We ended the day on the lows.
Heading into today my primary expectation is for buyers to push off the open and trade up through overnight high 7126.75. Sellers reject a move back into Friday’s range 7129.25 (resisting up to 7140) and two way trade ensues.
Hypo 2 gap-and-go lower, trading down through overnight low 7066.75 setting up a move to close the 03/08 open gap at 7053.50 before two way trade ensues.
Hypo 3 stronger buyers regain Friday range and sustain trade above 7140 setting up a move to 7169.25 before two way trade ensues.
Volume profiles, gaps, and measured moves:
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