NASDAQ futures are coming into Tuesday gap up after an overnight session featuring extreme range and volume. Price was balanced overnight, chopping along inside the lower quadrant of Monday’s range until about 3:30am New York, when buyers stepped in and began to campaign for higher prices. As we approach cash open, price continues to probe higher and is currently pegged above the Monday midpoint.
On the economic calendar today we have Fed Chairman Powell talking policy in Chicago starting at 9:55am. Today is a good day to have a quality squawk service for monitoring that event. Also durable/factory goods orders at 10am.
Yesterday we printed a double distribution trend down. The week began with a gap down and drive lower which successfully closed the 3/11 open gap. It also discovered a strong responsive bid. Said bidders took us back to the daily midpoint and we chopped along it for several hours before another wave of selling came through. Despite two more significant legs lower, including one which resolved the open gap left behind on 2/11, responsive buyers were still engaging the tape. We ramped into closing bell.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the overnight gap down to 6995.25. From here buyers step in and work us higher, through overnight high 7066.25 to tag 7074.50 before two way trade ensues.
Hypo 2 we poke up to 7074.50 off the open, find strong sellers who work us lower, closing overnight gap 6995.25 and continuing lower through overnight low 6981.75 before two way trade ensues.
Hypo 3 gap-and-go higher, sustain trade above 7075 setting up a move to target 7100 then the open gap at 7135.
Volume profiles, gaps, and measured moves: