NASDAQ futures are coming into the week gap down after an overnight session featuring elevated range and volume. Price drifted lower overnight then found balance inside of Friday’s range. As we approach cash open, price is hovering in Friday’s lower quadrant.
This is a busy week for Fed speak, with several key members scheduled to speak along with Fed Chairman Powell set to testify at the House and Senate Wednesday and Thursday, respectively. Today we have 3- and 6-month T-bill auctions at 11:30am followed by consumer credit at 3pm.
Last week kicked off with a big gap up that was sold into for most of Monday, but sellers were unable to erase the gap before bidders took action. Tuesday was mostly flat but there was clear strength under the surface. This ultimately lead to a late-Tuesday spike that that followed through clean into the 4th of July. Then Friday we opened gap down and buyers spent most of the day working it higher. The last week performance of each major index is shown below:
On Friday the NASDAQ printed a neutral extreme up. The day began with a gap down below Wednesday’s range (markets were closed Thursday for 4th of July). After a brief two-way auction sellers stepped in and worked price lower, briefly pressing the market range extension down before discovering a strong responsive bid. Buyers then pressed neutral and drove price higher but were unable to fill the overnight gap. There was some selling late into the settlement period.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7851. From here we continue higher, up through overnight high 7863.50. Look for a fill of the Wednesday open gap 7889.25 before two way trade ensues.
Hypo 2 stronger buyers tag the 7900 century mark before two way trade ensues.
Hypo 3 sellers press down through overnight low 7808.25. There is a battle at the 7800 century mark which eventually gives way to lower prices. Look for buyers down at 7772.25 and two way trade to ensue.
Volume profiles, gaps, and measured moves:
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