NASDAQ futures are coming into Wednesday gap down after an overnight session featuring extreme range and volume. Price worked lower overnight, erasing about half of Tuesday’s rally before coming into balance. Robert Mueller is back in Washington DC, testifying, but the markets do not appear to be affected. As we approach cash open, price is chopping along Tuesday’s midpoint.
On the economic calendar today we have Markit manufacturing/service/composite PMI data at 9:45am, new home sales at 10am, crude oil inventories at 10:30am, a 2-year note auction at 11:30am, and a 5-year note auction at 1pm.
Major tech juggernaut and new money creator Facebook is set to report earnings after the bell. This is likely to be a NASDAQ-mover.
Yesterday we printed a neutral extreme up. The day began with a gap up beyond the Monday range that sellers quickly drove down into. Sellers closed the overnight gap before discovering responsive buyers (responsive relative to Tuesday’s open, initiative relative to Monday’s close). Price chopped along, below the midpoint for most of the morning before going range extension down by a few points. This formed a sharp excessive low and ushered in strong buyers for the rest of the afternoon who eventually pushed us neutral then continued to make a new 5-day high.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7983.75. This sets up a move to tag 7998 before two way trade ensues.
Hypo 2 stronger buyers tag 8000 and sustain trade above it, setting up a fresh all-time high and open air rally.
Hypo 3 sellers press down through overnight low 7925.25 and continue lower, trading down to the 7900 century mark before two way trade ensues.
Volume profiles, gaps, and measured moves:
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