NASDAQ futures are coming into Friday down a quick -60 after an overnight session featuring extreme range and volume. Price was balanced for most of the night, chopping along Thursday’s low before breaking lower at 8:30am after the Non-farm payroll data came out in-line with expectations (May/June jobs added revised lower by a combined 40k). As we approach cash open, price is hovering below Thursday’s low.
Also on the economic calendar today we have factory orders and University of Michigan final July reading of sentiment at 10am.
Yesterday we printed a neutral extreme down. The day began with a slight gap up and drive higher. By late morning the entire post-FOMC rate decision sell-off had been erased. We inched higher before noon, pressing range extension up and closing the gap left open between Monday and Tuesday. During New York lunch, President Donald Trump tweeted that trade talks had failed and this caused a major sell-off:
…during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%…
— Donald J. Trump (@realDonaldTrump) August 1, 2019
The news-driven move saw price take out the Thursday low before we came into a choppy balance. We ended the day near session low.
Neutral extreme down with a news driven aspect.
Heading into today my primary expectation is for buyers to work into the overnight inventory and test Thursday low 7776.75. Sellers reject a move back into Thursday’s range and we take out overnight low 7724.50. Look for buyers down at 7706 and two way trade to ensue.
Hypo 2 stronger sellers drive lower off the open, sustain trade below 7700 setting up a move to target 7668.25 before two way trade ensues.
Hypo 3 buyers regain Thursday low 7776.75 and sustain trade above it setting up a full gap fill up to 7805. Buyers continue higher, taking out overnight high 7826.75. Look for sellers up at 7842.25 and two way trade to ensue.
Volume profiles, gaps, and measured moves:
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