I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
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NASDAQ balances out overnight after oil shock, here’s the Monday trading plan

NASDAQ futures are coming into Monday, the first full trading week with active traders mostly on the December contract, gap down after an overnight session featuring extreme range and volume.  The Globex session began with a gap down and drive lower after news of a drone strike late Saturday night on key Saudi Arabia oil facilities.  Price traded down into last Tuesday’s range before discovering a strong responsive bid.  Buyers were unable to erase the entire overnight move, but as we approach cash open, price is balancing along inside of last Wednesday’s range.

On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.

Last week saw weakness across most of the equity complex during Monday/Tuesday trade, with a very apparent bullish divergence happening in the Russell futures.  That told the story as strength entered the market Wednesday and Thursday before we faded a bit into the weekend.  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 slight gap down that was resolved during the morning two-way auction.  Price went range extension up briefly, probing into the Thursday range before being rejected away by sellers.  Then most of the session was spent chopping along the daily low, marking time, eventually closing near session low.

Neutral extreme down.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7910.  Look for sellers here and two way trade to ensue.

Hypo 2 sellers work down through overnight low 7798.25.  Look for buyers down at 7796.50 and two way trade to ensue.

Hypo 3 stronger buyers sustain trade above 7910 setting up a move to target 7936 before two way trade ensues.


Volume profiles, gaps, and measured moves:

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