NASDAQ futures are coming into Friday with a slight gap up after an overnight session featuring elevated range on extreme volume. Price worked higher, taking out Thursday high around 10pm New York and sustaining trade above it until about 8:45am when chatter about a China/U.S. trade deal crossed the news feeds and caused a poke back down into Thursday range. As we approach cash open, price is hovering a few point above Thursday’s high.
On the economic calendar today we have markit composite/manufacturing/services PMI at 9:45am followed by University of Michigan’s final November reading of sentiment at 10am.
Yesterday we printed a neutral day. The day began with a gap down and open drive lower. Buyers stepped in ahead of the Wednesday low and trade was choppy before sellers made a move down through overnight low. Sellers were again unable to trigger a move down through the Wednesday lows, instead we rallied back up through the range and went neutral by a few points, stopping shy by 2.5 points of an overnight gap fill however, before settling back to the midpoint by end-of-day.
Heading into today my primary expectation is for buyers to drive up and away from the Thursday high 8289 setting up a move to take out overnight high 8313.50. Look for buyers to tag the Wednesday naked VPOC at 8325.75, then look for sellers up at 8339.50 and two way trade to ensue.
Hypo 2 sellers press into overnight inventory and reclaim Thursday range, setting up a gap fill down to 8274. Then we continue lower, down through overnight low 8265.25. Look for buyers to defend around 8250 and two way trade to ensue.
Hypo 3 sellers are stronger, taking out Wednesday low 8231, setting up a move down to 8200 before two way trade ensues. Stretch targets on a full-on liquidation: 8159.25 then 8188.
Volume profiles, gaps, and measured moves:
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