NASDAQ future are coming into Wednesday gap up after an overnight session featuring extreme range and volume. Price worked higher overnight after briefly poking below the Tuesday cash low by a few ticks. This failed auction set the stage for prices to work higher all night, eventually probing a big beyond the Tuesday midpoint. As we approach cash open, price is hovering along the Tuesday mid.
On the economic calendar today we have ISM-non manufacturing/services composite at 10am, crude oil inventories at 10:30am and beige book at 2pm.
Super Tuesday saw Democratic contenders Bernie Sanders and Joe Biden split most of the vote.
Yesterday we printed double distribution trend down. The day began with a gap up that sellers quickly resolved with a open drive lower. Sellers struggled to reclaim Monday’s value area high, a double top print, ushering in buyers who drove price up to 9000. This all happened in the first hour of trade. We then formed a sharp excess low and went range extension down. After a checkback to the daily midpoint, price again rotated lower, eventually dipping down into the lower quadrant of Monday’s range. Buyers were active throughout the rotation but we ended near session low.
Heading into today my primary expectation is for seller to work into the overnight inventory but cannot close the overnight gap. Instead buyers step in around 8624 and work higher, trading up through overnight high 8809. Look for sellers up at 8888 and two way trade to ensue.
Hypo 2 sellers work a full gap fill down to 8581.25, setting up a move down through overnight low 8508.25. Look for buyers down at 8500 and two way trade to ensue.
Hypo 3 gap and go higher, trading up through 8888 and sustaining trade above it, setting up another run to 9000.
Levels:
Volume profiles, gaps, and measured moves:
