NASDAQ futures are coming into Tuesday gap up after an overnight session featuring extreme range and volume. Overnight trade was halted for about six hours around 10:00pm New York after the upside circuit breaker was triggered. Upon reopening price rotated back down near overnight low, but could not take it out. Instead we have been in a big chop ever since, chopping and compressing price.
On the economic calendar today we have Industrial production at 9:15am followed by business inventories at 10am.
Yesterday we printed a neutral extreme down. The day began with a gap down and drive lower, with price initially working down to levels unseen since early last June. Then buyers stepped in and began working price higher. By mid morning we were back inside last Friday’s range. Price went range extension up, tagging last Friday’s naked VPOC and exceeding it by a few ticks (a level which coincided with the circuit breaker we hit Sunday evening when futures went limit down). That was all the upside we’d see on the day. From here responsive sellers stepped in (responsive relative to Monday’s open, initiative relative to Friday’s close) and worked price back down to the daily midpoint. We chopped along the mid for a few hours before a sharp move lower near the the close which made new low of day, trading down to levels unseen since February 11th (an old open gap). We closed near session low.
Heading into today my primary expectation is for buyers to gap-and-go higher, trading up through overnight high 7277.25 which sets up a move to tag 7300 before two way trade ensues.
Hypo 2 sellers work into the overnight inventory and close the gap down to 7042. From here we continue lower down through overnight low 6964, setting up a liquidation down to 6800.
Hypo 3 stronger buyers rally to 7600 before two way trade ensues.
Volume profiles, gaps and measured moves:
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