NASDAQ futures are coming into Tuesday up a quick +270 after an overnight session featuring extreme range and volume. Price worked higher overnight, rotating upward throughout the globex session before triggering a circuit breaker around 5:40am New York. Since then we are about -100 off the overnight high. As we approach cash open, price is trading in the upper quadrant of last Friday’s range.
On the economic calendar today we have Markit composite/manufacturing/service PMI at 9:45am, new home sales at 10am, a 52-week T-bill auction at 11:30am and a 2-year note auction at 1pm.
Yesterday we printed neutral day. The day began with a gap down after futures were limit down Sunday evening. A strong bid entered the market around 8:10am and erased the large gap before opening bell. From there sellers pressed into the opening tape, trading down near last week’s low before buyers stepped in and a two way auction formed. Around noon sellers took the market range extension down and to new swing lows before discovering a strong responsive bid. Said bidders worked to a new high of day putting us into a neutral print. From there we fell back to the midpoint and chopped along it, eventually closing above it but settled near the middle of the day’s range.
Heading into today my primary expectation is for buyers to gap-and-go higher, trading up to 7480.25 before two way trade ensues.
Hypo 2 stronger buyers sustain trade above 7495 setting up a run to 7600. Stretch target 7700 composite VPOC then 7901 open gap.
Hypo 3 sellers work into the overnight inventory and close the gap down to 7002.25. Sellers continue lower, down through overnight low 6953.50. Look for buyers down at 6900 and two way trade to ensue.
Volume profiles, gaps and measured moves:
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