NASDAQ futures are coming into Wednesday with a slight gap down after an overnight session featuring extreme range and volume. Price was balanced overnight, balancing along the bottom-side of Tuesday’s midpoint until about 3am, an increasingly popular hour for volatility, when sellers drove price down through the Tuesday low. Said selling briefly probed into the Monday highs before buyers rejected the attempt. Since then there has been a slow rotation higher, and as we approach cash open price is hovering around inside the bottom quadrant of Tuesday’s range.
On the economic calendar today we have crude oil inventories at 10:30am followed by a 2-year FRN note auction at 11:30am and a 5-year note auction at 1pm.
Yesterday we printed a normal variation up. The day began with a gap up up to new all-time high. After a brief open two-way auction outside range buyers stepped in and began working up into open air. Buyers led a slow campaign higher until about 2:15pm New York when responsive sellers stepped in. Said sellers arrived right near the 1.172 Fibonacci extension of the 06/10 – 6/15 sell-off. Sellers managed to knock price off the high and reclaim the daily midpoint, holding price below it into end-of-day.
Not much of a victory for bears. Merely a methodical auction making orderly rotations to-and-from logical price levels.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 10,196. From here we continue higher, up through overnight high 10,242. Look for sellers up at 10,227.25 and two way trade to ensue.
Hypo 2 sellers press down through overnight low 10,106. Sellers fail to reclaim 10,100 and two way trade ensues.
Hypo 3 stronger sellers trade down through 10,100 and tag 10,064.25 before two way trade ensues.
Volume profiles, gaps and measured moves:
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