NASDAQ futures are coming into the second to last week of July, the week after OPEX, gap up after an overnight session featuring extreme range and volume. Price was choppy overnight, first selling off until about 10pm New York. Sellers were unable to work price down below last Friday’s low before buyers stepped in and stabilized prices. Price was balanced until about 4:40am when buyers stepped in and reversed the Sunday evening selling. As we approach cash open, price is hovering near last Friday’s high. Like the Sunday evening sellers, this morning’s buyers have not exceeded Friday’s range.
On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.
Last week the NASDAQ started out stronger than the other major indice, but by New York lunch had topped out and printed its weekly high. After a hard sell off late Monday and into Tuesday morning, the tech-heavy index marked time and traded sideways. Meanwhile the Russell was a bit stronger, suggesting investors risk appetite is running high. The last week performance of each major index is shown below:
On Friday the NASDAQ printed a normal variation up. The day began with a gap up near the Thursday high. During an open two-way auction buyers briefly exceeded the Thursday high by a few points before sellers began a campaign lower. The selling campaign completed within the first hour of trade and ended before sellers could close the overnight gap. After a responsive buyers (responsive relative to Friday’s open, initiative relative to Thursday’s close) sharply reversed price back up through the daily midpoint, the majority of the session was spent flagging sideways along the midpoint with buyers steadily defending the mid. Around 2:15pm price spiked higher and went range extension up. Then we flagged into the close, eventually selling off a wee bit.
Heading into today my primary expectation is for buyers to gap and go higher, tagging 10,702.75 before two way trade ensues.
Hypo 2 stronger buyers work up to 10,729.50 before two way trade ensues.
Hypo 3 sellers press down into the overnight inventory and close the gap down to 10,603.75. Look for buyers down at 10,600 and two way trade to ensue.
Levels:
Volume profiles, gaps and measured moves:
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