Quick note: After bears were trounced yesterday and with month-end/quarter-end only two days out, my bearish convictions have been called into question at a time when the likelihood of a big move is high. I have no edge statistically, and my perception is off. Today we have a gap down in range and normally I would fade this gap higher, but I will not be participating. Now back to your regularly scheduled trading plan.
-Raul Santos, September 29th 2020
NASDAQ futures are coming into Tuesday, the second-to-last day of Q3 with a slight gap down after an overnight session featuring extreme range and volume. Price was steady last night, gently pressing up beyond the Monday high until about 10pm New York. From then onward the rotation was lower. At 8:30am advance good trade balance data came out mixed, and as we approach cash open price is hovering in the upper quadrant of Monday’s range.
Also on the economic calendar today we have consumer confidence at 10am.
Yesterday we printed a neutral extreme up. The day began with a pro gap up opening up at levels unseen since September 16th. The morning was spent attempting lower. Sellers drove down into the opening bell then held the mid on three attempts at it. Each time sellers made a slightly lower low, but not much progress. Around 12:30pm, after failing three times to take out the September 16th low, buyers stepped in and reclaimed the mid then continued higher, pressing neutral. We ended the day on the highs, tagging the September 16th naked VPOC right during the closing ramp.
Heading into today my primary expectation is for buyers to press into the overnight inventory and close the gap up to 11,395.50. Buyers take out overnight high 11,448.75 clearing the way for a run up to 11,480.75 before two way trade ensues.
Hypo 2 sellers take out overnight low 11,333.75 and tag 11,311.25 before two way trade ensues.
Hypo 3 stronger sellers take out the Monday low 11,226.25 setting up a Friday gap fill down to 11,135.25.
Volume profiles, gaps and measured moves:
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