NASDAQ futures are coming into Tuesday with a slight gap up after an overnight session featuring extreme range and volume. Price shot higher overnight, driving unidirectional up from closing bell until about 8pm New York. The rest of the session was spent balancing down in the lower quadrant until about 8am when sellers made a push out of the Globex range. At 8:30am housing starts and permits came out in line with expectations (which remain high). As we approach cash open, price is hovering in the lower quadrant of Monday’s range.
There are no other important economic events scheduled today. Some low-impact Fed speak is due out in the afternoon.
Yesterday we printed a trend down. The day began with a slight gap up. A brief open-two-way auction took place right along Friday’s volume point of control before sellers stepped in and drove down into the overnight gap and took out the Friday low in the same swoop. Initially buyers stepped in ahead of the Thursday (weekly) low however, and there was a battle along the lows until about 2pm when sellers overwhelmed the bid and the auction continued lower. Of note, the daily VPOC never shifted lower from those mid-day battle levels—it remains near last week’s low. The selling continued however, trading down right to the key fibonocci level right at 11,600, that we see if we draw a retrace from the the 10/6 low to the 10/13 high. We ended the session on the lows.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 11,648.75. From here we continue lower, down through overnight low 11,633.50. Look for buyers down at 11,558.50 and for two way trade to ensue.
Hypo 2 stronger sellers press down to 11,500 before two way trade ensues.
Hypo 3 buyers work up through overnight high 11,753 setting up a move to tag the Monday VPOC at 11,800 before two way trade ensues.
Volume profiles, gaps and measured moves:
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