NASDAQ futures are heading into the second trading day of the year gap down after an overnight session featuring extreme range and volume. Price was balanced overnight, balancing below the Monday midpoint for several hours before drifting a bit lower around 8:30am New York. As we approach cash open, price is hovering in the lower quadrant of Monday’s range.
On the economic calendar today we have ISM manufacturing at 10am.
Yesterday we printed a double distribution trend down. The day began with a gap up up to new all-time highs. Heavy selling pressure was seen right at opening bell, with sellers resolving the +60 overnight gap in under 10 minutes. There was a brief balance here before sellers resumed their campaign. Selling accelerated down through the open gap left behind on Christmas eve before eventually finding a strong responsive bid in the December 21st (winter solstice) range. We then spent the afternoon in a steady rotation higher, eventually ending the day still a bit below the daily mid.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 12,677.25. From here we continue higher, up through overnight high 12,727.50 before two way trade ensues.
Hypo 2 sellers gap-and-go lower, down through 12,600 early on setting up a run down through the Monday low 12,522.50. Look for buyers down at 12,500 and for two way trade to ensue.
Hypo 3 continued liquidation. Stretch targets are 12,450 and then 12,400 and then 12,374.
Volume profiles, gaps, and measured moves:
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