NASDAQ futures are coming into the fourth trading day of 2021 up a quick +90 after an overnight session featuring extreme range and volume. Price shot higher overnight, unidrectionally rotating from the start of Globex until about 9:30pm New York. The action was contained within the Wednesday range, and after the initial spike we spent the rest of the overnight session balancing within the spike. As we approach cash open, price is hovering about 30 point above the Wednesday mid.
On the economic calendar today we have 4- and 8-week T-bill auctions at 11:30am. Otherwise no major economic events are scheduled until tomorrow morning’s Nonfarm payroll.
Yesterday we printed an ugly normal variation up. The day began with a gap down below the Tuesday range. There was an open auction outside range which initially broke lower, but sellers were unable to take out the Monday low. Instead a strong responsive bid stepped in and drove price higher, spiking up and testing the Tuesday low before falling back to the midpoint one last time before the big rally. The rally lasted until about 11am and then we balanced along the rally highs until about 2pm. The afternoon featured selling, with sellers recapturing the midpoint by about 2:45pm and eventually working price well below it by the close. It ultimately formed a misshaped profile that sort of resembled a double distribution but given the price action, it was more akin to a normal variation.
Heading into today my primary expectation is for buyers to gap-and-go higher, taking out overnight high 12,762 early on to set up a tag of 12,800 before two way trade ensues.
Hypo 2 stronger buyers take out 12,800 early on and sustain trade above it setting up a run to 12,900.
Hypo 3 sellers work into the overnight inventory and close the gap down to 12,628.50 then continue lower down through overnight low 12,622.75. Look for buyers down at 12,559.50 and for two way trade to ensue.
Volume profiles, gaps and measured moves:
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