NASDAQ futures are coming into Wednesday with a slight gap down after an overnight session featuring extreme range on elevated volume. Price was balanced overnight. First it poked higher, then lower, but ultimately trade was confined within the Tuesday range. At 8:30am CPI data came out in-line with expectations and as we approach cash open price is hovering a bit above the Tuesday midpoint.
Also on the economic calendar today we have crude oil inventories at 10:30am, a 30-year bond auction at 1pm and beige book/treasury statement at 2pm.
Yesterday we printed a normal variation down. The day began with a slight gap down that buyers quickly resolved during an open two-way auction. Buyers would soon mark the high of the session, just a few ticks beyond the Monday mid. Then for several hours we chopped sideways before seeing sellers become initiative into New York lunch. These sellers worked price down into last Thursday’s conviction buying zone before discovering a strong responsive bid. These buyers assumed control of the tap and steadily campaigned price up through the daily mid. Then they defended the mid once late in the session before ending the day a bit above it.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 12,885.75. From here buyers continue higher, up through overnight high 12,935. Look for sellers up at 12,950 and for two way trade to ensue.
Hypo 2 stronger buyers rally to 13,000 before two way trade ensues.
Hypo 3 sellers press down through overnight low 12,820 and test 12,800. If sellers overwhelm the bid at 12,800 we could sell a fast liquidation down to 12,700.
Volume profiles, gaps and measured moves:
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