NASDAQ futures are coming into the fourth day of the second week of Black History Month gap up after an overnight session featuring normal volume on extreme range. Price was balanced overnight until about 3am New York when buyers stepped in and drove the bid 50 points higher. At 8:30am jobless claims data came out slightly worse than expected and as we approach cash open price is hovering in the upper quadrant of Wednesday’s range.
Also on the economic calendar today we have 4- and 8-week T-bill auctions at 11:30am followed by a 30-year note auction at 1pm.
Yesterday we printed a normal variation down. The day began with an open auction inside range, right along the Tuesday high. Price spiked a bit higher during the opening swings before tightly chopping for about 45 minutes. Then sellers stepped in and drove back into the Tuesday range, effectively closing the overnight gap then continuing to drive down through the Tuesday low. There was a brief rotation higher before a secondary rotation of sellers saw price down a few point below last Friday’s low. That would mark the end of the selling campaign. From there onward the auction was upward. Sellers defended the midpoint the first time it was tested but buyers reclaimed it late in the session. We ended the day a few points above the mid.
Heading into today my primary expectation is for buyers to gap-and-go higher, trading up through the Wednesday high 13,762 to set up a tag of 13,800 before two way trade ensues.
Hypo 2 stronger buyers sustain trade above 13,807 early on, setting up a run to 13,882.50.
Hypo 3 sellers work into the overnight inventory and close the gap down to 13,667.25. From there we continue down through overnight low 13,612.50. Look for buyers down at 13,600 and for two way trade to ensue.
Volume profiles, gaps and measured moves:
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