NASDAQ futures are coming into Monday pro gap down after an overnight session featuring extreme range and volume. Price was balanced overnight until about 1am New York. Price was marking time inside the lower half of last Friday’s range before sellers stepped in and drove lower, driving down near but not exceeding the February 2nd low. Since then price has chopped in a little 60 point range along these lows. As we approach cash open, price is hovering inside the February 4th conviction buying range.
On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.
Last week markets were closed Monday for President’s Day. The holiday shortened week kicked off Tuesday morning with a gap up to new highs. Sellers pressed into and erased the gap then continued lower through Wednesday morning. There was big chop for the rest of the week with sellers pressuring the tape into Friday’s close.
The last week performance of each major index is shown below:
On Friday the NASDAQ printed a double distribution trend down. The day began a gap up right to the Wednesday close. Sellers drove into the opening bell and made short work of filling the overnight gap. Buyers then mounted a slow rally, back up through the daily mid and nearly up through the morning high. But instead the auction stalled and then made a fast move lower. The selling sent price down below the Thursday midpoint and we spent the rest of the session chopping along the daily low and into the weekend.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 13,569 before two way trade ensues.
Hypo 2 stronger buyers tag 13,600 before two way trade ensues.
Hypo 3 gap-and-go lower, down to 13,327.25 before two way trade ensues.
Volume profiles, gaps and measured moves: