NASDAQ futures are heading into monthly option expiration day gap up after an overnight session featuring extreme range and volume. Price was balanced overnight, chopping along the Thursday low until about 2am New York when sellers made an attempt down and away. This revealed a strong responsive bid and since then price has rallied about +180 off the lows. As we approach cash open price is hovering about -50 points below the Thursday midpoint.
There are no economic events scheduled for today.
Yesterday we printed a double distribution trend down. The day began with a gap down reversal of the Wednesday afternoon Fed driven rally. Price held a tight range for the first few hours of the day while taking out the Thursday low early on. Then after many chops across the daily midpoint sellers began a campaign lower around 2:30pm and continued to sell right into the bell—action which eventually took out last Friday’s low. Of note, the daily VPOC never shifted down to the low.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 12,816.25. Look for buyers down at 12,800 and for two way trade to ensue.
Hypo 2 buyers take out overnight high 12,898.25 setting up a tag of 12,927 before two way trade ensues.
Hypo 3 stronger buyers trade up to 13,000 before two way trade ensues.
Levels:
Volume profiles, gaps and measured moves:
