NASDAQ futures are coming into the second trading day of the week with a slight gap up after an overnight session featuring extreme range and volume. Price was balanced overnight, balancing along the top half of Monday’s range. As we approach cash open, price is hovering about halfway between the Monday high and the mid.
On the economic calendar today we have new home sales at 10am, a 52-week T-bill auction at 11:30am, congressional hearings from Fed Powell and Treasury Yellen at 12pm, then a 2-year note auction at 1pm.
Yesterday we printed a double distribution trend up. The day began with a gap up and drive higher, driving up to 13,000 then briefly pausing before continue to trend back up into the reaction spike we saw last Wednesday after the FOMC announcement. Buyers couldn’t quite manage to resolve the gap that we left behind last Wednesday. Instead price slowly rotated lower during late-afternoon trade, eventually ending the day about 30 points above the mid.
Of note: Since the FOMC announcement last week no real price discovery has happened. First we spiked higher and found our top bracket, then lower through Friday to find our bottom bracket. It seems the market is waiting for more information before leaving this balance. Perhaps earnings from major NASDAQ component Adobe, due out after-the-bell could be the catalyst.
Heading into today my primary expectation is for buyers to work up above overnight high 13,105.25 and continue higher, taking out overnight high 13,157. This sets up a run to close that Wednesday gap up at 13,189 before two way trade ensues.
Hypo 2 sellers work into the overnight inventory and close the gap down to 13,078 then continue lower, tagging 13,000 before two way trade ensues.
Hypo 3 stronger buyers trade up to 13,270.25 before two way traded ensues.
Volume profiles, gaps and measured moves: