NASDAQ futures are coming into August with a gap up after an overnight session featuring extreme range on elevated volume. Price worked higher overnight, working up beyond the Friday high Sunday evening and sustaining trade above it for the duration of Globex. AS we approach cash open price is hovering along last Thursday’s midpoint.
On the economic calendar today we have ISM manufacturing and construction spending at 10am followed by 3- and 6-month T-bill auctions at 11:30am.
Last week featured a mellow Monday with chop and upward drift. Then a hard trend down Tuesday that found late-day buyers. Then price sort of chopped around inside that big Tuesday sell candle for the rest of the week. Russell was bullish divergent during second half of week. The last week performance of each major index is shown below:
On Friday the NASDAQ printed a normal day which is anything but. The day began with a gap down below the prior two days’ ranges. Buyers drove higher off the open quickly regaining the Wednesday range but before the first hour of trade was through sellers rejected a move back into the Thursday range. This would be high-of-day. Sellers checked price back to the midpoint. Buyers defended setting up a second rotation higher. This rotation stopped one point shy of going range extension up. Price went back to the mid. Buyers defended the mid again and while we ended the session near the highs we never went range extension up (or down).
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 14,968.50. Look for buyers down at 14,900 and for two way trade to ensue.
Hypo 2 buyers gap-and-go higher, trading up through overnight high 15,056.25 early on to set up a tag of 15,100.
Hypo 3 stronger buyers tag 15,120.
Levels:
Volume profiles, gaps and measured moves:
