NASDAQ futures are coming into the first day of November and the day before the presidential election gap up after an overnight session featuring extreme range and volume. price was choppy overnight, chopping around the unchanged level until about 4am New York. Buyers pushed price higher around then, driving up into the upper quadrant of last Friday’s range before encountering meaningful responsive selling. Sellers defended the 11,200 level, and as we approach cash open price is hovering a bit above the Friday midpoint.

On the economic calendar today we have ISM manufacturing at 10am.

Last week was choppy through Tuesday then we saw a big move lower Wednesday. Thursday was buyers attempting to reject the big sell but then Friday prices continued to slide lower. The last week performance of each major index is shown below:

On Friday the NASDAQ printed a double distribution trend down. The day began with a gap down near the Thursday low. A brief two-way auction saw buyers fail to press out of the lower quadrant of Thursday’s range. Instead sellers stepped in and drove down through the weekly low. The selling continued, unidirectional rotating down into the lower quadrant of the range from 09/25, a conviction buying day. Around 11:30am responsive buyers stepped in and worked a sharp rotation higher but were again overwhelmed by sellers. Sellers had price back on the lows by 3pm and we chopped along the lows until the end of the day when a ramp higher took price about a quarter of the way off the lows.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 11,072.25. Look for buyers down at 11,054.25 and for two way trade to ensue.

Hypo 2 stronger sellers tag 11,000 then continue lower, taking out overnight low 10,981.75. Look for buyers down at 10,967.25 and for two way trade ensue.

Hypo 3 buyers press a gap-and-go, trading up through overnight high 11,211.50 early on and continuing up to 11,267.50 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into the final day of October down -90 after an overnight session featuring extreme range and volume. Price dove lower during the settlement period Thursday afternoon, then continued steadily rotating lower through the night as investors reacted to several major earnings reports from Big Tech. The selling worked price down to a new weekly low, trading down to levels unseen since September 25th. Since then price has worked +200 off the lows. At 8:30am personal income and outlays data came out mixed, to slightly better than expected and as we approach cash open price is hovering in the lower quadrant of Thursday’s range.

The only other economic event today is consumer sentiment at 10am.

Yesterday we printed a double distribution trend up. The day began with a slight gap up and after a brief two-way auction buyers stepped in and drove price higher, rallying up into Wednesday’s midpoint before meeting any meaningful resistance. A battle ensued along Wednesday’s mid until about 1:15pm New York when buyers broke the intra-day range and drove up into the thin prices above 11,350. It was all buyers in control for the rest of the day, eventually taking out the Wednesday high by a few points before sellers re-engaged. Price was sort of fading off the highs into the close then, as noted earlier, price dove lower during settlement. We ended the session right on the mid.

Heading into today my primary expectation is for a choppy open. Look for sellers to move price down through the Thursday low 11,170.50. Look for buyers just below at the Wednesday gap 11,163.50 and for two-way trade to ensue.

Hypo 2 buyers press off the open, closing the overnight gap up to 11,322 then continue higher up through overnight high 11,339 before two way trade ensues.

Hypo 3 stronger buyers sustain trade above 11,300 setting up a run to 11,400.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into Wednesday gap down after an overnight session featuring extreme range and volume. Price drove lower overnight, trading in a near unidirectional manner for the entire Globex session, starting shortly after closing bell Tuesday when Microsoft reported earnings. The selling accelerated overnight however. European markets were weak. The German DAX is currently pricing its 7th biggest down day of the year. At 8:30am U.S. goods trades deficit came out better than expected but did little to stem the wave of selling hitting early markets. As we approach cash open price is hovering above Monday’s low.

Also on the economic calendar today we have crude oil inventories at 10:30am, a 2-year note auction at 11:30am and a 5-year note auction at 1pm.

Yesterday we printed a normal variation up. The day began with a gap up that was quickly resolved during the open two-way auction. A second attempt lower was thwarted right before 10:30am, a few ticks below the Monday closing print. Low of day was in from there. Price was range extension up by mid-morning and after several hours of chop above the daily midpoint buyers ramped into the bell.

Normal variation up. Inside day.

Heading into today my primary expectation is for sellers to gap and go lower, trading down through overnight low 11,390.75 on their way to tagging 11,302 before two way trade ensues.

Hypo 2 half gap fill. Buyers work up to Tuesday low but cannot reclaim the 11,486 level. Choppy action along the lows.

Hypo 3 buyers work a full gap fill up to 11,593 then take out overnight high 11,604 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into Tuesday gap up about +50 after an overnight session featuring elevated range and volume. Price drifted higher overnight, drifting up beyond the Monday midpoint. At 8:30am durable goods orders came out inline with expectations, and as we approach cash open price is hovering above the Monday mid.

Also on the economic calendar today we have consumer confidence at 10am followed by a 2-year note auction at 1pm.

Yesterday we printed a double distribution trend down. The day began with a gap down in range, a sizeable one (about -100). Buyers quickly resolved the gap with an open drive up, taking out overnight high, closing the gap and briefly exceeding last Friday’s high before stalling out a few points below 11,700. After a responsive sell reversed the auction sellers quickly became initiative, reversing the open drive and putting us into an early range extension down. The selling continued throughout the morning and lunch, coming to a climatic end around 1:45pm when a sharp excess low formed. We were down in levels unseen since October 6th (three Tuesdays back) when we found the bid—right at the low volume node of the big market profile we built between 10/2 and 10/9. It was all buying from then on, and buyers managed to return price back near the midpoint by end-of-day.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 11,500.50. Sellers continue lower, down through overnight low 11,478.25. Look for buyers down at 11,424.25 and for two way trade to ensue.

Hypo 2 buyers gap-and-go, trading up though overnight high 11,566 and tagging 11,600 before two way trade ensues.

Hypo 3 stronger buyers trade up to 11,700 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into the final week of October gap down after an overnight session featuring elevated volume on extreme range. Price opened gap down Sunday evening, rotating lower, bouncing once, then rotating lower a second time—taking out the Friday low. As we approach cash open, price is hovering inside Friday’s range, along the low.

On the economic calendar today we have new home sales at 10am followed by 3- and 6-month T-bill auctions at 11:30am.

Last week featured a big sell Monday. Downward pressure through Thursday morning then a minor relief rally into the weekend.

The last week performance of each major index is shown below:

On Friday the NASDAQ printed a neutral extreme up. The day began with a gap up in range that sellers drove down into on the open, quickly resolving the gap and continuing lower into the bottom quadrant of Thursday’s range. Price was choppy through about noon, pressing range extension down along the way but never taking out the Thursday low. The afternoon was all buyers. A steady rotation up eventually recovered the early selling and a new high of day way made near the close. Closed near the highs.

Neutral extreme up.

Heading into today my primary expectation is for buyers to work into the overnight inventory and take out overnight high 11,642 on the way to closing the overnight gap at 11,661. Look for sellers up at 11,700 and for two way trade to ensue.

Hypo 2 sellers take out overnight low 11,543 and tag 11,500 before two way trade ensues.

Hypo 3 stronger buyers trade up to 11,800 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into Tuesday with a slight gap up after an overnight session featuring extreme range and volume. Price shot higher overnight, driving unidirectional up from closing bell until about 8pm New York. The rest of the session was spent balancing down in the lower quadrant until about 8am when sellers made a push out of the Globex range. At 8:30am housing starts and permits came out in line with expectations (which remain high). As we approach cash open, price is hovering in the lower quadrant of Monday’s range.

There are no other important economic events scheduled today. Some low-impact Fed speak is due out in the afternoon.

Yesterday we printed a trend down. The day began with a slight gap up. A brief open-two-way auction took place right along Friday’s volume point of control before sellers stepped in and drove down into the overnight gap and took out the Friday low in the same swoop. Initially buyers stepped in ahead of the Thursday (weekly) low however, and there was a battle along the lows until about 2pm when sellers overwhelmed the bid and the auction continued lower. Of note, the daily VPOC never shifted lower from those mid-day battle levels—it remains near last week’s low. The selling continued however, trading down right to the key fibonocci level right at 11,600, that we see if we draw a retrace from the the 10/6 low to the 10/13 high. We ended the session on the lows.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 11,648.75. From here we continue lower, down through overnight low 11,633.50. Look for buyers down at 11,558.50 and for two way trade to ensue.

Hypo 2 stronger sellers press down to 11,500 before two way trade ensues.

Hypo 3 buyers work up through overnight high 11,753 setting up a move to tag the Monday VPOC at 11,800 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are up +100 ahead of opening bell after an overnight session featuring extreme range and volume. Price worked higher overnight, spiking up on the Globex open last night before stabilizing around 11pm New York along the bottom-side of Friday’s midpoint. Then around 3am buyers reclaimed the Friday mid, and as we approach cash open price is hovering right on the mid. At 8am Fed Chairman Jerome Powell discussed the role of the U. S. dollar as reserve currency and said the Fed is taking a closer look at issuing a digital currency. The announcement spiked bitcoin higher but equity markets are so far non-reactive.

Also on the economic calendar today we have housing market index at 10am followed by 3- and 6-month T-bill auctions at 11:30am.

Last week kicked off with a choppy open, slight selling before a big Monday rally. Price consolidated the gains through Wednesday morning. Then selling pressure was seen into the second half of the week and into the weekend. The last week performance of each major index is shown below:

On Friday the NASDAQ printed a normal variation down. The day began with a gap up beyond the Thursday range. Buyers campaigned up into the Wednesday range, tagging the midpoint before 10:30am. Responsive sellers here overwhelmed the big and the auction reversed course—pressing range extension down on its way to closing the overnight gap. Price consolidated here, below the daily mid, for several hours. Then there was strong selling during the closing hour, pressing to to a new session low and tagging the Thursday naked VPOC.

Heading into today my primary expectation is for sellers to work into the overnight inventory and closing the gap down to 11797.75. Sellers continue lower, filling last Friday’s open gap down at 11,726.25 before two way trade ensues.

Hypo 2 buyers gap-and-go higher, taking out overnight high 11,949.25 on their way to tagging 12,000 before two way trade ensues.

Hypo 3 stronger buyers tag 12,037 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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Quick note: After bears were trounced yesterday and with month-end/quarter-end only two days out, my bearish convictions have been called into question  at a time when the likelihood of a big move is high. I have no edge statistically, and my perception is off. Today we have a gap down in range and normally I would fade this gap higher, but I will not be participating. Now back to your regularly scheduled trading plan.

-Raul Santos, September 29th 2020

NASDAQ futures are coming into Tuesday, the second-to-last day of Q3 with a slight gap down after an overnight session featuring extreme range and volume. Price was steady last night, gently pressing up beyond the Monday high until about 10pm New York. From then onward the rotation was lower. At 8:30am advance good trade balance data came out mixed, and as we approach cash open price is hovering in the upper quadrant of Monday’s range.

Also on the economic calendar today we have consumer confidence at 10am.

Yesterday we printed a neutral extreme up. The day began with a pro gap up opening up at levels unseen since September 16th. The morning was spent attempting lower. Sellers drove down into the opening bell then held the mid on three attempts at it. Each time sellers made a slightly lower low, but not much progress. Around 12:30pm, after failing three times to take out the September 16th low, buyers stepped in and reclaimed the mid then continued higher, pressing neutral. We ended the day on the highs, tagging the September 16th naked VPOC right during the closing ramp.

Heading into today my primary expectation is for buyers to press into the overnight inventory and close the gap up to 11,395.50. Buyers take out overnight high 11,448.75 clearing the way for a run up to 11,480.75 before two way trade ensues.

Hypo 2 sellers take out overnight low 11,333.75 and tag 11,311.25 before two way trade ensues.

Hypo 3 stronger sellers take out the Monday low 11,226.25 setting up a Friday gap fill down to 11,135.25.

Levels:

Volume profiles, gaps and measured moves:

 

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NASDAQ futures are coming into Monday pro gap up after an overnight session featuring extreme range and volume. After a two way auction from Globex open until about 10pm a steady campaign higher took hold. Price has rallied unidirectional up since, and as we approach cash open price is hovering inside the upper quadrant of the 09/17 range (two Thursday’s back).

On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.

Recall last week started with a big down gap then lots of chop. Price chopped higher through Tuesday then lower until Friday morning. Then a big trend up Friday and into the weekend. The last week performance of each major index is shown below:

On Friday the NASDAQ printed a trend up. The day began with a pretty wide and choppy two-way auction, chopping all over the midpoint several times before around 10:20am when buyers took control of the tape. From then on we were trend up, ending the week just below the weekly high and near session high.

Heading into today my primary expectation is for a short squeeze on the open, squeezing up to 11,442.75 before two way trade ensues.

Hypo 2 sellers work into the overnight inventory and close the gap down to 11,135.25. Sellers continue lower, down through overnight low 11,125. Look for buyers down at 11,100 and for two way trade to ensue.

Hypo 3 stronger sellers liquidate down to 10,960 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume. Price was balanced overnight, balancing below Wednesday’s low for much of the Globex session before about 8:30am. At 8:30am jobless claims came out in-line with analyst consensus. Still, it sent price lower and as we approach cash open, price is trading right along the Monday low.

Also on the economic calendar today we have new home sales at 10am along with Fed Chairman Powell speak. At 11:30am there are 4- and 8-week T-bill auctions at there is a bunch of Fed speak due out from less important bankers from 12-1pm.

Yesterday we printed a trend down. The day began with a very slight gap up that was resolved during an open two-way auction. That would be the extent of the control buyers would have on the day. Price quickly drove down below the Tuesday midpoint and the daily midpoint wall until about 11:30am when sellers became initiative and drove lower, taking out the Tuesday low by about 2:30pm and eventually tagging the Monday naked VPOC. We ended the day near the low.

Trend down.

Heading into today my primary expectation is for a choppy battle. Buyers are seen defending ahead of 10,600 and we chop in this 10,600-10,700 range.

Hypo 2 stronger sellers gap-and-go lower, taking out 10,600 and sustaining trade below it to set up a run to 10,553.75. Look for buyers down at 10,527.50 and for two way trade ensue.

Hypo 3 buyers press into the overnight inventory and close the gap up to 10,830. Buyers continue higher, taking out overnight high 10,847 on their way to tagging 10,900.

Levels:

Volume profiles, gaps and measured moves:

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