Nasdaq futures are priced to start month-end/quarter-end with a pro gap up. Prices worked higher for most of the overnight session and managed to print an above average range on above average volume. The action, overall, resembled an imbalanced drift higher and was confined to the bottom half of yesterday’s range.

At 9am the Case Shiller Composite was released and saw little reaction. At 9:45 we have Chicago Purchasing Manager, and at 10am Consumer Confidence. Overall, these economic events are likely to contribute to a volatile, choppy environment this morning.

Yesterday we came into the week pro gap down, an extreme gap that was driven by news over the weekend about Greece. After bulls mounted a half-gap fill they ran into sellers and the market rolled back over. We spent the rest of the session trending lower. There were signs of balance in the morning, but that quickly gave way to OTF selling. The volume was high at end-of-day and enough to shift the VPOC down near session low.

According to market profile theory, any entry in the direction of yesterday’s trend (short) is a risk free entry into today’s session because we are very likely to exceed its session low by at least a tick. Therefore my primary hypothesis today is for sellers to push into the overnight inventory to close the overnight gap down to 4380 setting up a test of yesterday’s low 4368.25. Look for sellers to target a move down to 4353.75. Look for responsive buyers north of 4347.25.

Hypo 2 buyers gap-and-go higher, stall out around 4411.50 and we roll over and close the overnight gap to 4380, test below yesterday’s low 4368.25 and quickly find responsive buyers and two-way trade ensues.

Hypo 3 buyers push up through 4414.25 and we work through the upper distribution to target 4430 then a stretch target of 4440.

Levels:

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Nasdaq futures are down as we head into the holiday shortened week after news from Greece began to deteriorate over the weekend. Futures opened and immediately pushed gap down to 4400 before a well-balanced, 2-way trade ensued. Volume is abnormal but not breaching the extreme 2^nd sigma threshold. The range on trade post-gap down is elevated, but including the range of the gap we have extreme 2^nd sigma range.

I envision this Greek news slowly fizzling out this week, but as for today, it’s likely to be of elevated importance. With headline risk high, we may see less impact to today’s only economic event—Pending Home Sales at 10am. Keep in mind, we have NFP data out on Thursday instead of Friday due to Independence Day (USA#1).

Last week we started with a big gap up and essentially spent the rest of the week fading it lower. On Friday liquidation accelerated through an air pocket present on the profile before finding responsive buyers to end the week.

Heading into today, my primary expectation is for buyers to push into the overnight inventory and test higher. Look for sellers to defend 4446 and two way trade to ensue, north of the overnight low 4400.

Hypo 2 buyers push up through 4446.75 and continue higher to 4467. If they can breach this levels as well, look for a throwback to the scene of the crime, the open gap up at 4481.75. Note, this is pro gap territory—thus attempting to fade it is an effort requiring “professional” resources. The half gap scenario above is more likely.

Hypo 3 we take out overnight low 4400 and test below prior swing low 4386.50. Look for responsive buyers otherwise liquidation grip the market and sellers push to target 4353.50.

Levels:

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Nasdaq futures saw an active session overnight with both range and volume coming in a bit ahead of normal. Price spent most of the evening pushing lower until finding buyers ahead of yesterday’s cash session low 4386.50. Since then, we’ve spent most of the early morning working higher.

At 8:30am, Housing Starts came in a bit worse than expected and Building Permits a bit better—thus the data was mixed. The initial reaction to the news is buy flow. Aside from those events, the US economic docket is empty for the day, and investors are likely focusing on tomorrow afternoon’s FOMC Rate Decision.

Yesterday the market opened pro gap down and saw an aggressive liquidation-type push lower early. The price action exceeded last week’s low 4390.25 before finding a sharp responsive bid. After a thorough churn at the 4400 century mark, intraday responsive buyers became initiative and we spent the rest of the session grinding higher. Buyers managed to trade up to the 06/09 open gap left behind last week Wednesday when we opened gap up and trended higher. This action exhibits the continued methodical manner by which our market is trading—very healthy overall.

Heading into today, my primary expectation is for buyer to work into the overnight inventory to close the overnight gap up to 4426.75. This sets up a push above overnight high 4428.75 and puts buyers well on their way to closing the weekly gap up to 4448.25. Look for sellers to defend last Friday’s range low 4440.50. Gauge short term control on whether buyers are able fully close the gap up to 4448.25 or if instead they fizzle out ahead of it.

Hypo 2 buyers push into overnight inventory but stall around 4421.50 and price rolls over. Sellers target overnight low 4395.75 setting up a test of Monday’s session low 4386.50. If buyers cannot defend then look for liquidation to take hold and push price down to 4360.50.

Hypo 3 sellers gap-and-go lower, take out overnight low 4395.7 5early and push to 4360.50 where we find responsive buying.

Hypo 4 churn takes hold, as investors wait for tomorrow’s FOMC decision, between 4433.50 and 4396.25.

Levels:

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