Nasdaq futures are coming into the new week (and new month) gap up. The globex session featured an abnormal range on high-end normal volume. The defining feature of the session was a large rotation up, nearly 30 points, that occurred from about 7am to 7:45am. The move is being attributed to rumors of a Greek accord coming out.

We had Personal Consumption data out at 8:30am which came in softer than expected. It introduced a bit of selling into the market. We also have Markit Manufacturing PMI at 9:45am, and Construction Spending/ISM Manufacturing at 10am.

Last week was a holiday shortened week. We came into Tuesday gap down and trended lower most of the session before finding buyers in the former resistance zone from back on 5/8-5/13. They worked price nearly 30 points off the lows Tuesday which led to Wednesday when buyers became initiative and trended price higher all day. Thursday and Friday we chopped about in Wednesday’s upper half range.

Heading into today, my primary expectation is for sellers to work into the overnight inventory. The push to green was rumor driven and may stick, but I will look for sellers to attempt a gap fill down to 4516.75. From there I will look for buyers to come in and work higher to target the open gap at 4543.25 then a test of Wednesday’s high 4547.50.

Hypo 2 buyers gap-and-go higher, take out the gap up at 4543.25 before stalling out and rolling over to chop around 4520.50 for the rest of the session.

Hypo 3 gap-and-go higher, take out and sustain trade above 4543.25 to set up a leg higher to new swing high. Measured move targets are 4557, 4560.75, and 4565.75.

Hypo 4 sellers fade the overnight move, take out overnight low 4506.50 and undo Wednesday’s trend day by testing below it 4497.25.

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Nasdaq futures were balanced overnight, trading normal range and volume within the upper quad of yesterday’s trend day. At 8:30am initial/continuing jobless claims data came in solid with Claims holding below 300k for the 12^th straight week. The initial reaction to the news is muted.

Also on the calendar today we have Pending Home Sales at 10am, Natural Gas Storage figures at 10:30am, and Crude/Distillate inventory at 11am.

Yesterday buyers came in early and put together a trend day. The action was successfully in traversing the entire developing value area. The day prior (Tuesday) we traversed the range in the opposite direction. We managed to take out the lingering naked VPOC at 4543.50, a reference point left behind on 4/27, the day we hit contract high. Price went slightly beyond the reference point before stalling out ahead of contract high.

Heading into today, my expectations for index moves are low. I am looking for action to slow down and grind with a slight upward bias. Look for buyers to sustain trade above overnight low 4531.25 and set up a push to take out overnight high 4543.75 and test above yesterday’s high 4551.

Hypo 2 sellers continue pushing, take out the overnight low 4531.25 and test the LVN at 4520.50. If buyers cannot defend then we continue testing lower target the MCVPOC at 4508.25.

Hypo 3 buyers try a push higher, stall out around 4540, failing to take out overnight high, setup up a move lower to revisit the LVN at 4520.50.

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Nasdaq futures are trading a touch higher as we head into US open. The overnight session kicked off atop a 30 point afternoon bounce that buyers managed to put together after facing heavy selling most of the session. Range on the overnight session is normal on a normal amount of volume.

The economic calendar is open today. Overnight the Bank of Japan released the minutes from their April 30^th meeting. It yielded little reaction from US equity futures however it has put continued upward pressure on the USD/JPY currency pair. We also had MBA Mortgage Applications at 7am this morning which came in a bit worse than expected and also yielded little reaction.

Yesterday we came into the holiday-shortened week gap down and had an open auction outside range before failing lower. Selling pressure was heavy throughout most of the morning and attributed to news about the Europe/Greek situation.

The nature of the move calls it into question. It was news driven and left behind a string of poorly auctioned prices. If the move is legitimately the start of a correction, then we likely won’t spend much time above the overnight high 4490.50.

Heading into today, my primary expectation is for sellers to push into the overnight inventory to close the gap to 4481.25 and a continuation lower to push into yesterday’s bounce. I will look for signs of buyers at 4470 who work us back up above 4485.

Hypo 2 is buyers push above the overnight high 4490.50 early and we begin “climbing the pole” up to 4525.

Hypo 3 is sellers push but struggle to close overnight gap before buyers step in and we begin the pole climb.

Hypo 4 liquidation continues. Look for buyers around 4460 who ultimately are overrun and we continue exploring lower prices. Stretch target is the open gap at 4424.25.

Levels:

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Nasdaq futures are lower ahead of the start to a holiday shortened week. The session featured big rotations both up and down, and volume is running just a touch above first sigma while range remained compressed into normal territory.

The economic calendar is chock-full of events to wade through today. At 8:30am Durable Goods Orders came in-line with expectations with orders for Capital Equipment climbing for a second month. The initial reaction to the data is selling. Also on the docket today we have House Price Index at 9am, Markit Composite PMI at 9:45am, and New Home Sales and Consumer Confidence at 10am. Also this evening the minutes from the Bank of Japan’s April 30^th meeting will be released.

If I had the software capabilities to do it, I would completely remove Monday’s trading action from my charts. I am skeptical to give any weight to trade data that occurred while the underlying components were closed. Conversely, on my Market Profile chart (the letters and turquoise shaded volume distribution) I prefer to see all activity on the Nasdaq futures.

We formed a large distribution last week (and during the holiday) just below our contract-high session back on April 27^th. Instead of making new highs, the distribution formed and then we headed lower. Meanwhile, on a slightly higher time frame, we are coming into balance. This can be seen as several sessions of overlapping price action. Overall it seems the market is accepting higher prices and forming value.

Heading into today, my primary expectation is for choppy action. With the busy economic schedule and the holiday rebalancing needed, fits and starts with little accomplished seems likely. I will look for buyers to push into the overnight inventory and take out the overnight high 4528.25. I will look for signs of sellers up around 4530 who work us back lower. The I will look for the remainder of the session to back-and-fill around 4520.50.

Hypo 2 sellers push the lower early on, taking out 4503.25. Look for buyers around 4496.25 then two way trade to set in around the MCVPOC at 4504.

Hypo 3 sellers push down through the volume pocket at 4496.25 to test down to 4489.50 where buyers come in and we back-and-fill around 4496.25.

Hypo 4 buyers push up through 4536 and sustain trade above it, setting up a run to new highs.

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The overnight session was fairly quiet up until CPI data at 8:30am which pushed some sellers onto the tape. Overall the session is normal in range and volume and trading in the upper quad of yesterday’s session.

On deck this afternoon we have Fed Chair Yellen speaking at 1pm. We have the Baker Hughes Rig Count data out at the same time.

Yesterday we printed a short squeeze-type profile, P-shaped. Sustained trade below overnight low 4523 is what sellers want to see to take back the session.

Heading into today, my primary expectation is for buyers to work higher to test overnight high 4535.50 and take it out to target the NVPOC at 4543.50.

Hypo 2 sellers sustain below 4523 setting up a washout lower to 4500.

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Nasdaq futures are trading a touch lower as we head into cash open. The overnight session was normal in terms of range but volume is borderline abnormal. On the economic calendar we have a flurry of low/medium impact events to push through this morning. At 8:30am Chicago Fed National Activity Index and Initial/Continuing Jobless Claims data was out and saw little reaction from the market.

Late on this morning we have Markit Manufacturing PMI at 9:45am, a data dump including Existing Home Sales, Leading Indicators, and Philadelphia Fed at 10am, and Natural Gas storage stats at 10:30am.

Yesterday we printed a curious-looking normal variation day. Price managed to push up to new weekly high before sellers knocked it back flat into the close. The last four sessions have compressed price into a range—the first real contraction in volatility we’ve seen in several weeks.

The action has made the market profile chart a bit odd, so I drew a micro composite volume profile of the last 4 sessions to see better what’s going on here (green and red distribution pictured below).

Heading into today, my primary expectation is for a choppy 2-way open until we push through all the morning data. Look for price to stay contained between 4481.25 to 4504. Then look for buyers to come in and work price higher.

Hypo 2 sellers push down through 4479.25 to open up a liquidation down to 4458.75.

Hypo 3 buyers make a run for yesterday’s session high 4534 to target 4539.

Levels:

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Nasdaq futures are set to open a touch higher for Wednesday after trading a balanced session overnight on low-end normal range and volume. The GDP data out overnight from Japan turned out to be not much of an event and the US dollar strength held overnight.

Today we had MBA Mortgage Apps at 7am. Coming up we have the weekly Crude/Distillate report at 10:30am and the collective attention of traders will at some point be focused on the Fed Minutes due out at 2pm.

Yesterday we printed a normal variation down day. Buyers defended Monday’s mid around the close when a late wave of selling came through.

Heading into today, I expect any early excitement to quickly fizzle and the markets to go into chop mode ahead of the afternoon minutes. Look for buyers to make a push up through overnight high 4510.50. Look for responsive sellers to defend near 4515 and two way chop to ensue with 4498 as a floor.

Hypo 2 sellers push off the open, close the overnight gap to 4501 and continue lower to take out overnight low 4496.75 and push below yesterday’s low. Look for buyers at 4491.50 and two-way trade.

Hypo 3 strong buying up through 4515 to target 4531.25.

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Nasdaq futures are up a touch as we head into Tuesday. Range and volume are normal and per the structure of the market profile we can classify the current action. It is a temporary phenomenon known as a short squeeze where price moves higher as shorts are forced to liquidate their positions. Once they are done doing so, the profile takes on a P-shape.

In the context of a downtrend this structure tends to occur at-or-near inflection points. In our current context, choppy range, it may also mean something. However, the higher time frame is up so it ‘s difficult to assign it too much weight initially.

At 8:30am we had upbeats stats on housing stats which slowly introduced sellers into the index. It will be interesting to see if sellers keep us south of 4521.50 heading into cash open.

Yesterday we formed a double distribution trend day and pushed higher to close the 4/28 gap up at 4515.50 before stalling out. Value managed to shift up near session high just before the day wrapped up. This suggests value, not just price, were on the move higher.

As I wrap up my post the short squeeze profile is deteriorating as sellers work into the tape.

Heading into today, my primary hypothesis is sellers push into the overnight inventory to close the overnight gap down to 4507.25. From here to 4504.50 I will look for signs of responsive buying. If buyers no show, then I will look for a continued move down to 4491.50.

Hypo 2 is buyers push off the open and reclaim 4521.50 early and sustain trade above it setting up another leg up to target 4531.25 then 4535.25. Look for responsive sellers up near 4539.

Hypo 3 buyers push, stall around 4521 and we reverse lower to fill overnight gap 4507.25 and then two way chop ensues.

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Nasdaq futures spent the overnight session slowly drifting higher and did so on normal range and volume. One structural element currently stands out on the session, a weak high, seen clearly on the market profile as a double TPO print and an overall lopsided bell structure.

Today is the most action packed day of the week from an economic announcement standpoint. At 9:15am Industrial Production data is out followed by The May Preliminary reading of the U of Michigan Confidence number. The preliminary reading has recently been a successful number in generating a reaction from the market. Energy traders will be watching the Baker Hughes Rig Count at 1pm and at the close we have Net Long-Term Tic Flows.

Yesterday price opened pro gap up, above the prior day’s range and had an open auction that we briefly tested below before the market went one time frame up. The result was a trend day print. Market profile theory states any entry in the direction of a trend is a risk free entry into the following session. Therefore, expectation is for price to exceed the trend day high by at least a tick.

Heading into today, my primary expectation is for sellers to push into the overnight inventory. I expect some choppiness before 10am’s data. Look for buyers to defend north of 4493 and then work to take out the weak overnight high at 4507.50 to target 4517.25 before two-way trade ensues.

Hypo 2 we push down into the upper quad of yesterday’s trend day, taking out overnight low 4488 and looking for responsive buyers ahead of 4480 and two way trade ensues.

Hypo 3, gap and go higher, take out 4517.25 early and sustain trade above 4520, setting up a secondary leg up to 4538.75.

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Nasdaq is set to open pro gap as we head into Thursday. The overnight session features 44 point of range so far, nearly 2^nd sigma which is 46.75 points. That tells us the session was quite abnormal, and on the borderline of being different than 95% of all overnight sessions over the last three years.

Volume behind the move is light, in typically upward fashion, currently within the threshold of normal.

We heard the initial/continuing jobless claims at 8:30am and so relatively little reaction to the data point. The only other economic event scheduled for today is the EIA Natural Gas Storage data at 10:30am.

The Nasdaq is auctioning in a methodical manner. Tuesday’s big gap lower was faded. We found responsive buyers Tuesday and spent the rest of the session trading higher. Yesterday we opened gap up and spent the entire session slowly working the gap fill lower. Today’s gap up is on the professional variety but still at risk of being filled. Conversely, there I an open gap up at 4476.25 which may entice the market upward. Overall the market has been an objective mechanism of price discovery all week.

Heading into today, my primary expectation is for sellers to push into the overnight inventory. There’s a big HVN at 4450 that might behave like a magnet once markets open. I will look for buyers to defend north of 4440 to set up a move to fill the gap up to 4476.25.

Hypo 2 is gap and go higher, push up to 4476.25 and find sellers who defend the 05/04 range.

Hypo 3 sellers push down though 4440 and sustain, setting up a fill of the overnight gap to 4424.25.

Hypo 4 bulls sustain trade above 4476.25 to target the NVPOC at 4489. Stretch target is 4493.

Levels:

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