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Action Heating Up

Range elevated just a touch beyond normal overnight while volume came in normal during globex. The market continued pushed lower overnight before finding buyers around Friday’s session low to bring us back flat headed into Tuesday. Advance Retail Sales came in a bit softer than expected at 8:30am and the data encouraged a bit more buying.

This is where the week starts becoming interesting. WFC and JPM earnings are out this morning and neither has made a dramatic premarket move. The financial sector has coiled over time and we may see the compression resolve as the banks earnings continue to roll in. Also important is tonight’s GDP data out of China. All eyes are on the red giant as its stock market soars. Finally, the Nasdaq is likely to be reactive to the INTC earnings scheduled for release after market close.

Yesterday the week started with a small gap up then an open drive higher. Price managed to tag the naked VPOC at 4438.25 and go slightly beyond it before stalling out. Sellers then slowly worked the market lower before accelerating down through the open drive to extend the range lower.

Intermediate term conditions are neutral, but overall context is bull.

Heading into today, my primary expectation is for sellers to make a push to test 4395. Look for responsive buying here. Choppy conditions between 4395 and 4405 give way to another leg lower to target 4382 and a stretch target of 4379 before 2-way trade resumes.

Hypo 2 is buyers push off the open to 4415 where responsive sellers are found and two-way trade ensues with buyers sustaining above 4395.

Hypo 3 is buyers make an aggressive push back above 4415 which leads to a second leg up to 4429.25.

Levels are highlighted below:

NQ_MP_04142015

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A Taste of Their Own Medicine

Nasdaq futures are set to open flat after spending the globex session consolidating along the upper-end of Thursday’s range.   The economic calendar was quiet this morning and has little scheduled for this breezy Friday. Around 12:20 Fed’s Kocherlakota is scheduled to speak, but these talks have not carried much weight recently. At 1pm energy traders will have a look at the Baker Hughes Rig Count and at 2pm the US Monthly Budget Statement is out.

Yesterday the Nasdaq printed a neutral extreme day. Bulls used a tactic recently employed by sellers (Tuesday, 4/7) and made a late-day second range extension. Of day-types generally observed by market profile theorists, the neutral extreme carries one of the highest directional convictions. Thus when Tuesday printed one, it likely enticed bears into thinking they could build off it. When Wednesday opened strongly against them it may have created tinder. Today it will be the bull’s job to hash out whether they truly meant business with their intra-day and late-date initiative buying.

Location wise, we are trading in the fast Fed reaction range (about 4410 – 4375) where price can move fast. If we instead build out lots of time and volume at these prices, that would suggest a significant sentiment shift is underway.

Heading into today, my primary expectation is for buyers to continue exploring higher prices. Look for a move to take out overnight high 4403 and continue higher to target 4414.50. From here to about 4418 I will look for responsive sellers to come in and 2-way trade to ensue.

Hypo 2 is sellers push down though overnight low 4393.25 and accelerate us down to 4382.25. From here to about 4379.25 I will look for signs of responsive buyers and 2-way trade to ensue.

Hypo 3 is buyers take out 4418.25 early and sustain trade above it, setting up for a drive higher to 4440.

Hypo 4 is we fall down through yesterday’s range and test out 4365.

Level are highlighted below:

NQ_MP_04102015

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Careful: Slip Zone Below

Nasdaq futures are priced to trade flat/higher at the open after a normal-looking overnight session. Price spent most of globex in 2-way trade contained in the upper quad of yesterday’s trend day. Price managed to take out yesterday’s high a few times before ultimately falling back to the middle of range.

Intermediate term, we are trading neutral. We’ve spent the last 3 weeks oscillating but not really going anywhere. Instead we are bouncing along the tips of prior resistance. Bulls have struggled to confidently convert the prior resistance into support but have managed to hold the line thus far.

The nature of yesterday’s push higher means the ground below is us unstable all the way down to about 4280. Thus as enthusiastic as the rally was, bulls will want to see additional progress made away from this fast region. Conversely, the structures above are well established value curves suggesting it will take sustained demand to work through the thick supply.

Heading into today, my primary expectation is for buyers to make a move for overnight high 4357. If they do so, then look for a test up to 4362.25 where we find responsive sellers and 2-way trade ensues. The market may go into “wait and see” mode sooner than some anticipate with Wednesday afternoon’s FOMC minutes scheduled.

Hypo 2 is sellers push the overnight lows 4337 and work toward 4328.25 before finding responsive buying and stabling out, perhaps even printing a neutral day.

Hypo 3 is sellers accelerate us down below 4328.25 and set up a trend back down the zipper, all the way down to 4280.

Hypo 4 is buyers sustain trade above 4362.25 and continue on to test 4374.25 – 4375.75.

Levels:NQ_MP_04072015

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Mapping Out A Fresh Week of Trade

Nasdaq futures are lower as we head into a fresh week of trade. Sunday evening we came into globex well below Thursday’s closing price due to a reactionary sell to Non-Farm Payroll data during the holiday shortened session Friday. Since opening yesterday evening volumes have been abnormally light and trade behavior has been 2-way.

The nature of the price move lower (news driven, low volume, outside of regular trade) makes it suspect. However, it has thrown us out of balance and therefore is likely to induce the higher time frame participants into the market. This means an elevated risk:reward environment intra-day. It also means I have an expectation for us to return to the scene of the crime, prices much higher, around Thursday’s close 4307.50.

Heading into today, my primary expectation is for buyers to push into the overnight inventory and test up to 4286.75. Here I will look for signs of responsive selling and 2-way chop to ensue which holds value low 4272.50. If this sets up, look for a secondary leg higher to test the 4300 century mark.

Hypo 2 is sellers become initiative off the open and press to take out the overnight low 4262. Look for signs of responsive buying around 4255.75 and 2-way trade to ensure.

Hypo 3 is an aggressive buying response, drive-like open when recaptures 4300 early and makes a full gap fill move up to 4307.50.

Hypo 4 is a gap-and-go trend lower.

Levels are highlighted below:

NQ_MP_04062015

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No More Clowning Around

Nasdaq futures managed to print an abnormal range but volume has returned to normal as we head into Thursday. The session traded inside of yesterday’s range and found responsive buying down near the VPOC of the session (4290.50). The session was balanced.

Yesterday we printed the elusive normal day—a day where the first hour’s range is never exceeded for the remainder of the session. These day types suggest an other time frame was aggressive at the open but never became initiative intraday and 2-way trade ensued. It could be early signs of a pause ahead of tomorrow morning’s NonFarm Payroll change.

Overall, the short term is seller dominant, and the last 2-3 weeks are neutral. We are trading along the peaks of prior resistance and buyers have three times defended their progress. The more tests lower we have, the weaker their ranks become.

My primary hypothesis on the session is for buyers to sustain trade above 4300 and make a push to take out overnight high 4319.75. Look for responsive sellers around 4326 otherwise continue higher to 4338.50.

Hypo 2 is sellers push down through 4300 and push down to 4285 where responsive buying comes in and 2-way trade ensures.

Hypo 3 is a strong selling take out 4285 and test below yesterday’s session low 4275.75 to target 4255.

Levels:

NQ_MP_04022015

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Wake Up

Nasdaq futures went on a ride overnight where both the volume and rang exceeded second sigma.  During the hour and a half ahead of closing bell price started selling fast and on volume. The abnormal globex session continued to see selling, fast at times, which pushed below the prior (3/13) swing low before finding buyers.

Once it found buyers the auction reversed, and particularly after midnight price began moving upward with speed. The action nearly went round-trip as we head into cash open. And this morning like likely to be a busy one.

At 8:15 the ADP Employment Change data was weaker than expected. This news was met with a buying reaction. Also on the agenda today is Markit Manufacturing PMI at 9:45am, ISM Manufacturing at 10am, Fed’s Lockhart talking monetary policy at 10:30am, and oil/gas inventories out at 10:30am as well.

Turning to the market profile chart, the carnage of last night’s session revealed a territory where buyers are being aggressive. Just below 4285 buyers have demonstrated aggressive control. Should that price level trade again today, I would expect a similar response, otherwise I would deduce a material shift in context has taken place.

Price is currently pinned within a well-defined value area dating back to 3/26. Essentially, how we break from the 4324 – 4305 range will determine direction in the short term.

Heading into today, my primary expectation is for buyers to attempt to push back into Tuesday’s range (4320.75) and claw back into the value area up at 4350. However I anticipate responsive sellers will defend this region.

Hypo 2 is seller push off the open to 4305 where responsive buyers step in and we stick in the 4324 – 4305 range.

Hypo 3 is sellers blow through 4305 to set up a test of the responsive buying zone below 4285. If buyers do not defend we could see a fast flush.

Hypo 4 is buyers reclaim 4350 and continue pressing higher to target 4362.

Levels are highlighted below:

NQ_MP_04012015

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Speed Zones on Both Sides of The Tape

Nasdaq futures are set to gap up this Monday after trading an abnormal 50 point range during globex. Around 8pm buyers started working, and just before 11pm a large stop-run style push worked through. The move held though some 2-way action and ahead of the European markets opening it went on a secondary rally before finding sellers right as Euro markets opened.

Price is set to open inside the afternoon value zone formed last Wednesday during the trend lower. On both sides of this distribution the action can accelerate. Thus today carries an elevated risk:reward.

At 8:30am we had Personal Spending/Consumption data and saw a muted reaction. At 10am Pending Home Sales are out, and keep in mind we have German Unemployment stats out tonight.

Heading into today, my primary expectation is for sellers to work into this overnight inventory. Look for a struggle at 4338.75 but sellers manage to take out that area and work to 4323.

Hypo 2 is buyers sustain trade above 4338 and continue working higher. If they can take out overnight high 4367.50 then look for a push up through 4381 to run up the thin area to 4397.

Hypo 3 is we stick in a range between 4360 and 4340 (unlikely).

Levels:

NQ_MP_03302015

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Salvaging The Week

Nasdaq bulls were knocked around well this week by sellers who took advantage of the thin market profile left behind after the Fed back on 3/18. After sliding down through that region they used their momentum to overshoot the reaction zone and close the 3/13 gap and push through most of its range.

Futures were flat heading into the 8:30am GDP and Personal Consumption data. Also on the agenda today is the U of M Confidence data at 10am, Baker Hughes Rig Count at 1pm, and a sneaky 3:45pm Yellen speaking engagement on Monetary Policy. The initial reaction after the GDP data was selling.

Heading into today, my primary expectation is for buyer to attempt a continuation of yesterday’s rebound. If they can push above yesterday’s session high 4331 I will look for an accelerated move up to the NVPOC at 4350.75.

Hypo 2 is sellers push us below 4300 early on and sustain trade below it to set up a move toward overnight low 4297.25 then a continued exploration lower below Thursday’s low 4271.75. If responsive buyers are not found here, then it opens the door for a push down to 4250.

Levels are highlighted below:

NQ_MPVP_03272015

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The Speed Is Back (So Soon?)

Nasdaq futures are running abnormally hot this morning with extreme range readings (beyond 2nd sigma) and abnormal volume. The market managed to 1 time frame down (price discovery) up until about 6am when buyers began defending just below the 3/13 swing low. At 8:30am initial/continuing jobless claim readings initially brought more selling in but have since reversed said losses.

Also on the economic calendar today is Markit Composite/Service PMI at 9:45am, Natural Gas storage stats at 10:30am, and Kansas City Fed Manufacturing activity at 11am. Keep in mind there are also some GPD readings out Friday before market open.

The market is currently pricing a pro gap down. Any attempt to fade this move would require significant resources. The open print will be way out of balance and is likely to encourage other time frame activity.

Taking to the charts, we can see sellers probing back into the upper-most distribution of our multi-month consolidation which precluded the latest rally. Now that we have pushed through its HVN (4285.25) it is likely we test down through the other side of it which would mean a move to about 4250.

Heading into today my primary expectation is for some whipsaw at the open before buyers make an attempt higher to work into the overnight inventory. Look for sellers to defend ahead of 4308.75 to set up a move below the overnight low 4270.

Hypo 2 is a full gap fill up to 4325.50.

Hypo 3 is a gap and go lower to continue the 1 time frame trending activity.

Hypo 4 is a push below overnight low 4270 which is met by responsive buying ahead of 4250 and we balance out on the lower end of the top distribution.

These levels are highlighted below:

NQ_MPVP_03262015

 

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More Slow Play at The Nasdaq

This morning promises to be a choppy one. After a sedentary session yesterday, price and value have settled into a stable pocket with a well-established distribution both above and below our current area. Please, see more clearly what I mean below where I have marked the key reference points and a two visual hypotheses:

NQ_MP_03242015

Adding tinder to the potential for a choppy open is the sexy world of economic releases. CPI (Feb, YoY) was out at 8:30am and firmed up more than expected leading to rate hike talk. Price initial pushed lower by has since gone unchanged off the data. Several more data will spatter out this morning including House Price Index at 9am, Markit Manufacturing PMI at 9:45am, and New Home Sales at 10am.

Heading into today, my primary hypo is sellers work down into overnight inventory and take out overnight low 4431.25 and do their best to fill the gap down to 4424.50 and target the NVPOC at 4422.25 before finding responsive buyers.

Hypo 2 is buyers defend around 4438.50 (overnight gap fill) and push up through overnight high 4449.75 and continue on to work the value area high of the upper distribution around 4457-4460.

Hypo 3 is a strong drive higher up through VAH 4460 and a gap fill up to 4472.50.

Levels highlighted below:

NQ_VP_03242015

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