Looks like there has been scuttlebutt on new tariff’s on Chinese imports overnight. NQ futures has an overnight range of 57 points. This could be a wild Friday.
The market’s overnight inventory is about 80% net long at I write this. In my first scenario I will look for that counter auction to correct the overnight inventory, but then I see the market shrugging off the tariff talk and pushing up higher. With yesterday’s failure to correct all of Tuesday’s chart anomaly’s and the gap up at last nights Globex open, there may be too much strength in this market heading into the weekend.
For my second scenario, I have the market driving up at the open to test above yesterday’s range high. If there is no acceptance above, then we could see a push down to correct those chart anomaly’s from Tuesday.
If I were to zoom out and really look at the last 7 trading days, I will see that the profiles have been overlapping each day with just modest extensions to the long and short side. The range for this period is approximately 7436.00 down to 7340.50. I admit this is a pretty big range, but it wouldn’t be odd to see NQ trade inside of that range today. There is a little uncertainty heading into earnings next week with Google, Facebook and Amazon all scheduled to release. Based on the sheer number of companies reporting next week, this scenario makes a lot of sense to me.
Obviously I’m not married to either one of these scenarios, I always try to trade what I see. It will be interesting to see though, how the tariff talk plays out at the open today.
That’s my plan and I’m sticking to it. Have a great trading day folks!