Daily Market Diaries

Overnight, Nasdaq futures set their low of 29,024.00 by 4:15 a.m., rallied 330.00 points to a high of 29,354.00 by 8:30 a.m., then gave back 124.00 points into the 9:30 open. That left them up 107.00 points (+0.37%) from the prior cash close, after being up as much as 231.00 points (+0.79%). The overnight range was 1.0 times that of a typical recent night. By session: Asian hours -39.50 points on 1.5 times the usual volume, European hours +180.75 points on 1.2 times the usual volume, the US pre-market -34.25 points on 1.3 times the usual volume. The cash open came in the upper half of the overnight range. The overnight low held through the day session; the overnight high was cleared by 10:20 a.m.

QQQ opened modestly higher than the prior close of $704.40 at $707.07, hit the session low of $705.58 by 9:35, then extended the move higher into a session high of $715.25 by 11:05, and closed at $712.20, up $7.80 (+1.11%) from the prior close, holding near the high with only a modest give-back into the close. By the clock: the opening hour added $2.83 (+0.40%), midday added $4.20 (+0.59%), and the final two hours lost $2.05 (-0.29%). The final two hours ran against the direction set in the opening hour.

The fastest stretch of the day came between 10:20 and 10:50: QQQ rose $2.79 (+0.39%) in half an hour, 5.5x a typical move for that time of day over the prior 20 sessions, on 1.2x the usual volume for that time of day. The push carried it through the session's earlier high ($710.67) at 10:25 — a level many short-term traders watch, and a common place for a move to pick up speed. For a session's fastest stretch that is ordinary — most days have one like it — so it doesn't call for a special explanation.

By this market's own standards it was an ordinary day: the +1.11% move was larger than 65% of the prior 250 sessions, on a range 1.1x its 20-day average and volume 0.9x. Modest in size, it still left a mark. The max-pain strike moved down from 726 to 714.

Bonds moved the same way as stocks (TLT +0.42%), so yields were part of the story. Price stayed close to the 714 max-pain strike with expiry 1 day out. Put together, the dominant force was interest rates. On balance this was a macro-driven day (bonds made a real move; participation was broad).

As a trend leg, the evidence was mixed — some, but not all, of the confirmation a real trend move usually carries. It had broad participation, a close that held the move, alignment with the medium-term trend. It lacked above-average volume, credit confirmation. Into the Oct 27 expiry (1 day out), QQQ closed $1.80 below the 714 max-pain strike, between the largest put concentration at 680 and the largest call concentration at 735.

Best to your trading!