Market Commentary For 11/25/2020

Daily commentary for U.S. broad market indices.

What Happened: As investors await a flurry of economic data including GDP estimates, stock index futures are trading in range after a day of active discovery that found acceptance near the $3,630 balance-area high in the S&P 500.

What Does It Mean: In Tuesday’s regular trading, initiative buyers dominated the auction, after a break of the low-volume node at $3,580. Later in the session, buyers established an excess high, suggesting an end to the upside discovery process.

Overnight, however, buyers extended their gains before finding responsive sellers near the $3,650 mark, a balance-area projection.

As a result, participants come into Wednesday’s session knowing that (1) the market has made a substantial advance, (2) numerous high-profile economic releases are to be revealed, (3) the prior day’s p-shaped profile structure is weak and indicative of short-covering.

Therefore, today’s session may confirm if yesterday’s activity was the start of a new trend to the upside. Auctioning into Tuesday’s profile structure, below $3,625, may portend a rapid liquidation down to the $3,610 high-volume node, which ought to offer responsive buyers an opportunity to buy at lower prices and initiative sellers a favorable area to profit take. Spending time below yesterday’s value points to further balance.

In case participants accept higher prices, upside targets include the overnight high, as well as the November rally high at $3,668.75. An initiative drive through $3,610 would be the most bearish outcome, and would target the balance-area low and then the low-volume node at $3,580.

Levels Of Interest: $3,610 high-volume node, $3,655 overnight high, $3,668.75 rally high.

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