Market Commentary For 11/27/2020

Daily commentary for U.S. broad market indices.

What Happened: On hopes of a sustained economic rebound, stock index futures are trading higher, in balance, suggesting acceptance of higher prices in the S&P 500.

What Does It Mean: In Wednesday’s regular trading, participants balanced, accepting higher prices near the $3,630 balance-area high, as evidenced by the non-presence of range expansion.

Now, buyers extended their gains, auctioning into Tuesday’s excess high, which ended the upside discovery process when responsive sellers were found near the $3,650 mark, a balance-area projection.

As a result, participants come into Friday’s session knowing that (1) the market has accepted Tuesday’s advance, (2) the auction is trading into a prior excess high, above the $3,630 balance-area boundary, and (3) the odds do not favor range expansion during a shortened, holiday session.

Therefore, today will likely further confirm Tuesday’s activity was the start of a new trend to the upside. Since the auction below $3,625, into Tuesday’s poor profile structure, did not attract further selling, initiative buyers remain in control. Thus, participants must monitor for signs of (1) continuation or (2) balance.

In case of the former, participants ought to take out the $3,655 overnight rally high first. In case of the latter, the auction ought to find responsive buyers near $3,630, a prior resistive balance-area high. An initiative drive below below that figure would put the rally on hold, and would target first $3,620, and then the node near $3,610.

Levels Of Interest: $3,655 overnight high, $3,630 balance-area high/high-volume node.

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