What Happened: Ahead of fundamental data releases and stimulus news, U.S. stock index futures are trading within a two-day balance area after successfully defending Monday’s upside break.
What Does It Mean: During Wednesday’s regular trading in the S&P 500, participants defended multiple attempts to auction back into last week’s balance area, marked by the $3,640 ledge.
Further, despite a lack of breadth, given the market’s response to the ledge, the odds of further upside have risen. Adding, remaining above the upper balance boundary — $3,640 ledge — the bullish bias remains. Auctioning below the upper balance boundary would be the most negative outcome, and could foreshadow a test as low as the lower balance area boundary, near $3,590.
Going into today’s session, participants know that (1) the S&P 500 is trading within a two-day balance area and (2) buyers remain in control. As a result, auctioning above the $3,677 boundary, participants should follow along the initiative activity, targeting prices as high as the upside projections near $3,700. Auctioning below the $3,640 boundary, puts the rally on hold, and suggests further balance.
Levels Of Interest: $3,677 and $3,640 two-day balance boundary.