What Happened: U.S. index futures accepted new highs, balancing just above Thursday’s regular trading activity.
What Does It Mean: During Thursday’s regular trade, the S&P 500 confirmed higher prices, with the auction separating and establishing value above prior range.
Overnight, the S&P 500 index future found responsive buyers at the $3,699.75 high-volume area, a valuable price, and initiated up to the $3,720.00 price extension. As of now, ahead of Friday’s derivative expiry, futures have backed off their highs, balancing.
What To Expect: In light of the small overnight gap, the following frameworks apply for today’s trade.
In the best case, buyers maintain conviction and hold the index above the $3,699.75 high-volume node. Holding said reference, and trading into the excess above $3,723.00, would constitute a balance-area breakout. Given the derivative expiry, the odds of sustained directional resolve, today, are low.
In the worst case, if the S&P 500 is brought back into range, participants can expect further balancing. In other words, we’re looking for higher prices, at or above $3,700.00, to facilitate increased trade. A thickening of the composite profile, at the highs, would denote acceptance.
Adding, with any breakout from balance, separation of value is key; such activity would be recognized by range expansion above the aforementioned excess high. A penetration of the $3,699.75 high-volume node, lower, suggests the market is not ready for further upside; less aggressive, responsive trade is the course of action.
Levels Of Interest: The $3,699.75 high-volume node, as well as the excess above $3,723.00.