Notice: To view this week’s big picture outlook, click here.
What Happened: U.S. index futures auctioned back into prior balance.
What Does It Mean: Last week, U.S. index futures broke balance and auctioned lower. After aggressive buyers responded to prices below value, pressure disappeared, and the S&P 500 further confirmed the balance-break.
Over the extended weekend, however, market participants negated the end-of-week selling activity by auctioning back into balance.
What To Expect: Tuesday’s regular session (9:30 AM – 4:00 PM ET) will likely open on a gap, inside of prior-balance and -range, suggesting the potential for a volatile session.
In the best case, given that the open will be inside of a larger balance area ($3,824.25-$3,763.75), participants can expect continued balance or initiative buying to take out the $3,824.25 balance-area high (BAH). The go/no-go level for further upside is the $3,796.50 overnight high (ONH). Trading through this high would mean that participants overcame responsive selling at the $3,794.25 high-volume area (HVNode).
In the worst case, if the S&P 500 were to roll past its $3,763.75 balance-area low (BAL), expectations thereafter include a test of the low-volume node (LVNode) near $3,732.75. A break of the LVNode would portend a response near the $3,703.25 balance-break projection.
Levels Of Interest: $3,763.75 BAL, $3,796.50 ONH, $3,824.25 BAH.