Notice: To view this week’s big picture outlook, click here.
What Happened: After the Senate’s passage of a $1.9 trillion COVID-19 relief package, overnight, bond yields rose and U.S. stock index futures fell.
What Does It Mean: U.S. stock index futures ended last week mixed after non-farm payrolls grew by 379,000, versus a consensus of ~180,000, improvement in sales and manufacturing data, as well as news that COVID-19 coronavirus vaccinations were accelerating.
Further, on Friday, after an attempt by market participants to resolve lower, via a break of consolidation, stock indexes made a vicious rebound as near-term downside discovery reached its limit, based on market liquidity metrics and the inventory positioning of participants.
SqueezeMetrics GammaVol (GXV) Curve 
Options Activity 
QQQ Market Liquidity 
IWM Market Liquidity 
SPY Market Liquidity
What To Expect: Monday’s regular session (9:30 AM – 4:00 PM ET) will likely open inside of prior-range, suggesting a limited potential for immediate directional opportunity.
During Friday’s trade, the best case outcome occurred, evidenced by a failure to breach the $3,720.50 minimal excess low and upside range expansion.
More On Excess: A proper end to price discovery; the market travels too far while advertising prices. Responsive, other-timeframe (OTF) participants aggressively enter the market, leaving tails or gaps which denote unfair prices.
For today, participants can trade from the following frameworks.
In the best case, the S&P 500 either (1) remains rotational — trading responsively between the $3,861.25 low-volume area (LVNode) and $3,762.25 high-volume area (HVNode) — or (2) auctions higher, past the $3,861.25 LVNode, putting in play the $3,892.75 HVNode.
In the worst case, the S&P 500 auctions lower, through the $3,784.25 LVNode, which may portend a test of the $3,762.25 HVNode. Thereafter, if lower than $3,762.25, participants can target a repair of the $3,720.50 minimal excess low.
More On Volume Areas: A structurally sound market will build on past areas of high-volume. Should the market trend for long periods of time, it will lack sound structure (identified as a low-volume area which denotes directional conviction and ought to offer support on any test). If participants were to auction and find acceptance into areas of prior low-volume, then future discovery ought to be volatile and quick as participants look to areas of high-volume for favorable entry or exit.
Levels Of Interest: $3,861.25 LVNode.