What Happened: Following an initiative upside drive on coronavirus vaccine optimism, U.S. index futures pared gains, weighed down by the innovation-driven, technology sector. The resulting overnight price action brought prices back into a multi-month balance area, putting into question Monday’s breakout.
What Does It Mean: As of now, after Monday’s end-of-day spike liquidation moved prices away from value (i.e., the level at which the most amount of activity occurred), the S&P 500 index future is trading near the October rally high, above a high-volume concentration which denotes the most recent perception of value.
Further, the aforementioned high-volume concentration should allow responsive buyers more favorable prices to emerge from. If the market were to auction beneath the high-volume concentration, through the low-volume below, then near-term directional conviction has changed, favoring more rotational trade.
Levels Of Interest: High-volume areas near $3,500, $3,450, and $3,400. Major upside references include yesterday’s value area above $3,500, as well as the extension near $3,700 and projection at $3,800.