What Happened: Alongside hopes for an economic recovery on COVID-19 coronavirus vaccines, U.S. index futures negated Friday’s late-day spike liquidation, gapping higher into Monday’s open.
What Does It Mean: On Friday’s end-of-day sell-off away from value, the S&P 500 closed within a prior balance area marked by the $3,580 low-volume node and $3,506.25 excess low (see below graphic). Since then, the weekend session negated the spike liquidation, suggesting initiative sellers may be losing control.
As a result, if participants can auction and spend time above the $3,580 low-volume node, then the potential exists for a failed breakdown and range-expansion up to the balance-area high near $3,630. Otherwise, if participants manage to retake the prior selling activity marked by the $3,562 spike base, then that action may be the start of a new trend to the downside, confirmed by range expansion beyond the $3,506.25 excess low.
Levels Of Interest: Spike base at $3,562, the $3,506.25 excess low, as well as the $3,580 low-volume node.